Financing: Myth and Reality
by Rachel Ehrenfeld
The abovementioned UN Convention and resolutions
likewise apply in the Latin-American context, but area-specific
organizations such as the Organization of American States
(OAS) also bring their own antiterrorism provisions to the
table. Founded in 1948, the OAS includes all 35 independent
countries of the Americas, with Cuba alone denied participation
since 1962. OAS features a specialized committee against terrorism,
called the Comite Interamericano contra el terrorismo (CICTE),
which was created following two conferences, Lima in 1996
and Mar del Plata in 1998.
CICTE “has taken a lead in developing concrete strategies
for confronting the threat of terrorism. In its annual meetings,
it has recommended that countries enact a range of measures
to strengthen border security, tighten customs controls, and
improve the quality of identification and travel documents.
Other recommendations included financial controls to prevent
money laundering and the financing of terrorist activities.”
Partially in response to the September 11 attacks, OAS created
The Inter-American Convention against Terrorism. The treaty,
produced after the September 11 attacks, “seeks to prevent
the financing of terrorist activities, strengthen border controls
and increase cooperation among law enforcement authorities
in different countries, among other measures. It calls terrorism
“a serious threat to democratic values and to international
peace and security.” It entered into force on July 10, 2003,
and has been ratified by eight countries: Antigua and Barbuda,
Canada, El Salvador, Mexico, Nicaragua, Panama, Peru and Venezuela.
Article 4 of the Treaty outlines measures intended to prevent,
combat, and eradicate the financing of terrorism. Section
1 calls on state parties to institute a legal and regulatory
regime to prevent, combat, and eradicate the financing of
terrorism which includes “a comprehensive domestic regulatory
and supervisory regime for banks, other financial institutions,
and other entities deemed particularly susceptible to being
used for the financing of terrorist activities,” which shall
emphasize requirements for customer identification, record-keeping,
and the reporting of suspicious or unusual transactions. The
regime must also include “measures to detect and monitor movements
across borders of cash, bearer negotiable instruments, and
other appropriate movements of value,” subject to safeguards
that do not impede the movement of legitimate capital. Finally,
there is a provision for “measures to ensure that the competent
authorities…have the ability to cooperate and exchange information
at the national and international levels within the conditions
prescribed under its domestic law. To that end, each state
party shall establish and maintain a financial intelligence
unit to serve as a national center for the collection, analysis,
and dissemination of pertinent money laundering and terrorist
financing information” and inform the OAS Secretary General
of these designated units. Section 2 of Article 4 mandates
that state parties follow the recommendations “developed by
specialized international and regional entities, in particular
the Financial Action Task Force and, as appropriate, the Inter-American
Drug Abuse Control Commission, the Caribbean Financial Action
Task Force, and the South American Financial Action Task Force.”
Article 5 covers the seizure and confiscation of terrorist
assets. It mandates that each state party take necessary measures
to identify, freeze or confiscate for the purposes of possible
forfeiture “any funds or other assets constituting the proceeds
of, used to facilitate, or used or intended to finance, the
commission of any” terrorist offenses, both within and outside
the jurisdiction of the state party. Article 6 calls on each
state party to ensure that its domestic money laundering legislation
also includes those offenses established in the Convention.
Meanwhile, the IMF and World Bank collaborated to introduce
Financial Sector Assessment Programs (FSAP) intended to facilitate
efforts to promote the soundness of financial systems in member
countries. As part of the report, FSAP assess the country’s
framework to combat money laundering and terrorism. Available
reports for countries investigated can be found at http://www.imf.org/external/np/fsap/fsap.asp.
The IMF and the World Bank prepare Reports on the Observance
of Standards and Codes (ROSCs), which summarize the extent
to which countries observe certain internationally recognized
standards and codes, and are published at the request of the
member country. These may be found at http://www.imf.org/external/np/rosc/rosc.asp.
Back in 1990, the OECD’s Financial Action Task Force (FATF)
on Money Laundering established 40 proposals against money
laundering.56 These were revised in 1996 and in 2003. After
September 11, FATF amplified its 40 recommendations with eight
specific recommendations against terrorist financing. These
commit member states to 1) take immediate steps to ratify
and implement the relevant United Nations instruments; 2)
criminalize the financing of terrorism, terrorist acts and
terrorist organizations; 3) freeze and confiscate terrorist
assets; 4) report suspicious transactions linked to terrorism;
5) provide the widest possible range of assistance to other
countries’ law enforcement and regulatory authorities for
terrorist financing investigations; 6) impose anti-money laundering
requirements on alternative remittance systems; 7) strengthen
customer identification measures in international and domestic
wire transfers; and 8) ensure that entities, in particular
non-profit organizations, cannot be misused to finance terrorism.
