Tracking Terrorist Assets

MODERATOR: Good afternoon, ladies and gentlemen. It's my pleasure this afternoon to introduce Dr. John B. Taylor, the undersecretary for International Affairs at the U.S. Department of Treasury. With him today, and possibly also at the podium during the questions, is Mr. Rick Newcomb, who is the director of the Office of Foreign Asset Control at the Department of Treasury.

Today our guests would like to confine their discussions to the question of tracking terrorist assets only. So, in the limited time we have, I think if you would focus your questions on those issues, we'd get a lot more out of the session.

Thank you, gentlemen.

Let me just say, when we get to the questions, please wait for the microphones, which should be in either aisle; introduce yourself by name and organization. Thank you so much.

MR. TAYLOR: Okay, thank you very much. I'd like to talk today about the effort to combat the financing of terrorism around the world, and what has happened today in particular.

Today is really another shot in the war against the financing of terrorism. The first shot was fired back on September 24th when President Bush signed an executive order naming 27 terrorists, and those associated with terrorists. Two more shots were fired in October and November, totaling another 61. Today there is a very significant increase in this activity, and in particular, two organizations that have a worldwide network of financing terrorism have been designated. One is Al-Barakaat and the other is Al Taqua. The entities associated with these organizations, which have been designated explicitly on the list, amount to another 62. So if you add all these entities up, there's a total of 150 names of individuals and organizations that are either terrorists, associated with terrorism, or financing terrorism.

Al-Barakaat is an organization that is global in its reach. It's operating in at least 40 countries. It's a financial conglomerate. Its headquarters are in Dubai and UAE. It has an activity which enables individuals to transmit cash around the world from one country to another. The terminology that's usually referred to that activity is the hawala process. The financial organization includes many such hawalas around the world.

The significance of this organization with respect to the combatting of the financing of terrorism is that money earned in this process is skimmed off and transmitted directly to al Qaeda and other terrorist organizations. The founder of the organization, Mr. Jim'ale is an associate of bin Laden himself.

Al Taqua, the other organization, is also involved in cash transfers, and has been seen and known to be advising al Qaeda and other terrorist organizations.

I'd also like to report today about the extraordinary amount of international cooperation that the United States is getting in this activity.

There has been 184 countries and jurisdictions that have pledged support to this effort, to combatting the financing of terrorism. As I speak, we note that there are at least 112 countries that have issued blocking orders to their banks and other financial institutions that call for the freezing of assets associated with terrorists. We are keeping track of the -- as best we can of the amount that is frozen or blocked and the number of accounts. As of this date, the numbers we have is that $44 million have been blocked worldwide, 27 (million dollars) in the United States and 17 (million dollars) in other countries, and those numbers are rising as we speak due to the activities today.

The United States is also engaged in other countries in providing technical assistance. Technical assistance is needed for countries that want to help in this effort but don't have the resources or the capacity to do so. So the United States has organized, along with other countries through the United Nations, an effort to provide technical assistance to countries in need of it, so that they can better go at the terrorists themselves.

This is a long effort. The actions that have been taken today, which President Bush, Secretary O'Neill, and Secretary Powell have discussed, are another shot. There's going to be more coming up. This is a significant one because of the global nature of these organizations, but it's an effort that's going to be continuing. It's a daunting task, but one in which we're going to win if we continue to put the efforts in that we have had globally so far.

So with that, I'll take questions, along with Mr. Newcomb. Yes?

Q I see South Africa's on the list. If you could just elaborate on the presence of Al-Barakaat and Al Taqua in South Africa, and if you are getting assistance from the South African in freezing those assets -- what the assets are and what assistance are you getting from the South Africans?

MR. TAYLOR: We have had direct talks with the South African government. They've pledged their cooperation and they are taking efforts in this regard.

With respect to the specific entities in South Africa, I think we're going to have to leave that to a question you'd address to the South African government themselves.

Q Andrei Sitov from TASS, Russia. A similar question that's about something we don't see on the map. As I understand, it the two groups are not present in the former Soviet Union that I remember our minister of Finance, during his recent visit, telling us that the Russian authorities were in fact a part of that effort -- a part of those 112 countries, and that they did in fact find some financial sources used by terrorists. Presumably they meant the Chechens. My question to you, sir, is, do you know whether these two groups were involved in funding other terrorist organizations other than the al Qaeda group?

And second of all, could you comment on the Russian participation in that in general?

MR. TAYLOR: Russian participation in this effort has been excellent. And they have made every effort from the very beginning here. Remember, President Putin was the first foreign leader to contact President Bush about the attack on September 11th, and ever since that day there's been cooperation.

