Terrorism and the financial sector: are the right prosecutorial tools being used?
| Pages | 281-285 |
| DOI | https://doi.org/10.1108/13685200410809995 |
| Date | 01 July 2004 |
| Published date | 01 July 2004 |
| Author | Stefan D. Cassella |
| Subject Matter | Accounting & finance |
Terrorism and the Financial Sector: Are the Right
Prosecutorial Tools Being Used?
Stefan D. Cassella
INTRODUCTION
There are currently few more important issues than
protecting citizens from terrorist attack, and cutting
o terrorist ®nancing is one way to do that. The US
Congress has given federal prosecutors in the USA a
variety of prosecutorial tools that can be used in ter-
rorist ®nancing cases Ð tools for gaining criminal
convictions and tools for con®scating assets as well.
Some of these existed before 11th September, 2001,
and others were enacted as part of the USA Patriot
Act immediately thereafter. All of these tools can be
applied in one situation or another to those who
®nance terrorist acts and who use the ®nancial
system to do it.
The purpose of this paper is to make some obser-
vations about the range of tools that prosecutors in
the USA have been given to track down the people
®nancing terrorism and to con®scate their money.
All of them have their place, and all have their uses.
Of the many tools that can be used, however, some
are easier to use than others, and in fact some of the
provisions enacted to deal exclusively with terrorist
®nancing apply in such narrow circumstances that
they are unlikely to be of practical value in most
cases. So, as will be shown, this paper will propose a
back-to-basics approach that focuses on some of the
more pedestrian criminal oences that are easier to
investigate and easier to prove than some of the
more state-of-the-art terrorism oences. This may
be the way to achieve the ultimate aim of depriving
terrorists of their money more quickly and more
eectively.
METHODS OF FINANCING
First, the context must be established: what is `terrorist
®nancing'? What problems does law enforcement
encounter in such cases?
In some cases the problem is money coming into a
country to ®nance a speci®c terrorist act. That
money, of course, is notoriously hard to spot. The
attacks of 11th September only cost about $500,000.
Wire transfers of that size occur hourly. In fact,
small amounts do not have to be wired into the
country at all. A deposit into a foreign bank that is
on the US automated teller machine (ATM) network
will allow someone in the USA to withdraw whatever
he needs from the foreign bank with his ATM card,
just as an American tourist or business traveller uses
an ATM card when he is travelling overseas.
In terms of substantial sums, funds are increasingly
going to organisations in the USA that are not terrorist
organisations per se, but those that hold and promote
views that terrorist organisations share. Those are
organisations, of course, whose members constitute a
pool of likely recruits for terrorist causes. For example,
someone might receive funds overseas and attempt to
transfer that money into the USA to support an Isla-
mic organisation purportedly engaged in charitable,
humanitarian, religious or political activities. Given
First Amendment concerns and a host of other
issues, there is not much that can be done about this
type of terrorist ®nancing Ð if it can even be called
that Ð under a `terrorist ®nancing' statute. If law
enforcement is to intervene at all in such cases, it
must do so pursuant to a statute that is content neutral.
Outbound money
On the outbound side, money is being contributed to
so-called charitable or humanitarian organisations and
then being sent overseas by those organisations where
it may be intended to do no good. A lot of proceeds of
petty crime are also going overseas (as cash, bearer
instruments and wire transfers) to places where one
has to be suspicious of its intended use.
The author personally handled a case some time ago
where the cash proceeds of pseudoephedrine diversion
were being stued into Lady Clairol hair colour boxes
and shipped to Yemen. Those in the money launder-
ing enforcement business are used to seeing criminal
proceeds being laundered in oshore banks in the
Caribbean or on an island such as Vanuatu in the Paci-
®c. When the money is going to Yemen, they wonder
if there is not more to the case than just a desire to hide
the proceeds of crime from the law enforcers.
The problem with all of these outbound ®nancing
scenarios Ð whether the money constitutes charitable
contributions or proceeds of petty crime being sent
Page 281
Journal of Money Laundering Control Ð Vol. 7 No. 3
Journalof Money Laundering Control
Vol.7, No. 3, 2004, pp. 281± 285
#HenryStewart Publications
ISSN1368-5201
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