Of the Latin American states, however, only Argentina, Brazil,
and Mexico belong to FATF, and until recently Guatemala was
actually listed as a non-cooperative country.
The following section covers anti- terror financing laws Argentina,
Chile, Colombia, Mexico, Panama, Paraguay, Peru, and Uruguay.
These Latin American countries have been dealing with terrorism
for years, and most already have counter-terrorism legislation
in their Penal Code. In addition, several countries have statues
to prevent and stop money laundering activities. Finally,
only a few of the countries investigated have laws that deal
specifically with the financing of terrorist activities. Nevertheless,
it should be noted that all countries investigated are part
of the international efforts to stop terrorism and the financing
of terrorist activities.
Tri-Border Region: Argentina, Brazil,
The area where the 3 countries meet has been
described as the regional center for the funding of Hizballah
and Hamas. This lawless area is also used for arms trafficking,
money laundering, and smuggling. There have also been unconfirmed
reports of an Al-Qaeda presence in the area.57 To address
the problem, the three countries and the US recently established
“Grupo 3+1,” which serves as a regional framework for discussion
and problem solving. On December 3, 2003, the delegations
of Argentina, Brazil, Paraguay and the United States met in
the city of Asuncion in the framework of the 3+1 Group on
Tri-Border Area Security to discuss and analyze preventive
actions against terrorism. The discussions covered terrorist
training, the strengthening of financial institutions, money-laundering
legislation, the financing of terrorism, drug and arms trafficking,
border controls, as well as cooperation on the exchange of
information and law enforcement on this matter.58
Argentina does not have legislation to deal
specifically with the crime of financing of terrorism, and
its regulations regarding support of terrorism and criminal
association insufficiently cover the area of terrorist financing.59
According to the State Department’s “Patterns of Global Terrorism,
2003” report, Argentina lacks new anti-terrorism legislation
despite its oft-stated commitment to the fight against terrorism.60
Argentina’s Article 210b covers crimes by unlawful association,
mandating a prison term of 5-20 years to individuals that
take part in, cooperate, or help to form and maintain an illicit
group that endangers the National Constitution. It is essentially
an anti-conspiracy law which goes into effect if at least
two of the following conditions are met: a) the group is composed
of ten or more members; b) it is organized in a military manner;
c) it is composed of cells; d) it has military weapons or
powerful offensive explosives; e) it operates in more than
one political jurisdiction; f) it is composed by one or more
military or security officials; g) it has connections with
similar domestic or foreign organizations; or h) it receives
aid or direction from public officials. Its anti-money laundering
legislation includes Drug Law no. 23.737 (1989) and its Bill
on Money Laundering, Law 25.246 (2000), which creates the
Financial Information Unit (FIU).
Argentina has yet to bring to justice former President Carlos
Menem and his associates for facilitating Hizbollah’s activities
and bombings of the Buenos Aires Jewish Center and the Jewish
Embassy in 1992 and 1994, respectively.
Brazil is a member of the Financial Action
Task Force and has extensive legislation criminalizing terrorist
offences.61 The main legal texts regarding terrorism are the
Penal Code, The Code of Criminal Procedure, the National Security
Act, the Heinous Crimes Act, the Act for the Oversight of
the Export of Services and Items for Military Use, Dual-Use
and Use in the Nuclear, Chemical or Biological Fields, the
Money Laundering Act, and the Act establishing the Brazilian
Intelligence System (SISBIN).
Law No. 9.613 of March 3, 1998 first defined and criminalized
money laundering, laid out the principal preventative measures
and established the Financial Intelligence Unit.62 This unit,
known as the Financial Activities Control Council (COAF),
oversees financial and non-financial entities that fall outside
of the jurisdiction of the major supervisory authorities.63
Brazilian law prohibits money-laundering, or converting the
proceeds of a crime into licit assets, and punishes it with
three to ten years in prison, along with confiscation of the
funds involved.64 Knowingly using the proceeds of crime in
a group set up to commit terrorism is punishable by 30 years
in prison. Supporting a terrorist organization or committing
criminal acts to fund such a group also constitutes the crime
of financing terrorism. In Brazil, narcotics trafficking is
considered to be the single largest generator of criminal
proceeds, followed by firearms, contraband and illegal gambling.
An individual found guilty of money laundering automatically
surrenders any assets generated by the predicate offence to
the government; this includes proceeds obtained from or for
terrorist groups as well as the funds of individual terrorists.
