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Friday, June 23, 2006

Terror funding shifts to cash

WASHINGTON (USA Today) — Terrorist groups get around post-Sept. 11 restrictions on banks and charities by turning to couriers to smuggle cash across borders to finance terrorism plots, a trend that U.S. intelligence has seen increasing in the past year.

Intelligence gathered from captured terrorist suspects and other sources indicates "a trend toward bulk-cash smuggling and use of cash couriers," Stuart Levey, undersecretary of Treasury for terrorism and financial intelligence, told USA TODAY.

Reliance on cash makes it harder for terrorist groups to raise money from wealthy individuals or charities accustomed — until their activity drew the attention of Treasury enforcement — to conveying money through the banking system, Levey said. Cash also makes distribution to front-line terrorist cells plotting attacks more cumbersome. Terrorist groups have had to break up cash into smaller amounts to keep one weak link from crippling a terrorism operation, he said.

EFFORTS PAYING OFF: Flow of terror funds being choked

"It's a lot less efficient," Levey said. "Some cash couriers get caught. Some get greedy."

But cash is difficult for law enforcement to track, Levey said. International efforts to block illegal cash smuggling have been slow in coming, particularly in the Middle East, where there is a tradition of carrying large sums. Compared with conventional military operations, terrorist attacks are relatively inexpensive. Modest sums can finance damaging attacks.

For example, the 2002 bombing in Bali, Indonesia, that killed 202 and the 2003 bombing at a Marriott Hotel in Jakarta that killed 12 were financed by smuggling $30,000 in cash for each attack from al-Qaeda to allied terrorists in Asia, Levey said. By contrast, the 9/11 Commission estimated the Sept. 11 attacks cost between $400,000 and $500,000 over two years — at least some of which was deposited in foreign accounts and accessed by the plotters in the USA.

Levey said Treasury is making progress in persuading Persian Gulf states to require people to declare the cash they carry across borders. The U.S. Immigration and Customs Enforcement agency has been training foreign counterparts to detect and block cash smuggling, ICE spokesman Dean Boyd said.

A report last week from the Government Accountability Office said the international financial community has been slow to focus on the issue, leaving the way open to move smaller amounts of money that financed recent terrorist operations. In late 2004, an international money-laundering task force urged nations to step up monitoring of cross-border cash transportation and establish sanctions against those who make false declarations. The initiative has prompted some nations to impose new restrictions, the GAO said.

Before the new restrictions, terrorist groups raised money through individuals or groups purporting to be charities, which then sent money through the international banking system across borders, Levey said. An al-Qaeda operative at the end of the money line would then distribute the money to people plotting terrorist attacks.

U.S. and allied governments have pressured private donors, charities and the banks that handle their money by formally designating them as terrorist affiliates. That move triggers a ban on any other party, including a bank, from handling their funds. Banks that violate the ban can be stripped by Treasury of their ability to handle U.S. dollars, which makes it virtually impossible to operate in an international financial system dominated by U.S. currency.
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