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163: Kenneth Dam Financial Front of the War on Terrorism

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FROM THE OFFICE OF PUBLIC AFFAIRS June 8, 2002 PO-3163 THE FINANCIAL FRONT OF THE WAR ON TERRORISM -THE NEXT PHASE Kenneth W. Dam Deputy Secretary of the Treasury Delivered to the Council on Foreign Relations New York, New York The financial front of the war on terrorism has entered a new phase. This new phase is characterized by increased leadership by our coalition partners and increased focus on means of financing terrorism outside the mainstream financial system. At the same time, the United States must and will remain vigilant in preventing terrorists from abusing its financial system. Today, I shall describe how the financial front of the war on terrorism has evolved toward this new phase. The first phase of the financial front of the war on terrorism was dominated by public designations of terrorists and terrorist supporters and attempts to freeze their accounts. To be sure, this was - and remains - an important aspect of the fight. We must close the world's financial system to known terrorists and their financiers. To date, we have had considerable success. Since September 11, we and our coalition partners have publicly designated 210 terrorists or terrorist supporters. We have frozen over $115 million around the world. 166 countries and jurisdictions have blocking orders in force. We still have work to do on this effort. Not every country has joined us in blocking every identified terrorist or terrorist supporter. Also, we have to make sure that countries do more than just add names to a list. We need to - and we do continually follow up with them to ensure that their regulators and financial institutions are out there giving teeth to their blocking orders. Designations and blockings dominated the early phase of the financial front of the war on terrorism for several reasons. First, the United States and many other countries (but by no means all) could quickly put in place a legal infrastructure to carry out the designations and blockings. In the United States, all that was immediately necessary was to promulgate an executive order invoking the President's authority under the International Emergency Economic Powers Act to go after not just terrorists but also their financial supporters, to announce the designations, and to transmit the blocking orders to U.S. financial institutions. Second, public designations highlighted the need for countries without adequate legal infrastructures to enact laws and regulations that would allow them to close their financial systems to terrorists. When we started our effort even countries like Canada and Japan did not have legislation criminalizing terrorist fundraising. Many countries lacked the legal infrastructure to adopt and implement blocking orders on terrorist assets. Public designations by the U.S. and our allies highlighted these deficiencies and prompted countries to address them.

Third, joint designations provided an opportunity to highlight international

http://www.treas.gov/press/releases/po3163 .htm

5/5/2003