The secrecy provisions of Brazilian banking law once posed
a significant obstacle to the system’s effectiveness, as they
prevented the COAF from accessing some portions of reports
or from providing them to a foreign jurisdiction. However,
the government passed a complimentary act for the lifting
of bank secrecy rules in the course of criminal investigations,
especially ones having to do with terrorism. The Code of Criminal
Procedure and international agreements govern instances in
which seizure of assets requires two countries to recognize
the crime. Brazil participates in the MERCOSUR working group
on terrorism. It is party to the Convention for the Suppression
of the Financing of Terrorism and the United Nations Security
Council resolution 1373 (2001). However, despite its sound
foundation, the relatively-new Brazilian anti-money laundering
system has not yet resulted in any successful prosecutions
or convictions, and if Brazil’s past implementation of laws
is any guide, it is unlikely that any headway in fighting
terror financing is to be made.
Paraguay recognizes that it lacks effective
counter-terrorism legislation, and acknowledges the possible
laundering of funds used towards terrorist causes. It has
asked other governments for assistance as the shortcomings
of its own national legal system leave it incapable of prosecuting
suspected terrorists.65 Despite these shortcomings and a low
rating on Transparency International’s Corruption Perceptions
Index 2003, it has sent to trial Hezbollah fundraisers. Two
of these — Sobhi Fayad and Ali Nizar Dahroug — were sentenced,
albeit under laws that covered crimes of tax evasion rather
than terrorist financing.66 Fund collector Assad Ahmad Barakat,
who was accused of terrorist financing by the US Department
of Treasury, was likewise extradited from Brazil to Paraguay
in 2003 for tax evasion.67
Uruguay is party to eight of the 12 international
conventions and protocols relating to terrorism. “Although
Uruguay does not have the financial or military resources
to play a direct role in the war on terrorism, it provides
troops to international peacekeeping missions in Africa and
the Middle East. In 2002, Uruguayan law-enforcement authorities
assisted with international investigations to monitor the
movements and activities of suspected terrorists, and the
Parliament is currently drafting new terrorism laws that will
further facilitate domestic and international counterterrorism
efforts. The Uruguayan Government readily cooperates with
US Government requests to investigate individuals or financial
transactions linked to terrorism.”
Cooperation has not been flawless, however. Egypt has asked
Uruguay to extradite suspected al-Gama’a al-Islamiyya (Islamic
Group) terrorist al-Said Hassan Mokhles, wanted in connection
with the 1997 attack on tourists in Luxor, Egypt. He has been
held in Uruguay since early 1999 on charges of document fraud,
but Uruguay and Egypt have been unable to agree on the terms
for extradition, in part because Egypt has not guaranteed
in writing that Mokhles will not be subject to the death penalty.”68
While Colombia has no specific laws regarding
terrorism financing, some of the laws in the area of money
laundering are applicable.69 New measures in the Colombia
Penal Code raised the rank of a crime of willfully providing
funds for terrorist acts or to engage in terrorist activities.
Although Colombian legislation contains no specific procedure
for ‘freezing’ funds or financial assets of persons or entities
suspected of supporting terrorist activities, any assets linked
to criminal activities, including terrorism, are subject to
confiscation by order of the Prosecutor-General in the context
of a criminal procedure, as provided in article 67 of the
new Code of Criminal Procedure.70
Article 343 of the Penal Code defines terrorism and establishes
a penalty of 10-15 years plus fine. Article 345 stipulates
a penalty of 6-12 years for those who administer money or
goods related to terrorist activities.71 Furthermore, the
Penal Code’s chapter on money laundering mandates the reporting
of any suspicious transaction. Accordingly, “any employee
or director of a financial institution or savings and loan
cooperative who, with a view to concealing or disguising the
illicit origin of the money, fails to comply with the control
mechanisms established by the legal system with respect to
cash transactions, shall be liable to a term of imprisonment.”
Both Decree No. 663 of the Financial Institutions Statute
and Act No. 190 of the Anti-Corruption Statute require the
reporting of irregularities. Moreover, Article 53 of the Organic
Statute of the Financial System (EOSF) expressly prohibits
the operation of informal banks in Colombian territory. The
Superintendent of Banks is likewise charged with ensuring
that no one undertakes informal or irregular banking activity
in Colombia, and is empowered to conduct inspection visits
to suspect locations as well as to adopt necessary preventive
The Financial Analysis Unit of the Ministry of Finance concludes
agreements with financial tracking bodies in other countries
to exchange information used in carrying out initial checks,
with particular reference to recent international measures
to combat Colombian terrorist groups.72
There are no specific laws covering the financing
of terror activities in Chile, although terrorist acts are
defined in the Penal Code and their prosecution is provided
for.73 In 2003, Chile approved a Financial Intelligence Unit
“with the goal of preventing the use of the financial system
and economic sectors for criminal acts as named by the law”
but subsequent rulings of the Constitutional Court eliminated
the FIU’s sanctioning powers, limited its discretion in requesting
date on suspicious transaction records and denied its access
to information protected by bank secrecy, thus hindering investigations
and the disclosure of potential offences. Likewise, securities
firms, insurance companies and foreign exchange retail operators
also fall short in monitoring compliance.
