The HAMAS Asset Freeze and Other Government Efforts To Stop Terrorist FinancingE. Anthony Wayne, Assistant Secretary for Economic and Business Affairs
Testimony Before the House Committee on Financial Services
September 24, 2003
Mr. Chairman and distinguished members of the Committee, thank you for the opportunity to testify on U.S. efforts to combat terrorist financing, including the recent U.S. designation of five HAMAS charities and six HAMAS leaders under Executive Order 13224.
The United States remains engaged in a long-term war against terrorism. I thank you for your support and for providing the necessary tools for waging this war. This fight requires actions on several fronts. A critical front is the effort to defeat, disrupt, and destroy the financial networks that sustain these organizations and finance their operations.
Before I address HAMAS, I believe it is important to recognize how far we have come in terms of U.S. Government interagency coordination when it comes to dealing with terrorist financing. We have made enormous strides in improving the degree to which all U.S. agencies with equities related to the pursuit of terrorist financing cooperate and coordinate their efforts. This strong interagency teamwork involves the intelligence and law enforcement communities, as well as State, Treasury, Homeland Security, and Justice collectively pursuing an understanding of the system of financial backers, facilitators, and intermediaries that play a role in this shadowy financial world. It involves the Treasury Department coordinating the policy process by which we examine actions to disrupt these financial networks. It involves the Department of Justice leading investigations and prosecutions in a seamless, coordinated campaign against the sources of terrorist financing. And it involves the State Department leading the interagency process through which we develop and sustain the bilateral and multilateral relationships, strategies, and activities, including the provision of training and technical assistance, to win vital international support for and cooperation with our efforts.
A Policy Coordination Committee established under the framework of the National Security Council and chaired by the Department of the Treasury ensures that these activities are well-coordinated. The Department of State, the Department of the Treasury, the Department of Justice, the Department of Homeland Security, intelligence agencies, and law enforcement agencies all work very closely together in this effort. The Department of Homeland Security is a recent addition to the framework, and we look forward to involving them in the disruption of terrorist networks. Our task has been to identify, track, and pursue terrorist financing targets and to work with the international community to take measures to thwart the ability of terrorists to raise and channel the funds they need to survive and carry out their heinous acts. We have briefed your staff in closed session and there may be questions you have that will need to be answered in a classified setting or for the record.
A key weapon in this effort has been the President’s Executive Order 13224, which was signed on September 23, 2001, just 12 days after the terrorist attacks of September 11. That Order provided the basic structure and authorities for an effort, unprecedented in history, to identify and freeze the assets of individuals and entities associated with terrorism across the board. Under that Executive Order, the Administration has frozen the assets of 321 individuals and entities. The agencies cooperating in this effort are in daily contact, looking at and evaluating new names and targets for possible asset freeze. However, our scope is not just limited to freezing assets. This is a collaborative, results-based, decision-making process, in which we all share the common goal of clamping down on terrorist financing. We have very successfully used other actions as well, including developing diplomatic initiatives with other governments to conduct audits and investigations, exchanging information on records, cooperating in law enforcement and intelligence efforts, and in shaping new regulatory initiatives. We recognize, however, that designating names is -- along with arrests -- the action that is most publicly visible. But designations are, in no way, the only action underway. Allow me to stress this point, particularly because some questions have been raised by commentators in this regard: Every approach the PCC has adopted regarding a specific target has involved extensive, careful work. We need to make sure we have credible information that provides a reasonable basis linking the individual or entity to terrorism; we need to weigh the options available to us for addressing the target; we need to identify the most effective approach, realizing that we may shift gears and adopt a different strategy later on. We want to be right, legal, and effective. In some cases we support public action, such as designations, in other cases we choose other methods, including law enforcement, intelligence, or getting another country to undertake law enforcement or intelligence action. At the end of the day, all our actions combined, and the efforts of countries around the world, have succeeded in making it more difficult for terrorists to move and collect funds around the world, in particular through regular banking channels.
Internationally, the UN's role in responding to the challenge of terrorist financing has been crucial: The UN helped to give international impetus and legitimacy to asset freezes and to underscore the global commitment against terrorist financing. This is extremely important, because: 1) most of the assets making their way to terrorists are not under U.S. control; and 2) when it comes to al Qaida in particular, it means that when an individual or entity is included on the UN’s sanctions list, all 191 UN Member States are obligated to implement the sanctions, including asset freezes. It has added a total of some 217 names to its consolidated list since September 11.