The -- Finance Minister Kudrin attended a meeting held in Washington with the other seven finance ministers of the largest industrial countries, worked along with them to indicate hat Russia was going to do. That's basically a degree of cooperation that I've found in this job unprecedented.

The particulars about this organization and this map -- let's be very clear; this is not a map that says the 112 countries that are blocking or -- at this point in time, or the 184 that are cooperating. These are the countries for which we know for sure that there are operations of Barakaat or Al Taqua.

The fact that there's some countries that are not designated doesn't mean we know for sure that they're not there, but the red countries, the ones that -- are ones where we have the evidence at this point in time.

Q But what are you saying at this point -- you do not have information that these two organizations are working in the former Soviet Union. Do you know about others that --

MR. TAYLOR: I would say what we have is the evidence that's -- on the red for these countries. And with respect to what's going on in the other countries, again, I would suggest that you address the Russian authorities.

But the main thing here is your question about -- the cooperation has been extraordinary.

Q And another follow-up to that is, why, then, were not the Russians invited to the recent FATF gathering here?

MR. TAYLOR: I understand that the Russians have been -- just passed the money laundering law this summer, which is a very significant event. They have been in the process of implementing that law, redirecting it in the way of terrorist financing. And that organization, of course, has been set up for a long time to -- on the money laundering issue. So it's a process that's going to take time before every country joins it. But I would hope that eventually every country in the world could join FATF and go after these terrorist assets. But it's something that we're going to have to work to, depending on each country, gradually.

Yes? Yes? You calling?

MODERATOR: Yeah.

MR. TAYLOR: Okay.

MODERATOR: Let's take you first.

Q Damian Milverton from Dow Jones. We have seen some countries enacting laws to be able to block accounts, but what action in terms of actual arrests or pursuit of the individuals behind these things? Is the Interpol or any national government on the verge of or having already arrested anyone?

MR. TAYLOR: Well, let me say there was an arrest in the United States today.

With respect to other countries on this issue, maybe I could have Rick Newcomb answer the question.

MR. NEWCOMB: We anticipate other countries taking similar blocking action. If there are violations of their criminal law, then we would anticipate they would take the same steps. But the first step here is blocking the property as required under U.N. Resolutions 1333 and 1373, and reporting that back. If there's concomitant violations of criminal law, then, of course, those kinds of actions we'd expect as well.

MODERATOR: Let me take Ferguson, and then we'll go to Uda.

Q Barbara Ferguson, Arab News.

Number one, could you talk about the arrests today in the United States? Number two, would this be available to us on the Internet to download and send to our newspapers?

MR. TAYLOR: We will make this available as soon as we can. If not, on -- if not on the Internet, in some other form, yes.

With respect to your first question, I'll -- Mr. Newcomb?

MR. NEWCOMB: Please, if you'd repeat your first question. I'm sorry.

Q The person that you arrested today in the United States?

MR. NEWCOMB: Okay. Those were for related activities involving the manner in which they were operating the organization. It was not directly related to the blocking action per se. It was not a criminal violation of the blocking action. It related to the activities that they were engaged in under other criminal laws.

Q Could we have the person's name or know the --

MR. NEWCOMB: The number is one, and the person's name we'll get for you.

Q My real question was, there's been some reports that the U.S. government is not satisfied with Saudi Arabia and the way that they have not been allegedly clamping down on money distribution there. Could you comment on this, please?

MR. NEWCOMB: We've had cooperation from Saudi Arabia. We've discussed these issues. We've met with them. They're taking blocking actions, so we have no sense in which there's not cooperation. There's going to be more cooperation in the future, based on our experience so far.

Q Sir, you said that this organization is based in Dubai. Did the U.S. have consultations with the Gulf countries there before you announced this? And how much cooperation you are getting from them, especially the Emirates? Dubai is part of the Emirates.

MR. TAYLOR: We have had cooperation from the United Arab Emirates in particular on this matter. And we have had consultations. We've had teams working in the United Arab Emirates, and on this particular issue, there's a tremendous amount of cooperation. I think the details of how that has worked in this case I'd like Mr. Newcomb to answer, as well, about actually what happened in the UAE today.

MR. NEWCOMB: The notice of blocking actions was provided by the United Arab Emirates to key officials in both Emirate, the confederation in Dubai.

And we will be getting information back about how much was blocked. But we were assured that they would fully participate, and in conversations with the U.S. embassy today, it's my understanding they have.

MODERATOR: (Calls on reporter.)

Q And can you say anything about were the Gulf countries notified --

MODERATOR: We'll let --

Q (Off mike.)

MR./Q She wanted to know if the Gulf countries were notified.

MR. TAYLOR: Yes, they were.