Also noteworthy is Iquique, a port city and free trade zone
in Chile, which the Bush Administration has designated as
a terrorist hot spot. There have been ties between Iquique,
Hizbollah and the Tri-border region, and investigators are
focusing on individuals of Pakistani origin running businesses
in Iquique that could have links with Islamic groups operating
on the Pakistani-Afghan border.
The financing of terrorism is not characterized
as an individual offence under Mexico penal law, but various
penal characterizations and provisions may be applied in order
to prosecute and punish specific types of conduct considered
to constitute the financing of terrorist acts.74 Mexico’s
geographic situation and extensive financial sector means
that drug smuggling, financial crime, organized crime and
trafficking in arms and human beings all contribute to the
accumulation of illegal assets. The anti-money laundering
law of 1990 was reinforced by the government in 1997, and
progressive improvements have eliminated remaining loopholes,
defined requirements and generally added to the system’s effectiveness.
The Mexican Bankers Association has put in place a comprehensive
training program, and the National Banking and Securities
Commission (CNBV) has created examiners manuals that cover
money laundering, in addition to the CNBC’s annual on-site
supervision of institutional money-laundering controls and
Article 400b of the Penal Code broadly covers money laundering
offences and gives a court the discretion to reverse burden
of proof regarding the origin of the property given sufficient
proof by the prosecution. Few convictions have been attained
under this law, however, and many cases remain stuck in court
or under investigation. Mexico is about to complete the procedures
to become a party to the International Convention for the
Suppression of the Financing of Terrorism. It is also studying
the legislative reforms that will be required in order to
make the financing of terrorism an autonomous offence. Mexico
is also working actively with global initiatives, especially
with the Financial Action Task Force on Money-Laundering (FATF),
of which it is a full member, to implement international policies
against the financing of terrorist organizations.
Mexico has already met or exceeded most of the FATF minimum
requirements for preventive measures in the financial sector.
The key operational bodies in the anti-money laundering system
are the Attached General Directorate for Transaction Investigations
(DGAIO) of the Secretariat of Finance and Public Credit and
the money laundering unit of the General Attorney’s Office
(PGR). These well-resourced units have been very active in
introducing and promoting money laundering legislation, and
serve a central coordination and cooperation function. However,
bank secrecy laws impede the direct and timely transmission
of reports to the DGAIO and of criminal investigation requests
to financial institutions. The elimination of burdensome intermediary
steps would result in reports being transmitted more quickly.
To date, there have been no reports on the freezing of terrorist
assets in Mexico.
Panama, the center for all sorts of money-laundering
in Central America, is a good example of how lip service can
be paid to the war on terrorism by passing all the appropriate
laws. It not only has a special law, which Law 50 added with
a special chapter on terrorism (VI) to Title VII of the Second
Book of the Penal Code, it also has laws to prohibit terror
financing. Chapter VI defines terrorism as “belonging to an
unlawful organization whose goal it is to alter constitutional
order and public safety”, and punishes it with 15-20 years
imprisonment. Financial Intelligence Unit (FIU), established
by Presidential Directive No. 163 in 2000. It has also signed
and ratified most international conventions and treaties on
money laundering, including the 40 + 8 FATF recommendations.
It has also passed two extensive pieces of domestic legislation,
Law #48 (2003) and article 3 of Law 50 (2003), to improve
oversight of financial institutions and boost control of financial
transactions and operations. Article 264-B goes on to say
that those who intentionally finance, fund, hide or transfer
money or goods to be used in any of the terrorist acts mentioned
before likewise receive 15-20 years in jail.
Peru’s long struggle with the Sendero Luminoso
has provided for anti-terrorism legislation. Decree Law No.
25475 of May 199275 punishes the crime of terrorism and Article
2 defines a terrorist as “anyone who carries out acts against
the life, physical integrity, health, freedom or security
of individuals or against property…or affects the international
relations or safety or society or the State.” Article 4 of
the Decree criminalizes collaboration with terrorists, including
securing, collecting or supplying any goods or means or aid
to further the goals of a terrorist group. Under this Decree
Law, providing economic assistance “for the purpose of financing
the activities of terrorist elements or groups shall be punished
by a term of imprisonment of not less than 20 years.” Laundering
of funds from narco-terrorism is also penalized under Article
296-B of the Peruvian Penal Code by life imprisonment. Since
2001, “new laws have been enacted to permit more effective
investigation into cases of corruption.” These laws may also
be used to investigate terrorist actions. Procedural Act No.
