- The Washington Times - Sunday, August 22, 2004

The Financial Action Task Force (FATF) should be commended for sharpening its focus on the financing of terrorism and unflinchingly publishing criticism of even wealthy countries for their legal shortcomings in the area.

An independent international body based in Paris, the FATF detailed in its recently released annual report the gaps some countries need to close to meet its eight recommendations on terrorist financing effectively. Those recommendations in broad strokes are: criminalize the financing of terrorist groups; establish laws to enable the freezing and seizure of terror-related funds; require financial and other firms to report terror-related suspicious activity; cooperate with other countries to counter terror financing; require licensing of informal money transmitters; require money transmitters to document identity of customers; oversight of charities and ratify the 1999 U.N. International Convention for the Suppression of the Financing of Terrorism.

Germany is one of the countries evaluated in FATF report by independent experts. The report found: “With regard to the criminalization of terrorist financing, the provisions in the German criminal code only refer to terrorist organizations. Therefore, the provision of funding to an individual terrorist [who is not part of a terrorist organization] is not covered by specific legislation.” It is difficult to understand how a country like Germany would fail to have a more tailored terror funding law on its books, especially since al Qaeda members involved in the planning and execution of the September 11 attacks (including Mohammed Atta) had been based in Hamburg.

Experts also noted that Argentina does not have laws criminalizing either terrorist financing or money laundering. Those legal loopholes are regrettable, since Argentina’s border area with Paraguay and Brazil has been widely recognized as a lawless territory, where funds from various types of smuggling have been sent to international terrorist groups.

The FATF also provided new detailed and lengthy guidance on how to implement its eight recommendations on countering terror financing, which it established in 2002. Those proposals already are having a global impact. The Russian government is considering amendments and additions to its federal law on terror financing and money laundering based on the new guidelines. Bermuda also said it is considering adopting new laws on terror financing.

The FATF decided after the September 11 terrorist attacks to broaden its oversight of money laundering to include terrorist-financing issues. The reports it publishes on countries’ laws and practices are widely respected and have a political impact. The FATF’s work will help staunch the flow of resources to international terrorist groups — a critical front in the war on terror.

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