Q Doctor -- (name inaudible) -- Business Day of South Africa. Just to follow up my colleague, what are you asking the South Africans or any other government to do about individual entities of Al-Barakaat -- (inaudible) -- you know, you have a list of subsidiaries and entities in South Africa -- (off mike).

MR. TAYLOR: Well, what we're asking them to do is to block the accounts and freeze them, as we are asking every country to do. It's the exact same issue. And this also applies in the same way to what we ask for the names on previous lists. So conceptually what's -- this is a global effort. The United States has put in -- puts blocking orders on financial institutions and banks in the United States. Through the cooperation that we're getting, every country in the world ultimately is going to put these blocking order on. Now we've got cooperation from 112 countries very explicitly at least, and some who can do something close to that. Some require laws being passed. But conceptually it's blocking and freezing these accounts and informing the authorities about what those accounts actually are and how much there is in them. So it's the blocking order that's being requested.

Q Just to follow up. And you -- in the U.S. you are closing offices of Al-Barakaat. You are asking other governments to close offices and maybe expel people who work for them, for example.

MR. NEWCOMB: We're asking other -- we're giving other governments information about Al-Barakaat activities in their countries. We have blocked pursuant to U.N. Resolutions 1267, 1333 and the executive order signed by the president on September 24th. It's a mandatory requirement of the United Nations to take actions for member states when these individuals and entities have been identified. To give them this notice so that they can take similar action is the purpose.

MODERATOR: The gentleman here.

Q Chris Hanste (sp) with AFX News. Mr. Secretary, we heard just before you came in that apparently there are 212 countries and entities in the world all told. Obviously borders are extremely porous and there are so many of them. And if you look at how much is transferred internationally in terms of money every day, if you were to include foreign exchange trading, it's over a trillion dollars a day. I'm just wondering, how optimistic are you that you will be able to in the end truly put a stop to international terrorist financing?

MR. TAYLOR: I'm optimistic. As I said in the beginning, it's a daunting task, and you're giving some of the reasons why it's so daunting. There's many ways that people can shuffle money around the world. These organizations, however, are quite significant, operating in 40 countries around the world, servicing, transfers of cash, skimming money off the top to fund terrorists. So that in itself is a dent in the operation. And as we do more and more of this, it'll start to thwart the financial activity. And I do emphasize, as I said at the beginning, the idea of having this be global, because you're right, there are places that people can get through, and other means. But as you close the networks down one by one, day by day, it eventually accumulates. And I am optimistic that there's -- this is a focus which is not -- as I emphasized, not just the United States.

The cooperation is, in my experience in international affairs, unprecedented. It's -- I spend a lot of time talking to my colleagues around the world, asking what they're doing, and every single time it's cooperation. It's "we'd like to help. We have our own problems with terrorists, we want to stop terrorists." And so I believe, based on my experience through this, I can't be anything else but optimistic about it. But it's a tough, daunting job.

MODERATOR: I can take a question. Any more from this side? Okay, then, we'll take Haled.

Q Haled al-Kadeem (sp) with Middle East News Agency of Egypt. Due to well know sensitivities in the Middle East, there is a belief that the administration is cracking down on Islamic charity activities, and this is making some sort of misunderstanding. What measures is the administration taking to ensure that there's no mix between Islamic charity funds and funds which go to so-called terrorist groups? This is one thing. The other thing is -- it's about the fact that some groups unknowingly provide funds or collect funds which somehow, sometime go to al Qaeda and other terrorist groups. What's the status of such groups which unknowingly provide funds in a way? Thank you.

MR. TAYLOR: The first question, with regard to NGOs, humanitarian groups, charitable organizations in Islamic countries or anywhere, the United States and the world community is not by any means trying to focus on charitable organizations or NGOs. On the contrary, this humanitarian effort that is provided by such groups is essential, and the United States is adding to that. Such -- in Afghanistan, for example, as humanitarian aid is very significant and will grow over time. And charitable organizations in the Islamic countries are very much part of that.

There are cases where funds do get moved through organizations of all kinds. The ones we're talking about today, which are not charitable, but sometimes charitable and -- we want to get at those because the terrorists -- it's funding terrorist activity. We are taking every effort -- that's why we're being so deliberative about putting names out and putting out lists -- being very careful about being sure that there are evidence of terrorists being involved. So that's how we're doing it -- carefully, decisively, and clearly.

And I believe that -- with respect to the second part of your question, how can we -- I think really, how can we encourage more of this -- of the activity on the humanitarian front and the charitable front. I think it is by emphasizing, as we're trying to do, that we're concerned that the charitable activity continues. It's very important. It's -- the United States and our partners in this activity want it to continue.