27379 provides for special restrictions on individual rights
during preliminary investigations. This includes the freezing
of assets and the lifting of bank secrecy and tax confidentiality.
Supreme Decree No. 084-2001-RE of 2001 ratifies the International
Convention for the Suppression of the Financing of Terrorism.
Like many other Latin American states, Peru has also created
a Financial Intelligence Unit under Law No. 27.693 (2002).
Despite the laws on the books of European
and Latin American states, cases pertaining to terror financing
are rarely brought to court. To Kantor, this trend suggests
that “absent a dramatically different approach, efforts at
interdicting flows of terror money could prove even less successful
than efforts at interdicting flows of drug money. The sums
involved in terrorist operations and terrorist capital expenditures
are far smaller than the many billions of dollars spent each
year as part of the illegal drug trade.”76 Thus, to make the
war on terror count, signatories to the abovementioned national
and international legislation must aggressively check all
terror-sponsoring regimes, including Saudi Arabia, Syria,
Iran and the Palestinian Authority, the same way as the US
did the Taliban in Afghanistan.
For its part, the US should try to persuade international
financial organizations to withhold financial aid from terror-supporting
countries, and to sanction such states as Saudi Arabia, Iran,
Indonesia, Sudan, Libya and North Korea. For too long, America’s
non-confrontational approach towards “friendly” regimes such
as the House of Saud has undermined the safety of its citizens
in return for political expediency.77
Yet even when America is proactive, European states impede
transatlantic cooperation on combating terror financing. They
argue that new anti-money laundering laws aimed at broadening
the US government’s power over the assets of foreign individuals,
businesses and financial institutions fall outside the provisions
of mutual legal assistance treaties signed between Washington
and most European countries. But as Schmahl has argued, “in
times of globalization and transnational operation, terrorism
can no longer be dealt with solely by means of isolated action
but has to be addressed in addition through the cooperation
of all States even in criminal prosecution matters.” Across
Justice and Home Affairs (aka. the “third pillar”), if not
across the Atlantic, the new terrorist threat has been a strong
impetus for legal cooperation and integration.78 In addition,
unilateral U.S. action is bound to be ineffective if alternative
financial centers are able to operate outside the reach of
Heraldo Muñoz’s UN Security Council Analytical Support and
Sanctions Monitoring Team recently found that changing Al-Qaeda
terrorist methodology called for new anti-financing measures.
Its August 2004 report stated that “while the sanctions against
the financing of terrorism have had some effect, and some
millions of dollars in assets have been frozen, there is scope
to update them based on how al-Qaeda now raises and transfers
its money.” While national and international action is said
to have decreased Al-Qaeda’s funding, its need for money may
have also decreased. The number of people in camps under its
control is now much smaller, and it no longer has to pay $10-20
million annually to its Taliban hosts. But Al-Qaeda’s growing
popularity has probably increased the flow of money to the
organization and its surrogates, thus its need to move new
funds around. This growing popularity means that more new
sources and new methods are utilized to channel the money,
and therefore new regulations are needed to better trace the
movement of the funds. Measures to curb the abuse of hawala,
cash couriers, and Islamic charities could further slow the
movement of terrorist moneys. Reports submitted by UN Member
States under resolution 1455 show that a legal basis for freezing
Al-Qaeda and related terrorist assets now exists in all but
three Member States.
However, the UN Security Council Monitoring Team found the
reporting culture of some Member States partially to blame
for the poor, nonspecific quality of their reports, and more
importantly for their failure to act. States often found it
easier to report what had been done politically rather than
at the operational level. This prompted the Monitoring Team
to suggest a half-baked solution—voluntary visits to those
states most at risk from Al-Qaeda infiltration. But since
these visits have to be agreed upon by the states in question,
the element of surprise and discovery is greatly diminished.
While legislation establishing a legal framework for terror
financing countermeasures is a basic prerequisite, it accomplishes
little without proper enforcement. Instead, a pervasive lack
of cooperation, objectivity and political will allows those
who finance terrorism to remain beyond the pale of the law.
Special thanks to Alex Angert, and to Edith Tsouri for the
help with the research
About the Author
Dr. Rachel Ehrenfeld’s latest book is Funding
Evil; How Terrorism is Financed and How to Stop It (Bonus
Books, 2003, 2004) Her previous book are: Evil Money, Encounters
Along the Money Trail (HarperCollins in 1992, SPI, 1994),
and Narco-Terrorism; How Governments around the World used
the Drug Trade to Finance and Further Terrorist Activities
(Basic Books, 1990&1992). She is the director of the New
York–based American Center for Democracy, and the Center for
the Study of Corruption & the Rule of Law. Dr. Ehrenfeld
is a sought-after commentator and consultant and expert witness
on of terror financing, international terrorism, political
corruption, money laundering, drug trafficking, and organized
crime and the connections that binds these groups together.
