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Center for International Policy

Company Information :
Center for International Policy
1717 Massachusetts Ave NW
Suite 801
Washington, DC 20036
United States
Ph. 202-232-3317
Fx. 202-232-3440

Media Contacts:
Jennifer Nordin / director of economic studies / 202/232-3317 x 118

Brookings Conference & Center For International Policy: Weaknesses In International Financial System Feed Terrorist Activities

Sen. Grassley's (R-IA) Keynote Speech at Brookings Conference Addresses the Effects of Dirty Money on U.S. National Security


WASHINGTON, D.C./EWORLDWIRE/Sep. 10, 2003 --- The terrorist attacks of September 11, 2001, highlighted glaring loopholes in the international financial system that allow terrorists to finance their activities with the help of western banks. Terrorist financing, however, is just one component of the larger problem of "dirty money" that is illegally earned, illegally transferred and illegally utilized.

The impact of these illicit financial flows, estimated at $1 trillion annually, was the topic of the "Dirty Money and National Security" conference held today at the Brookings Institution.

The conference, sponsored jointly by the Brookings Institution, the Center for International Policy and the Caux Round Table, featured leading academic, private sector and government figures. Senator Charles Grassley (R-IA), in a speech relayed by U.S. Sentate Caucus on International Narcotics Control staff director Eric Akers, stressed that money laundering and terrorist financing are legitimate threats to our national security that the United States can not fully confront alone.

"Today, many nations around the world are working in close cooperation to identify and halt the illicit transfer of funds. If we can shut down the flow of these illicit funds, whether generated by drug sales or donated to support terrorist activities, I believe we will significantly deter much of the large-scale organized crime that occurs today. The United States is a key player in making this happen."

Sen. Grassley also highlighted the economic instability that dirty money can cause, by reducing tax revenues, competing unfairly with legitimate businesses, damaging financial systems, and disrupting economic development.

Raymond W. Baker, senior fellow at the Center for International Policy and co-chair of the conference, stated that all three forms of dirty money - criminal, corrupt and commercial - use the same mechanisms to move through the international financial system, such as false documentation, mispricing, dummy corporations and tax havens. The United States has more than 200 classes of domestic crimes that establish the basis for money laundering charges, but only 11 of those apply if committed outside the United States.

"This difference between what we criminalize if it occurs within our borders and what we criminalize if it occurs beyond our borders is at the heart of the global money laundering issue."

Money launderers, including terrorists, readily understand and utilize these channels to move their funds around the world.

Osama bin Laden, shortly after the September 11 attacks, said: "Al Qaeda is comprised of modern, educated youths who are as aware of the cracks in the western financial system as they are in the lines of their own hands. These are the very flaws in the western financial system that are becoming a noose for it (Ummat, 9/28/01)."

David Aufhauser, general counsel of the U.S. Treasury Department, remarked that it is impossible to overstate the importance of the war on terrorist financing when speaking about the war on terrorism.

"Funding is the midwife of every terrorist event", buying mobility, stealth, and the tools of execution and escape. He stressed that "the war on terrorism will be won with intelligence and by shutting off their logistical means, not with bullets." Aufhauser also noted the U.S. government's progress in cracking down on terrorist funding, stating that Al Qaeda is now "two-thirds less rich" than prior to September 11, 2001.

James Kindler, chief assistant district attorney of New York County (Manhattan), asserted that lawyers and accounting firms, in addition to banks, need to know whom they are dealing with, as they often facilitate access to offshore entities that are used to launder money.

"Professional obligations need to be redefined. There has been a lack of cooperation from the private sector, and we could expect more from them."

Further background information on sponsoring organizations:

Brookings Institution

Center for International Policy

Caux Round Table

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Jennifer Nordin
Center for International Policy
1717 Massachusetts Ave. NW
Suite 801
Washington, DC 20036
PHONE. 202/232-3317
FAX. 202/232-3440
EMAIL: jennifer@ciponline.org

KEYWORDS: Brookings Institution, Center for International Policy, Caux Round Table, dirty money, terrorist financing, money laundering, national security

SOURCE: Center for International Policy


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