- The Washington Times - Monday, December 6, 2004

The Middle East has taken an important step toward joining the Western world in the fight against terror financing and money laundering. Last week, 14 Arab states launched a regional task force to coordinate their strategy in that regard. The welcomed, if belated, move could be particularly significant if the International Monetary Fund (IMF) and World Bank begin tying the granting of funds to counter-terror financing efforts. U.S. and other officials, recognizing the importance of the movement of funds to terrorist organizations, have been pushing for improved vigilance since September 11.

The creation of the Middle East and North African Financial Action Task Force (MENAFATF) could have a material impact on the way charities are regulated in the region and could help counter the movement of terrorist financing and the proceeds of criminal activities through a global hawala, or unofficial money transmitting system. MENAFATF includes Saudi Arabia, Bahrain, Oman, United Arab Emirates, Qatar, Kuwait, Yemen, Jordan, Syria, Lebanon, Egypt, Tunisia, Algeria and Morocco. The body will implement the 40 recommendations of the Paris-based Financial Action Task Force (FATF) and will become the regional body for coordinating efforts, sharing information and identifying areas of concern and possible solutions for combating terrorist financing and money laundering. It will also implement U.N. treaties and U.N. Security Council recommendations.

“It institutionalizes in a real and concrete way the region’s efforts to establish standards, processes and connectivity to deal with money laundering and terrorist financing,” Juan Carlos Zarate, the U.S. Treasury’s terrorist financing assistant secretary, told journalists in Bahrain.

The region has sorely needed such a coordinating organization, since it remains the principal source of terrorist financing. Saudi Arabia, the country of chief concern, has implemented a slew of regulations to prevent the funding of illicit charities, but has yet to prosecute a single individual or to prevent officials affiliated with its embassies from delivering jihad-inspiring messages abroad.

These are the kinds of gray enforcement issues MENAFATF will have to deal with, if it is to be effective. For their part, the IMF and World Bank are considering taking a closer look at terror financing when disbursing aid.

U.S. officials have been pressing Mideast countries to modernize their regulations on the flow of money. The launching of MENAFATF is a response to that pressure. The United States should continue calling attention to the importance of countering terror financing, since it provides an avenue for stopping attacks before they occur. We need to create a greater sense of urgency than currently exists in Europe, the Middle East and some precincts of Washington.

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