Dr. Ehrenfeld has lectured on these issues, has advised banking
communities, law enforcement agencies, and governments in
many countries. Most recently, she consulted for the U.S.
Defense Department’s Threat Reduction Agency, and testified
in court and before a Grand –Jury in terror financing cases;
before the European Parliament on how the Palestinian Authority
uses aid money to fund its terror activities, and provided
evidence to the UK Parliament on the corruption of the PA.
Dr. Ehrenfeld is Board member of the Committee on the Present
Dr. Ehrenfeld’s articles appear in the Wall Street Journal,
The Washington Times, the National Review, the Euobserver,
The Jerusalem Post, and The NY SUN. She frequently appears
as an expert commentator on television news programs, including
The O’Reilly Factor, Fox News, CNN, ABC, NBC, and MSNBC. She
addressed the Nixon Center, The Heritage Foundation, The Hudson
Institute; The Middle East Forum; The Committee on Foreign
Relations; The Commentator’s Circle (London, UK), The Jerusalem
Summit, the Singapore International Conference on National
Security, and many other national and international events.
Dr. Ehrenfeld worked as a research scholar at New York University
School of Law, a visiting scholar at the Columbia University
Institute of War and Peace Studies, and as a fellow at Johns
Hopkins’s SAIS. Her Ph.D in Criminology is from the Hebrew
University School of Law.
Tel: 212-399-4246; Fax: 212-399-4244;
e mail: firstname.lastname@example.org;
1. “Grassley and Baucus
Call for ‘Fundamental Reform’ Within War on Terror Financing.”
US Senate Committee of Finance. March 29, 2004. www.senate.gov/~finance/press/Gpress/2004/prg032904a.pdf,
2. Stuart A. Levey. Under Secretary, Terrorism and Financial
Intelligence U.S. Department of the Treasury. Testimony before
the Senate Committee on Banking, and Urban Affairs. September
29, 2004. http://www.treasury.gov/press/releases/js1965.htm
4. “Three Years of Progress in the War on Terror.” The White
House. October 22, 2004.
5. Kantor, Mark. “Effective Enforcement of International Obligations
to Suppress the Financing of Terror.” The American Society
of International Law. Task Force on Terrorism. September 2002.
http://www.asil.org/taskforce/kantor.pdf, p. 2.
6. Schmahl, Stefanie. ‘Specific Methods of Prosecuting Terrorists
in National Law.’ Presented at the Max Planck Society Conference
entitled “Terrorism as a Challenge for National and International
7. S/RES/1526 (2004). http://www.treas.gov/offices/enforcement/ofac/legal/unscrs/1526.pdf
8. Schmahl, p. 3.
9. Schmahl, p. 14.
10. S/RES/1373 (2001).
11. Kantor, p. 6.
12. The projects can be found at http://www.unodc.org/unodc/en/terrorism.html
13. Schmahl, p. 16.
14. “Anti-Terrorist Finance Group Reauthorized for Eight Years.”
Embassy of Japan. May 14, 2004. http://japan.usembassy.gov/e/p/tp-20040517-03.html
15. Matthew Levitt. “Terror on the UN Payroll?” Peacewatch.
No. 475. October 13, 2004.
16. “Israel Arrests 13 UN Employees.” UPI. October 5, 2004.
17. Michael Freund. “Canada Refuses to Cut UNRWA Funding.”
Arutz-7 Israel National News. October 25, 2004. http://www.israelnationalnews.com/news.php3?id=70964
18. Matthew Levitt. “Terror on the UN Payroll?” Peacewatch.
No. 475. October 13, 2004.
19. The Terrorism Act (2000): http://www.hmso.gov.uk/acts/acts2000/20000011.htm
20. The Anti-Terrorism, Crime and Security Act (2001): http://www.legislation.hmso.gov.uk/acts/acts2001/20010024.htm
21. The Supreme Court of the Judicature, Court of Appeal (Civil
Division), On Appeal from the High Court of Justice, Queen’s
Bench Division (Mr. Justice Gray), HQ03X01813 and HQ03X01775.
