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U.S. tries new ways to stop terror financing

Reuters News
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Posted: Sep 08, 2011 5:33 PM
U.S. tries new ways to stop terror financing

By Rachelle Younglai

WASHINGTON (Reuters) - Terrorists are increasingly turning to robberies and kidnappings to raise money, U.S. officials said on Thursday, posing problems for governments as they work to choke off funding for the groups.

Al Qaeda has raised funds by robbing banks, and the group's North African wing, AQIM, has raised tens of millions of dollars since 2008 through kidnappings, officials said.

The Obama administration has tried to disrupt al Qaeda and other terrorist groups' funding networks, which it says try to tap into the banking system without being detected.

"We are concerned that as terrorist networks come under more pressure, they will turn increasingly to crime and criminal networks to help fund and facilitate their operations," said John O. Brennan, assistant to the president for homeland security and counterterrorism.

"The nexus of crime, terror, and corruption is extremely worrisome, particularly for its capacity to generate new and substantial sources of funding that could fuel terrorist operations against the United States and our partners," he added.

Brennan and other top government officials spoke at a conference examining progress in thwarting terror financing since the September 11 attacks.

Policymakers, including Treasury Secretary Timothy Geithner, have applauded the agency's efforts to shut much of the formal banking sector to terrorism financiers. But some say al Qaeda is making a greater effort to look elsewhere for cash.

"They are turning to other ways to raise money," said Matt Olsen, director of the National Counterterrorism Center.

David Cohen, Treasury under secretary for terrorism and financial intelligence, said it is "notoriously difficult" to combat "kidnapping-for-ransom."

"If ransoms are paid, we must make it more difficult for terrorist groups to move, store and use that cash," he said.

Since 2004, a specialized group within the Treasury has been working to starve insurgents of funds through several measures, including financial sanctions that prohibit U.S. transactions with designated companies and entities.

The Treasury has deployed staff to Afghanistan, Pakistan and the Gulf in order to better track finances of al Qaeda, the Taliban and other terrorist groups. By 2010, the administration believed al Qaeda was in its "worst financial position in years" and that funding problems had begun to hobble the group's ability to operate.

But those successes have driven insurgents to seek other ways to move money, such as through cash couriers.

This is a significant problem, experts said.

"Very often, authorities don't recognize the importance of cash movement," said Mike Smith, the director of the United Nations Counterterrorism Executive Directorate. "(Countries) need to have laws in place to stop the movement of cash."

(Reporting by Rachelle Younglai; Editing by Dan Grebler)