Let me now address the issue of the U.S.'s recent HAMAS designations. On August 22, the President announced the designation for asset-freezing of the following five HAMAS fundraisers: CBSP (Comite de Bienfaisance et de Secours aux Palestiniens), ASP (Association de Secours Palestinien), Interpal, Palestinian Association in Austria (PVOE) and Sanabil Association for Relief and Development. He also announced the designation of six top HAMAS leaders (Sheikh Yassin, Imad al Alami, Usama Hamdan, Khalid Mishaal, Musa Abu Marzouk and Abdel Aziz Rantisi). Earlier this year, the U.S. also designated for asset-freezing another HAMAS charity, the al Aqsa Foundation.
HAMAS' recent suicide bombings demonstrate the organization's commitment to undermining real efforts to move towards a permanent peace between Israel and the Palestinians. HAMAS and other Palestinian rejectionist groups must not be permitted to undermine the aspirations of the Palestinian people for a viable, secure state living side by side with Israel in peace and security. While the Palestinian Authority and Arab states have endorsed the roadmap devised by the Quartet, HAMAS continues to reject constructive efforts toward a peaceful solution to the Middle East conflict.
Shutting off the flow of funds to HAMAS is crucial to reducing HAMAS' ability to carry out its activities and to thwart progress towards peace. HAMAS is also clearly a threat to Palestinian reform, including Palestinians committed to a negotiated peace. HAMAS has used its charities to strengthen its own standing among Palestinians at the expense of the Palestinian Authority.
In light of this, the U.S. welcomed the EU's recent decision to designate HAMAS in its entirety as a terrorist organization. Previously, the EU had only designated Izzadin al Kassem, HAMAS' "military wing," as a terrorist entity.
We have also urged governments throughout the region to take steps to shut down both HAMAS operations and offices, and to do everything possible to disrupt the flow of funding to HAMAS and other Palestinian organizations that have engaged in terror to disrupt peace efforts. This is a sensitive issue, given that some of these financial flows are used to support charitable activities. There can be no doubt, however, that donations to HAMAS for charitable purposes free up funds for use in terrorism. We will continue to engage with regional governments to prevent any funding of HAMAS and other groups that have engaged in terror.
In all our discussions with EU governments on this matter, EU states have raised serious concerns about addressing the basic humanitarian needs of the Palestinian population. Even as we try to shut off the flow of funds to HAMAS, it is important to remember that a significant portion of this money has gone to provide extensive basic services to the Palestinian population -- services the Palestinian Authority has not yet successfully provided. This is a concern that the U.S. shares and is working with our Quartet partners and others to address. However, as long as HAMAS continues to rely on terrorism to achieve its political ends, we should not draw a distinction between its military and humanitarian arms, since funds provided to one can be used to support the other.
Let me comment briefly on one issue. In many contexts we have had candid and very useful exchanges on the concept of “diplomatic action.” Let me just briefly characterize for you the forceful types of actions that we refer to under the rubric “diplomatic action,” a phrase that we well know isn’t always assumed to be a synonym for “armed and dangerous.” But we would consider ourselves second to no agency in the forcefulness and persuasive potential of the tools at our disposal, as validated by the fact that, often, the interagency concurs on a recommendation to wield diplomacy as a weapon against terrorists. When we talk about diplomatic approaches for dealing with targets, we are talking about getting other governments to cooperate in the war against terrorist financing by taking concrete actions of their own, including law enforcement and intelligence actions, as well as getting them to speak out publicly against terrorist groups. It has involved encouraging foreign governments to prosecute key terrorists and terrorist financiers; to extradite a terrorist financier; to pass strong anti-terrorist financing legislation; to prohibit funds from being sent to a charity; and to make sure companies funneling funds to terrorists are shut down. Diplomatic action also means improving conditions for our colleagues in other agencies to work more effectively with their foreign counterparts in the fight against terrorist financing. The results obtained through such diplomatic strategies are crucial to our long-term success.
Through our interagency-supported training and technical assistance and capacity-building programs, we have identified and continue to identify important vulnerabilities and actively work with our partners to redress these concerns. We are also integrating the lessons learned into training programs for relevant U.S. agencies. Countries around the world are enacting important legislation and developing comprehensive counter-terrorism finance regimes to help give them the tools they need to combat terrorist financing; and the Financial Action Task Force (FATF), a group of 31 countries devoted to combating money laundering and the financing of terrorism, is developing international standards for legislation to combat terrorist financing. In this hemisphere, the OAS/CICAD [Organization of American States/Inter-American Drug Abuse Control Commission] Money Laundering Experts Group is drafting model laws and regulations that nations may adapt, enact, and implement to fulfill their FATF commitment to combat terrorist financing. We have made it more difficult for terrorists to move and collect funds, but we still have a long way to go given the dimensions of this challenge. Mr. Chairman, thank you for the opportunity to address this important issue.