Citation Number  EWCA (Civ) 983. May 11, 2004. Jameel
and Another vs. Times Newspapers Limited. http://www.courtservice.gov.uk/judgmentsfiles/j2687/jameel-v-times.htm
22. Michael Mcdonough. “England Orders Terror Group Assets
Frozen.” Lancaster Online. October 14, 2004. http://www.lancasteronline.com/pages/news/ap/4/britain_terror_assets
23. European Council Regulation 2580/2001. December 27, 2001.
24. A full listing of EU anti-terror legislation is available
at CELEX address: http://europa.eu.int/
25. HAMAS relies for its funding on Saudi Arabia.
26. “Managing European Taxpayer’s Money: Supporting the Palestinian
Arabs – A Study in Transparency.” Funding for Peace Coalition.
August 2004. www.honestreporting.com/.../reports/ FPC_Report_on_EU_Funding_of_Palestinian_Terror3_Corruption(pdf).asp
27. “Managing European Taxpayer’s Money: Supporting the Palestinian
Arabs – A Study in Transparency.” Funding for Peace Coalition.
August 2004. www.honestreporting.com/.../reports/ FPC_Report_on_EU_Funding_of_Palestinian_Terror3_Corruption(pdf).asp,
and Dr. Rachel Ehrenfeld, as interviewed by the Funding for
29. Written Question E-2033/04 by Theresa Villiers (PPE-DE)
to the Commission and E-2033/04EN Answer given by Mr. Patten
on behalf of the Commission. October 20, 2004.
30. Issam Abu Issa, former chairman of the Palestine International
Bank. “Arafat’s Swiss Bank Account.” Middle East Forum. http://www.meforum.org/article/645#_ftn3
31. “Syria-EU Association Agreement-Signing.” SANA: Official
Syrian News Agency. October 19, 2004. http://www.sana.org/english/headlines/19%2010/syria3.htm
32. Adopted by the Council on March 6, 2002.
33. Adopted by the Council on May 27, 2002.
34. “International Narcotics Control Strategy Report: Germany.”
Bureau for International Narcotics and Law Enforcement Affairs.
March 2004. http://www.state.gov/g/inl/rls/nrcrpt/2003/vol2/html/29921.htm
35. Section 129a: Formation of Terrorist Organizations.
36. Directive 2001/97/EC of the European Parliament and of
the Council of 4 December 2001.
37. Gesetz zur Bekämpfung des international terrorsimus. (Combating
Terrorism) Law of 9 Jan 2002 in Bundesgesetzblatt I pg. 361,
in force 1 Jan 2002; and Law of 22 Aug 2002 in Bundesgesetzblatt
I pg. 3,390, which amends the Criminal Code regarding foreign
criminal and terrorist organizations and enables confiscation
38. “International Narcotics Control Strategy Report: Germany.”
Bureau for International Narcotics and Law Enforcement Affairs.
March 2004. http://www.state.gov/g/inl/rls/nrcrpt/2003/vol2/html/29921.htm
39. “Specter Calls for Criminal Prosecution of Financial Contributors
to HAMAS.” August 6, 2002.
40. “Countering Terrorist Financing an International Concern.”
German Embassy, Washington D.C. May 26, 2004. http://www.germany-info.org/relaunch/business/new/bus_money_laundering_conf.html
41. “Measures taken by the German government to fight international
terrorism.” The Federal Government of Germany. October 27,
42. “International Narcotics Control Strategy Report: Germany.”
Bureau for International Narcotics and Law Enforcement Affairs.
March 2004. http://www.state.gov/g/inl/rls/nrcrpt/2003/vol2/html/29921.htm
43. “Loi n° 96-647 du 22 juillet 1996 art. 1 Journal Officiel
du 23 juillet 1996” and “Loi n° 98-467 du 17 juin 1998 art.
84 Journal Officiel du 18 juin 1998” at http://www.legislationline.org/.
The Code of Criminal Procedure, sections 706-16–706-25-1,
is likewise at http://www.legislationline.org/
44. Loi 647 of 22 Jul 1996 (prevention of terrorism, amending
the Criminal Code, Code of Criminal Procedure and Civil Code)
in Journal officiel pg. 11,104. This act is embodied in the
texts of the various codes, e.g., Criminal Code, sections
45. Charles Duelfer. “Comprehensive Report of the Special
Advisor to the DCI on Iraq’s WMD.” October 6, 2004. http://www.lib.umich.edu/govdocs/duelfer.html
46. “Riforma della legislazione nazionale del turismo.” L.
135/01. Parlamento Italiano. March 29, 2001.
47. “Conversione in legge, con modificazioni, del decreto-legge
12 ottobre 2001, n. 369, recante misure urgenti per reprimere
e contrastare il finanziamento del terrorismo internazionale.”
