9/11 anniversary: We remember - our obligation to battle terrorism financing
For those who lost family and friends on 9/11 the pain may be as fresh today as it was 14 years ago. We remember.
While
politicians on both sides of the Atlantic embraced the “war on terror,”
we are all still coming to terms with the human pain and horror of
9/11, London’s 7/7, this summer’s attacks in Tunisia and the seemingly
daily havoc caused by Islamic State in the Middle East.
Today
is rightly about remembrance, but we also all owe it those who lost
their lives – so many from business and finance – to evaluate how far
the financial community has come with governments and regulators in
clamping down on terrorism financing and how much further we need to
travel if we are to help starve the constantly morphing viruses of
modern terrorist cell networks.
Before 9/11 there was little impetus for banks to
know the origins of client money let alone clients’ clients. After 9/11
US legislators pushed through in rapid succession a raft of legislation
which allowed the US Treasury to “follow the money” and put
counter-terrorism on the front-foot on a global scale, helped by the
international nature of dollar-based transactions. UK legislation
followed suit.
Spurred chiefly by anti-money
laundering rules, banks and businesses which handle money have so many
obligations for filing Suspicious Activity Reports (SARs) that financing
terrorist attacks on the scale of al-Qaeda’s 9/11 should have become
far harder. The US’s Patriot Act has given extra territorial obligations
for US dollar transactions. The UK’s Anti-terrorism Crime and Security
Act 2001 deals with reporting requirements for suspected terrorist
finance and allows for powers to seize on suspected finances of
terrorists and terrorist organisations. Those powers were enhanced
further via the Prevention of Terrorism Act 2005.
But
we cannot sit back. Terrorist organisations are entrepreneurial and
adapt rapidly to create immunity from counter-terrorist financing
regulations. Terrorists are operating on an increasingly local scale
while aiming for acts with a similar harm and global impact as 9/11.
Some
banks now have to file so many SARs that their value can diminish if
banks approach them as part of a defensive reporting culture. The UK’s
Financial Intelligence Unit annual report reveals however increased
filings of SARs around counter terrorism financing and better use of the
SAR database for counter terrorism research, resulting in more leads to
operational police and security services.
Big
clearing banks meanwhile are looking to de-risk and exit from backing
the sort of money-changing chains that help keep financing going between
the developed and less developed world, ones that may also fall prey to
small cash transfers that may fund local terrorist cells.
Source: http://www.cityam.com/224141/911-we-remember-our-obligation-battle-terrorism-financing
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