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U.S. says Mideast must crack down on terror finance

July 13, 2005

By Caroline Drees, Security Correspondent

WASHINGTON (Reuters) – Middle Eastern countries must do
much more to fight terrorism financing, and Washington will
push these states to take action if they fail to do it on their
own, a senior U.S. Treasury official said on Wednesday.

Stuart Levey, the U.S. Treasury’s undersecretary for
terrorism and financial intelligence, said some progress had
been made in the region, such as passing anti-money laundering
laws and cracking down on the abuse of charities. But he called
for more evidence that the steps were actually bearing fruit.

“We have a long way to go in the battle against terrorist
financing in the Middle East,” Levey said in testimony to the
Senate banking committee.

“Where the threat of terrorism does not generate the will
to take effective action … my office, working in close
cooperation with all of our interagency counterparts, will push
for action,” he said.

In the past, U.S. steps have included diplomatic pressure,
as well as economic sanctions such as freezing funds.

Levey said some Middle Eastern countries had still not
passed adequate anti-money laundering laws, ensured laws were
actually enforced, established controls over informal cash
transfers, or set up financial intelligence units to help fight
dirty money.

Levey specifically cited long-standing shortcomings in
Saudi Arabia and Syria. He said the United States was using a
combination of pressure and cooperation to get the kingdom –
birthplace of most of the Sept. 11 hijackers — to comply.

“Even today, we believe that private Saudi donors may still
be a significant source of terrorist financing, including for
the insurgency in Iraq,” he said.

The undersecretary said Syria continued to “meddle” in the
affairs of its neighbor Lebanon, was a source and conduit for
funds to Iraqi insurgents, and allowed terrorist groups to
flourish on its soil.

The United States has already slapped a series of sanctions
on Syria and has blocked the assets of some of its nationals –
including its interior minister — to press for change.

Levey also said cash couriers presented a particularly
serious danger, in part because they were being used to fund
militants in Iraq.

“It is critical that Gulf countries and countries
throughout the Middle East lower their reporting thresholds for
cross-border transfers of cash and enforce these provisions
aggressively,” he said.

Levey said the United States wanted to see proof — such as
arrests, cash seizures and blocking of accounts — that
policies against dirty money were not only being adopted, but
implemented and enforced.

“Some countries, eager to curry favor with their neighbors
or the international community, may believe that adopting an
anti-money laundering and counter-terrorist financing law will
keep observers at bay. Such half-steps will neither fool nor
satisfy the United States and the international community.”




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