L. 431/01. Parlamento Italiano. December 14, 2001. http://www.parlamento.it/leggi/elelenum.htm
48. See www.interno.it
50. “Fact Sheet: Designation of Ten Individuals Tied to an
al Qaeda Cell in Italy.” U.S. Treasury Office of Public Affairs.
March 18, 2004. http://www.treasury.gov/press/releases/reports/js1243factsheet.pdf
51. “U.S. Designates Additional Members of Italian Al Qaeda
Cell.” Department of the Treasury. June 24, 2004.
52. Dale Fuchs. “Spaniard Says Drugs Financed Train Bombings.”
International Herald Tribune. April 15, 2004. http://www.iht.com/articles/515273.html
53. Federal law 130-FZ of July 25, 1998 can be found at http://www.fas.org/irp/world/russia/docs/.
Federal law 103-FZ of July 24, 2002, Federal law 112-FZ of
July 25, 2003 and Federal law 114-FZ of July 25, 2002 can
be found in SZRF 2002 no. 30, item 3,028, at www.foreignlawguide.com/ip/flg/
54. Jill Dougherty. “Chechen ‘claims Beslan attack’.” CNN.com.
September 17, 2004.
55. “Ideofact.” September 26, 2004. http://www.ideofact.com/archives/000389.html
56. See http://www1.oecd.org/fatf/40Recs_en.htm
57. “Patterns of Global Terrorism, 2003.” U.S. State Department.
58. “Communiqué of 3+1 Group, December 2003.” Inter-American
Committee Against Terrorism. http://www.cicte.oas.org/documents.htm59.
According to the GAFI(FATF) report in lavadodedinero.com60.
“Patterns of Global Terrorism, 2003.” U.S. State Department.
61. A partial list of legislation concerning the suppression
of terrorism financing, money laundering, and freezing assets
includes Complementary Act 105 of January 2001, Articles 1,
9; the Code of Criminal Procedure, Decree-Law 3689 of October
1941, Articles 125-144, sections VI, VII; the Constitution
of Brazil, Articles 5, 173, 225; the National Security Act,
Act 7170 of December 1983, Articles 20, 24; the Penal Code,
Article 91; Decrees No. 3267, 3755, 3976, and 4150; Articles
21 and 26 of the Civil Code; Article 66 of Act No. 10406 of
the New Civil Code; Act 9532/97, Articles 12, 15; and Act
9790/99, Article 4.
62. Act 9.613 of March 3, 1998. Articles 1, 2, 4, 8, 9, 10,
11, 14 (Amended by PLS-117/2002).
63. COAF (Consejo de Control de actividades financieras) Resolutions
No. 01 (1999), No. 03 (1999), No. 04 (1999), No. 05 (1999),
No. 08 (1999), No. 09 (2000) approved legislation making the
financing of terrorism a crime.
64. “Brazil.” International Human Rights Law Institute. October
65. “Patterns of Global Terrorism, 2003.” U.S. State Department.
66. Marc Perelman. “Tracking Terror’s Money Trail in Lawless
Frontier.” The Forward. December 13, 2002.
67. “Commentary: Brazil extradites terror suspect.” UPI. November
18, 2003. http://quickstart.clari.net/qs_se/webnews/wed/bb/Ubrazil-terror.RsAC_DNI.html
68. “Patterns of Global Terrorism, 2003.” U.S. State Department.
69. This includes the Anti-corruption Statute, Act No. 190:
reporting of irregularities; Article 325 of the Penal Code:
non-compliance with control mechanisms; Decree No. 1957: reporting
of documents linked to money-laundering activities; Financial
Institutions Statute, Decree No. 663: reporting of irregularities;
Act No. 333, Article 2, paragraph 4: termination of ownership
rights; and Article 67 of the Code of Criminal Procedure:
freezing of any assets linked to criminal activities, including
70. “Colombia.” International Human Rights Law Institute.
October 24, 2004.
71. Colombian Penal Code, Section 345 – Management of Resources
Linked to Terrorist Acts.
73. Marcelo Venegas. “Proyecto de ley que crea la unidad de
analysis financiero y modifica el codigo penal en material
de lavado de dinero.” Comunidad Virtual de Gobernabilidad.
74. These include the Federal Organized Crime Act, Article
29; the Federal Penal Code, Articles 40 and 41; and the Federal
Code of Criminal Procedure, Article 181. Legislation may be
found at www.law.depaul.edu/institutes_centers/ ihrli/_downloads/publications/Mexico.pdf
75. For a comprehensive list of legislation, see www.law.depaul.edu/institutes_centers/
76. Kantor, p. 13.
77. Rachel Ehrenfeld. Funding Evil. Illinois: Bonus Books,
78. Schmahl, p. 43.
79. Kantor, p. 15.