terrorist finance kabul, afghanistan april 2006. history of financial transparency follow-the-money...
TRANSCRIPT
![Page 1: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/1.jpg)
Terrorist Finance
Kabul, Afghanistan
April 2006
![Page 2: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/2.jpg)
History ofFinancial Transparency
• “Follow-the-Money”
• U.S. Bank Secrecy Act - 1970
• Creation of “financial intelligence”
• G-7 Creation of FATF – 1988
• FATF 40 Recommendations
• Egmont Group of Financial Intelligence Units - 1995
![Page 3: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/3.jpg)
What is Financial Intelligence?
• Many different examples:
• Records of large cash deposits
• Cross-border currency reports
• Large cash purchases
• Casino reports
• Suspicious Transaction Reports
![Page 4: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/4.jpg)
Purpose of Financial Intelligence
• Gives investigators a “paper-trail”
• Key tool in the War on Narcotics
• Useful in other “predicate offenses” for money laundering
• Money laundering is the “inverse partner” of terrorist finance
![Page 5: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/5.jpg)
Osama bin Laden:Osama bin Laden:
“Attempts to find and freeze assets will not make any difference to al-Qaida or other jihad groups. Al-Qaida is comprised of modern, educated young people who are as aware of the cracks in the western financial system as they are of the lines in their own hands. These are the very flaws in western financial system which is becominga noose for it.”
“Attempts to find and freeze assets will not make any difference to al-Qaida or other jihad groups. Al-Qaida is comprised of modern, educated young people who are as aware of the cracks in the western financial system as they are of the lines in their own hands. These are the very flaws in western financial system which is becominga noose for it.”
![Page 6: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/6.jpg)
47%
8%10%
1%
34%
Cash Travelers Checks
Misc Cks from Individuals
Wire Transfers
42%
2%11%
13%
15%
12%
2% 3%
Cash Lodging
Misc Aviation
Airlines Cks to Individuals
Automotive Balance in a/c
September 11Totals for 19 Hijackers
Deposits $303,481.63 Disbursements $303,671.62
![Page 7: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/7.jpg)
Other Terrorist Attacks
• 1998 U.S. Embassy bombings in Kenya and Tanzania - $50,000
• 2000 attack on USS Cole in Aden - $10,000
• 2002 bombings in Bali – $50,000• 2003 attacks in Istanbul - $40,000• 2004 attacks in Madrid – about $10,000
Source: United Nations
![Page 8: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/8.jpg)
War on Terrorist Finance:Response to Date
• Designations• UN 1267 Committee’s “Consolidated List”• Results:
$112 million “blocked” by December 2001$150 million – cumulative – by January 2006$60 million actually “seized”
Effective?
![Page 9: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/9.jpg)
Response - continued
• Charities
• Cash
• Rules/Regulations/Reporting Requirements
![Page 10: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/10.jpg)
Saddam’s $$$
![Page 11: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/11.jpg)
We have ignored Informal Value Transfer Systems
• Hawala• Misuse of international gold trade• Diamond/gem trade• Commodity/narcotics exchange• Trade-based value transfer
• Common denominator:Common denominator:
TRADETRADE
![Page 12: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/12.jpg)
Hawala
![Page 13: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/13.jpg)
Hawala Markings on Currency Seized in Iraq
![Page 14: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/14.jpg)
The golden age of crime
Why international drug traffickers are
invading the global gold trade
World Report, November 1999
U.S. Islamic Cash Outlets Investigated‘Hawalas’ Suspected in Terror Funding
The Washington Post, November 2001
In Gold We TrustWired, January 2002
Al Qaeda’s Road Paved With Gold
Secret Shipments Traced Through a Lax System in United Arab Emirates
The Washington Post, February 2002
The Afghan-Gold ConnectionThe Afghan-Gold Connection
![Page 15: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/15.jpg)
![Page 16: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/16.jpg)
Laundering of Diamonds/Gems
• Diamond/Gem “Pipeline”
point of origin to sale
• Mining,
trading, cutting,
polishing,
retailing
![Page 17: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/17.jpg)
Laundering along “Pipeline”
• Striking similarities to money laundering• Illicit diamonds “placed, layered, and
integrated”• Facilitated by smuggling, corruption,
porous borders• Neither the Kimberly Process nor
proposed anti-money laundering rules for diamond dealers will be effective in combating the laundering of diamonds
![Page 18: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/18.jpg)
Colombian Black Market Exchange
![Page 19: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/19.jpg)
Afghan Narcotics/Commodity Exchange
![Page 20: Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial](https://reader036.vdocuments.us/reader036/viewer/2022062417/551a2eb255034619378b582f/html5/thumbnails/20.jpg)
Questions?
John Cassara