An Update on the Global Campaign Against Terrorist Financing Second Report of an Independent Task Force on Terrorist Financing Sponsored by the Council on Foreign Relations Maurice R. Greenberg, Mallory Factor, Vice Chair William F. Wechsler and Lee S. Wolosky, June 15, 2004 The Council on Foreign Relations is dedicated to increasing America's understanding of the world and contributing ideas to U.S. foreign policy. The Council accomplishes this mainly by promoting constructive debates and discussions, clarifying world issues, and publishing Foreign Affairs, the leading journal on global issues. The Council is host to the widest possible range of views, but an advocate of none, though its research fellows and Independent Task Forces do take policy positions. Please visit our website at www.cfr.org. THE COUNCIL TAKES NO INSTITUTIONAL POSITION ON POLICY ISSUES AND HAS NO AFFILIATION WITH THE U.S. GOVERNMENT. 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For further information about the Council or this Task Force, please write to the Council on Foreign Relations, 58 East 68th Street, New York, NY 10021, or call the Director of Communications at (212) 434-9400. Visit our website at www.cfr.org. Copyright © 2004 by the Council on Foreign Relations®, Inc. All rights reserved. Printed in the United States of America. This report may not be reproduced in whole or in part, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and excerpts by reviewers for the public press), without written permission from the publisher. For information, write the Publications Office, Council on Foreign Relations, 58 East 68th Street, New York, NY 10021. FOREWORD Few aspects of the global war on terror are as inscrutable as the battle being waged on the financial front. Money for al-Qaeda and other terrorist groups is raised and moved worldwide and channeled through a web of institutions and individuals. The United States, other governments, the UN, and a range of international organizations have grappled with how best to address this daunting challenge. My predecessor, Leslie H. Gelb, established the Independent Task Force on Terrorist Financing in 2002 to evaluate U.S. efforts to disrupt the financing of terrorist activities. The first report, chaired by Maurice R. Greenberg, concluded that although al-Qaeda's finances had been disrupted, they had not been destroyed-and that as long as al-Qaeda retained access to a viable financial network, it would remain a threat to the United States. The initial report recommended a series of steps to ensure a more effective U.S. and international response to al-Qaeda's global financial network. Subsequent world events—including the May 2003 Riyadh bombings and the war in Iraq-made it clear that a further review of efforts of the U.S. and Saudi governments to curtail terrorist financing was warranted. In this update, the Task Force reports both on important achievements and on the work that remains to be done. The Task Force, composed of a bipartisan group of experts from the foreign policy, business, law enforcement, and intelligence communities, makes a series of recommendations to redouble efforts to frustrate al-Qaeda's financial network. This Task Force, would not have been possible without the leadership of Maurice R. Greenberg. I am grateful to Hank for continuing to spearhead this effort. I am also pleased that Mallory Factor has teamed up with Hank to serve as his vice chair. Thanks, also, to William F. Wechsler and Lee S. Wolosky, who continued to serve as co-directors of this update, which makes another important contribution to an issue of vital national and international importance. Richard N. Haass President Council on Foreign Relations June 2004 ACKNOWLEDGMENTS This report is the result of the hard work and support of a number of dedicated individuals of both political parties who seek to further critical national interests. We are, once again, grateful for the hard work and dedication put forth by all Task Force members. Our members brought unique backgrounds and areas of expertise to this complicated issue, and all worked hard to reach consensus under a tight schedule. Much of the information concerning the subject of terrorist financing is highly classified. The report of this Task Force, comprised entirely of former governmental officials and private citizens, is necessarily limited to the realm of the unclassified. Moreover, the response of foreign nations to the financing of terrorism is frequently exceptionally nuanced. Conclusions regarding the nature and adequacy of that response are necessarily shaped by the social and professional backgrounds of those drawing the conclusions. Not unrelatedly, while sometimes public pressure is indispensable in diplomacy, it can also be the case that pushing too hard and publicly on sensitive matters can risk entrenchment and less progress on important issues than can more cautious and discrete approaches. Nevertheless, with those caveats in mind, we hope that this report will help promote an informed debate and discussion in our open society on the public record concerning a subject that remains largely opaque. We are particularly grateful to our chair, Maurice R. Greenberg, for his stewardship of this project and his broader leadership in assuring continued attention to, and scholarship on, issues at the intersection of global finance and national security. Sustained attention to these issues will be critical to the success of the U.S.-led war on terrorism. With the limited exception of work now being performed by the Watson Institute for International Studies at Brown University, they are, to the best of our knowledge, the subject of no other sustained, appropriately funded scholarship at U.S. universities, think tanks, or nongovernmental organizations. We also wish to thank Mallory Factor, the Task Force's vice chair, for his dedication to these issues and his extraordinary efforts to advance the mission of the Task Force. The Task Force's deliberations benefited considerably from input from senior members of the U.S. Treasury Department and the National Security Council, and from discussions with officials of the Central Intelligence Agency. We are extraordinarily grateful to the U.S. officials |