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Terrorist Financing Monograph Outline

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Law Enforcement Sensitive
10/21/03

I. How did AI-Qaeda as an institution (as opposed to the hijackers) raise and
move funds to support itself? What were Al-Qaeda's expenditures?

II. Prior to 9/11, what did the U.S. do to identify and stop the raising and
movement of money in support of terrorist groups?

A. What did the USG do to gather and analyze intelligence on the raising and
movement of money in support of terrorist groups?

1. Description and assessment of the government's ability to gather and analyze


intelligence domestically on al-Qaeda related fundraisers and money
transmitters
a. FBI
b. Treasury
(a) General description and analysis of the level of coordination
between FinCEN and other USG intelligence efforts
(i) Domestic agencies
(ii) I 9/11 Closed by S t a t u t e I

2. Description and assessment of the government's ability to gather and analyze


intelligence on al-Qaeda related fundraisers and money transmitters overseas

a. CIA
i. Description and assessment of the CIA structure involved in
terrorism generally and terrorist financing specifically
(a) Non-CTC efforts
(0 9/11 Closed by Statute
(ii)
b. General description and assessment of the State Department's role in
gathering and analyzing financial intelligence related to terrorist groups
i. Structure of State for gathering and analyzing intelligence
generally
(a) Analysis by INK
• Pre-9/11 seems that limited analysis on top of distributed intell|9/n closed by statute |
• receives and disseminates intell
• ask: how prepare briefings, summaries
(b) Other efforts
(i) Foreign trips/meetings
• seem fairly high-level; not sure much intell gained
(ij) | 9/11 Closed by S t a t u t e |

• appears that posts wd visit locations; more to verify HQ info than to gather?
• but lots of errors from HQ so perhaps both functions
(iii) Multilateral/regional efforts

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• is there an intell function here?


(iv) Voluntary provision of information
• or is it more likely to be confirmation
ii. Description and analysis of the level of information collection and
analysis conducted by State with regard to terrorist financing

B. What did the USG do to disrupt the raising and movement of money in
support of terrorist groups?

1.

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2. A description and assessment of efforts to freeze terrorist assets or otherwise


financially isolate them through designations
a. Legal authority for and scope of designations
i. President's authority under War Powers Act and IEEPA, delegated
to OFAC
(a) History and nature of President's authority
(b) Description of how designations work within OFAC (including
chain of command, information flows, funding)
(c) Level of follow through
ii. Secretary of State's authority to designate Foreign Terrorist
Organizations and individuals/entities under EO 13224
(a) Nature and history of Secretary's authority
• authority stems from Anti-terrorism and Effective Death Penalty Act of 1996
• actions must be taken in conjunction w/ UST and DOJ; all designation orders/admin
records? signed by Sec, of State must be countersigned by other two secretaries
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• State objected to draft EO, treasury secretary w/ broad discretion, rdos-7439, rdos-7436
(b) Description of how designations occur (including chain of
command, information flows, funding)
(i) | 9/11 Closed by S t a t u t e |

• pre-9/11, who took lead at HQ?


• what was role of posts? Suggest names, vet, pre-notify, etc.
(c) Level of follow through
• cables to embassies
iii. Level of interagency coordination among agencies involved in the
IEEPA and FTO process
• how were equities balanced pre-9/11, pre-PCC?
• signs of progress on UBL strategy, 9/12/99, rdos-6345
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• in context of new UBL strategy, visit to UAE/SA, 5/14/99, rdos-6341


• general US position, 7/10/99, rdos-6674
• Taliban strategy, no new sanctions now, 12/8/99, rdos-7436
• concern re: US $ to NGOs supporting terrorism, 10/12/99, rdos-7433
• differences in opinion in State re: UBL strategy, 5/5/99, rdos-7424, 7423
• DOJ proposed to target fundraising, to learn if wd. have results, UK doubted approval,
4/13/99, rdos-5735

C. What did the USG do to generate international cooperation on identifying/


disrupting terrorist financing?

