The war against terrorist financing

Publication Date01 Oct 2003
AuthorWilliam Allen
Journal of Money Laundering Control Ð Vol. 6 No. 4
The War Against Terrorism Financing
William Allen
Prior to 11th September, 2001, policing the interna-
tional ®nancial system focused mainly on the criminal
enterprise of corporate fraudsters, drug trackers,
stock swindlers and all those seeking to insulate
their criminal money from the crime. Coming to
terms with the eective management of a diverse
and interconnected global ®nancial network takes
on an enormous urgency today as a result of the dan-
gers that international terrorism represents. It is also
very clear that the actual ®nancing of terrorism
could itself easily fall below the threshold of suspicion
and below the regulatory and supervisory radars.
There is little room for doubt that civilisation is
threatened by this barbarism and the entire interna-
tional ®nancial community must commit itself to
sending a clear uni®ed message of intolerance of
terrorism and a determination to prevent the use of
®nancial institutions for its ®nancing.
The message that must be sent has to represent an
unprecedented level of global cooperation, exceeding
that to which the international community has been
accustomed. The commitment must be demonstra-
bly unequivocal, with no appearance that it is given
grudgingly. But today the present landscape of inter-
national relations in the sector must be directly
related to the ®nancing of terrorism is so ®lled with
mistrust and heavy-handedness, that it presents a
signi®cant challenge to fostering and sustaining the
spirit of collaboration now called for. The author's
perspective from a small developing country (the
Bahamas) which falls into the category of oshore
®nancial centre is where this paper is focused.
In fashioning the strategy for successful global
interdiction of terrorism ®nancing, it would be
useful, in practical terms, to bene®t from the experi-
ence gained under two earlier international ®nancial
initiatives: (1) the anti-money laundering (AML)
initiative of the Financial Action Task Force
(FATF) and (2) the harmful tax practices (HTP)
initiative of the Organisation for Economic Coop-
eration and Development (OECD). It is regrettable
that both of these are regarded by many as having
been engineered to proceed in a way to ensure a
permanent division between the most powerful
industrial countries on the one hand and the mainly
small, developing, pressure-sensitive countries
engaged in the provision of cross-border ®nancial
services on the other. This is not at all to suggest
that action was not required. Indeed it was.
The most cursory review of the course of these two
initiatives would clearly indicate why that process
now militates against the achievement of a spirit of
goodwill and trust between oshore centres and the
major industrial countries driving the initiatives.
With regard to the money laundering initiative of
the FATF, just when it appeared that the process of
mutual evaluations promoted by the FATF, had
successfully established a regional sub-body, the
Caribbean Financial Action Task Force (CFATF) in
the Caribbean region to assist regional members in
developing relevant AML strategies, the initiative
itself took on the characteristics of a pitched battle
between the FATF and the CFATF.
In November 1999, the CFATF presented what
seemed to be a fair and satisfactory report on the pro-
gress of the Bahamas. The report was published and
accessible through the FATF's website. The CFATF
was as surprised as the Bahamas when the FATF
eectively rejected its report in an obviously con-
frontational posture, describing the Bahamas, which
was clearly engaged in a process of reform, as non-
cooperative in its report of 22nd June, 2000. In its
report the FATF noted that several Bills were then
pending in the Bahamian Parliament which would
address the weaknesses identi®ed. In the circum-
stances, therefore, the precise reason for the `non-
cooperating' listing was at best unclear. Perhaps it
was the FATF's position that the Bahamas was not
moving rapidly enough, but compared to what? It
would have been extremely helpful to understand
why the FATF arrived at a dierent conclusion on
the eorts made by the Bahamas to that arrived at
by the CFATF.
The deliberate `naming and shaming' exercise
seemed curiously malicious, not least because it was
patently unclear, based on objective criteria, why
Page 306
Journalof Money Laundering Control
Vol.6, No. 4, 2003, pp. 306± 310
#HenryStewart Publications

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT