African Capacity Building is Essential to Undermining Terrorist Financial Networks, say Representatives from The U.S. Treasury

25 August 2004

Washington — In line with the ongoing investigations into the financial networks of terror, Juan Zarate, Assistant Secretary for Terrorist Financing, and William Fox Director of the Financial Crimes Enforcement Network (FinCEN), both from the U.S. Department of Treasury, briefed a group of foreign media correspondents on "U.S. Efforts in the Financial War on Terrorism." Yesterday at the Foreign Press Center, the two representatives of the Treasury outlined the current developments on U.S. efforts to curb the "individuals and entities" that finance terror.

The Treasury has designated financial institutions, including two Burmese banks, Myanmar Mayflower Bank and Asia Wealth Bank; the Commercial Bank of Syria; InfoBank in Belarus and First Merchant in the Turkish Republic of Northern Cyprus as "primary money-laundering concerns." Current measures to prohibit "U.S. financial institutions from establishing, maintaining, administering or managing any correspondent account in the United States" are directed towards First Merchant Bank, InfoBank and other money-laundering financial institutions that may have backed terrorist activities. However, some African individuals and groups are of strategic importance in the effort to undermine terrorist financial networks. Below are excerpts of Zarate and Fox in their discussion on Africa's engagement in the US's initiative.

You've just mentioned West Africa, and your concern about financing with respect to Charles Taylor and his regime in Liberia, and other such regimes that have used illicit means of pilfering funds from their own people, as well as moving funds for their own benefit. It's not financial institutions that are engaged in financing terror in West Africa as the discussion has been proceeding. I was wondering, therefore, if you could talk more about individuals and entities within Africa, besides Charles Taylor, that might have engaged in financing terrorism.

ZARATE: Our concerns range the whole gamut in terms of activities in Africa. It's a potential source of financing in movement of funds for al-Qaida. We've seen that in East Africa with a number of our designations. We've seen it in some of the hawaladar networks; for example, Al Barakat, which was a key network connected to Somalia. There are other groups that potentially have used Africa to raise funds and to move funds.

How do you plan to engage African countries in undermining the financial networks of terror?

ZARATE: As we speak, financial experts from around the world are assembled in Tanzania with the FATF-style regional body in Africa. It's known as ESAAMLG, the East and South African Anti-Money Laundering Group. That is a group that's assembled, that works on building regimes in Africa, building capacity in Africa to deal with these issues -- and again, as you mentioned, not just in the banking sector, the formal financial sector, but in the less regulated, less formalized sectors, like the money exchange houses which exist and which are of potential use. So that is one mechanism and one very good example that's happening right now where we engage. We engage bilaterally all the time with countries around the world, not just in West Africa but also in East Africa and Southern Africa. One of our great challenges with respect to Africa is building capacity -- helping African nations to help themselves in what really is a global endeavor.

FOX: We at FinCEN entertained this past week a delegation from Egypt and their new financial intelligence unit, which was accepted into the Egmont Group this summer. They are also a leader in the, I think it's the MENA FATF-style regional body, which is the Middle East-North Africa FATF-style regional body. We think it's really important that we do build this capacity. I know Tanzania is hard at work at developing a financial intelligence unit. There are good units in Mauritius and in South Africa and in Egypt and in other place in Africa. And again, I think the more we globalize this, the better we are and the better we can help African countries develop those systems, again, that lead to financial transparency. I think we're all better in the world for that.

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