1. What were US efforts to garner international support for efforts to block and
freeze assets
a. Description of the general international attitude regarding counter-terrorist
financing
i. Support of multilateral institutions for blocking and freezing
(a) UN actions against Taliban UNSCR 1267 Oct. 99
• unanimously adopted, Malaysia reversed initial 'no' vote, 10/15/99, rdos-5730, rdos-
6665
• loopholes in UNSCR 1333, 4.12.01, rdos-5721
• US requested countries to comply w/ sanctions before take effect, 10/26/99, rdos-6659
(b) Other examples of support
• early Egypt efforts, rdos-4332 O
• SA stripped UBL of citizenship, froze assets, 4/8/94
• UK proposed G-8 project based initiative dealing w/ Saudi-based NGOs, 2/24/00
(RDOS 03005171)
• UAE offered to assist, 9/14/98 (RDOS -6364)
• G-8 mtg. considerable disciissinn of TF, 3/8/99, Fr draft convention, rdos-5156
,| 9/11 closed by statute |Qerm jegjs> 3/2Q/98, rdos-5746
• arab CT convention, 4/22/98, rdos-6541
• draft OAU convention, 3/26/99, rdos-6705
• summary of EU CTF efforts, 6/7/99, rdos-6681
• UN adopted US/R resolution imposing new sanctions on Taliban, Ch/Malaysia
abstained, France approved of time limits, 12/20/00, rdos-5263
(c) USG response to independent foreign efforts
(i) Did they overlap USG efforts
(ii) Were they seen as effective
(iii) Interaction with private sectors
• US-UK. 2/10/98, rdos-6222

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ii. Foreign entities' views of the terrorism problem and the utility of
blocking and freezing
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(a) Definitions of terrorism


(b) Charities
(c) "Legitimate struggles"
(d) Emphasis on sources of terrorism
(e) Human rights issues
(f) Link between terrorism and other issues (drugs/guns/etc.)
(g) Interface between UNSC CTC and Sanctions Committee
(h) State terrorism

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' intl coop not easy to obtain pre-9/11, 12/10/02, JI report


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SA arrested Murabi/Nass for providing $ to UBL, 4/28/00, JI, td-314/137776-00
UAH looked other way while funds flowed, 1/20/02 (LATimes)

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Sudan seized UBL assets, 9/12/99, rdos-6345


Germ request for more info, 1/6/99, rfbi-7495
UAE request for more info, 2/2/00, rdos-6593

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Pak appears to be complying w/ sanctions, 2/2/01, JI, S/oo/3909-01


UBL transferring funds via Pak, 8/18/00, tdx/26218-00
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• Sudan made credible effort re: UBL, 9/15/00, rdos-6698


• Bahrain efforts pre-9/11, AML law, 9/24/01, rdos-5296, 1/27/02, rdos-6436
• SA, CP assured VP cooperation, 11/26/99, rdos-5215

2. Description and assessment of USG efforts to increase foreign political will


a. What were efforts made in conjunction with countries not involved in
supporting terrorism
• Europe, Japan
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• HQ demarche to target countries on Taliban sanctions, 10/30/99, rdos-6657


• action cable to reinforce policy message re: UBL, 9/30/00, rdos-5166
• background for posts re sanctions, rdos-5163, 5165
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US-UK strategy re: UBL, 4/13/99 (rdos-5160)


US/Aus meetings, overview of US law, 10/7/98, rdos-5753
•LUN slist must be more precise for EU banks to properly identify, must discredit
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campaign that sanctions harming Afghan citizens, 3/23/01, rdos-5721


i. Meetings and conferences in which the subject of terrorist
financing was on the agenda,
ii. Efforts in multilateral context
• Sec. of UST reservations about FATF, 2/6/01, RTR-4518
US efforts in UN to increase sanctions vs. Taliban, 12/15/00 (RDOS 03006577/74)
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» briefing for EU embassies. 8/21/98, rdos-6804


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• US-EU CT troika, CTF convention, strategy, 12/7/99, rdos-5729

b. What efforts were made against (with?) countries considered to be


supporters of terrorism
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i. Sticks: What sanctions were considered or levied
ii. Carrots: What benefits were considered for those who would
renounce support of terrorism
iii. Multilateral efforts and sanctions