If there's a -- for some reason an individual who does not know about contributions, then we don't want to accuse that individual. But if there's knowingly involvement -- if an individual is knowingly involved in a action that is funding terrorism or supporting terrorism, then that individual is not on our side in this activity, and we want to be sure that that's clear to everybody. If you're -- as President Bush has said, if you're funding terrorists or supporting terrorists, then you're on the same side of the fence as the terrorists, and not on our side.

MODERATOR: Thomas?

Q Thomas Gorguissian, Al Wafd, Egypt. You mentioned the number 44 million which has been frozen globally. How much is that in compare what you are expecting to froze? I mean, it's like half of it, quarter of it, 1 percent of it, 5 percent of it?

My second question is regarding the countries that are cooperating. I don't know -- I mean, last week other officials were, like, reluctant to say how much they are cooperating or not, a country like Egypt, for example. Last week when you announced some organizations, some countries, it was reported some countries in the Middle East they announced, at least reported, that they are reluctant -- or not reluctant, not ready to completely cooperate regarding Hamas or Hezbollah.

And my last question is regarding the June 2002. It's mentioned in one of these papers that we got it that it was the full implementation. What is that date? I mean, what does it mean? And what does it mean after that?

MR. TAYLOR: You have three questions. The first question about the 44 million and how is that going to grow, we don't know for sure how much it's going to grow, but we know there's a lot of money out there that's funding the terrorists, and we want to get as much of that as possible. And it's going to grow, but it's just not possible at this point to describe how much it will be. But there is a lot of money that we'd like to corral and prevent from going to these activities that are killing people at this point in time.

Last Friday there was a list put out that the United States calls Foreign Terrorist Organizations. That list has been available for a long time for the United States because these are organizations that have been designated very carefully as terrorist organizations from the United States perspective. That was to be consistent with the rest of U.S. policy, that is, it was put on the executive order, so we had consistency with our whole government. This group now is going back to the al Qaeda, bin Laden activities, and therefore it's different than that other list itself. So I just wanted to be clear about that.

With respect to the June deadline, maybe Mr. Newcomb can answer that?

MR. NEWCOMB: If you'd put a little context on the June deadline, maybe I can give you a more precise answer.

Q One of the papers it's released by White House Office of Press Secretary.

MR. NEWCOMB: I think that refers to something like status --

Q (Off mike) -- invited action plans from all countries to ensure full implementation by June 2002.

MR. TAYLOR: Oh, okay. Yeah. The FATF group met here in Washington last week, and they are developing an action plan which basically has the idea of translating what they have been doing to combat money laundering and redirect it or better focus it towards terrorist activity. And that involves documenting what terrorists normally do so it's easier for financial institutions to find those and make their reports to the regulatory authorities. And the deadline there, as someone kindly pointed out, represents the fact that, as all actions plans in this area, we want to have deadlines so that they get done by a particular point in time. So that's what that happens to be.

Q And about how much cooperation from Egypt?

MR. TAYLOR: We've had cooperation from Egypt. We've met with the financial leaders and have gotten cooperation. So it's certainly in the group of countries that I've indicated are cooperating.

MODERATOR: Greg?

Q Greg Torode of the South China Morning Post, Hong Kong. I'm very surprised to see that neither Hong Kong nor most of Southeast Asia is mentioned, given that it has a rising Muslim population and, you know, serves as a regional banking hub.

Are you worried that these groups may be using other methods in that part of the world, given the fact that small-scale remittances is a very common business over there?

MR. TAYLOR: This is a significant network, but it's not all there is. It's just like any other business, really. If you're seeing -- you look at one entity, it's going to cover part of the globe. Another entity, another part of the globe. We had the question about Russia. Clearly, activity like this occurs in every country. This is -- the hawala activity occurs as a business so that individuals can transmit money to their relatives. And so it exists all over the place, just like banks exist all over the place. And so we're not saying that there's not this activity in Southeast Asia or Indonesia. Malaysia, by the way, is designated there.

But I think the -- what you should think about here is this is one very significant one, and what's so significant about it now is it is channeling money of the earnings of recent immigrants, frequently, who have come to, say, the United States, or to Norway, or to Canada, to make a living and send the money back to their relatives, to their wives or to their mothers, to their grandparents. And al Qaeda is taking that money, taxing it and sending it to do damage around the world, in every single country. And that's why we want to take this on. And it's a start. It's not the whole world, but it's a significant part of the world, as you can see.

Q So you believe that al Qaeda is actually using other organizations as well, outside of these two?

MR. TAYLOR: There's no question that al Qaeda has a lot of means of raising funds, and this is a very significant one. And in the weeks ahead, in the months ahead, there'll be more information of this kind coming out.

MODERATOR: We have time for one more question.

If not, I want to thank you, Dr. Taylor, Mr. Newcomb, and thank you, ladies and gentlemen.    

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