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guidelines for approaching cnts re: NGOS, 11/5/99, rdos-7435

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memo re: efforts to get support vs. UBL, 9/14/98, rdos-6364


agenda w/ UAE. 3/6/00. rdos-5880

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1 urge host govts to investigate NGOs, 12/23/99, rdos-6653


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• SA mission budget, one line abt CTF, good overall description, US-SA, rdos-6402
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SA/UBL, history, assessment, 10/13/98, rdos-6708


SA/UBL, 1/11/99, rdci-1871
UAE7UBL. 3/29/99. rdci-1872
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' US-GCC senior level consultations, US presents UBL strategy, 8/7/00, rdos-5726

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US amb mtg w/ EGIS, outlines strategy incldg going after $, 3/27/96, rdos-6430

3.
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• re: US AML, US looking for ways to improve, little effect on fundraising by T orgs,
3/16/98, rdos-5145
• R discussing draft AML law w/ Europe, draft to Duma, 4/7/99, rdos-5727
• Canadian working on CTF legis, 6/4/99, rdos-6682
• EU legal regimes, no specific TF legis, 5/3/99, rdos-6686
• Italy regime, 10/4/01, rdos-5253
• AML reports, 99-01, rdos-4329B, C, D
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' training in Philippines. 7/6/01. rfbi-5481

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• description training, 6/17/98, rdos-6518/19


• French 99 annual terrorism report, no mention of TF, 12/2/99, rdos-6656

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Germany cd not act against AQ contacts be no law broken, 9/11/02, JI-0084


German law made prosecuting ML dffct, 12/10/02, JI
i. Legal authorities
ii. Intelligence

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iii. FIUs
iv. Private sector sophistication
b. Description and assessment of USG efforts to improve these abilities
i. Assessments
ii. Training
iii. Funding
iv. Role of various agencies (coordination, etc.)
• embassy Cairo proposed 5 yr training program, no mention CTF, rdos-6513
• Cairo notes that ML not big in Egypt, no laws against, 9/24/98, rdos-6512
• US trying to internationalize training efforts, include G-8 in FSAT visits, 3/18/02 (rdos-
5845)

D. What did the United States Government do to coordinate the disparate


agencies involved in identifying, tracking and disrupting terrorist finances?

III. Based on what we know about the 9/11 conspiracy, were there any key
opportunities to detect them as a result of their financial transactions? What
other lessons can be drawn from these financial transactions?

A. What do these transactions say about how organized, planned terrorist


operations operate within the US?

8. Were the anti-money laundering controls in place sufficient to detect the


types of movement of money involved here?

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• criminality
• KYC
• hawala/charity oversight
• wire transfers
• zakat and relnp bw charities and banks

C. Was there any concerted, contemporaneous effort to track known terrorists


cells through their financial transactions?

IV. What has al-Qaeda done since 9/11 to continue to support terrorist
operations and move money?

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V. What are we currently doing, and have these efforts eliminated the
deficiencies present before 9/11?

A. What is the current approach to gathering and analyzing intelligence on the


raising and movement of money in support of terrorist groups?

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B. What is the current approach to disrupting terrorist funding?

1. Description and assessment of the changes made, procedurally and


substantively, in the US effort to name terrorist groups
a ("jpnpral Hpgrrintirm rtf naminog gini-p Q/l 1

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C. What is the current regulatory environment?

D. What are the current efforts to generate international cooperation?

1. Description and assessment of structural changes within the USG


a. Description and roles of various agencies involved
b. Methods and effectiveness of interagency coordination
• UST vs. DOS in training, rdos-5927
• directive from DC/OMB re: CTF authority, 9/25/02, rdos-5922
• communications breakdown re: designation, 9/27/02, rdos-5689
• information dissemination to foreign govts
• notification to posts of interagency efforts to coordinate delivery of CTF training,
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decisions (general, not TF), 3/4/03, rdos-5680

E. What are the current mechanisms to coordinate government agencies?

VI. What specific, actionable policy recommendations can be made to improve


the current efforts in light of the lessons of 9/11?

do we undercut coop on intl efforts against AQ if broaden designations?

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