Efforts To Fight Money Laundering Face Challenges, U.S.

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U.S. D E P A R T M E N T OF STATE

INTERNATIONAL INFORMATION PROGRAMS

International Security | Terrorism

01 March 2004

Efforts To Fight Money Laundering Face Challenges, U.S.

Says
U.S. to bolster work in E. Africa, new regional bodies possible

The United States and its international partners continue working to identify, block and
freeze terrorist assets, but the pace of the work slowed in 2003 as more challenging
targets were pursued and as terrorists maneuvered to further protect their funds,
according to a new State Department report.

The department's annual International Narcotics Control Strategy Report (INCSR),

published March 1, devotes an entire volume to money laundering and financial crimes
and to the intensified crackdown on global crime networks following the September
2001 terrorist attacks against the United States.

As of December 2003, $140 million in terrorist assets had been blocked since
September 2001, about a 12 percent increase over the $125 million total at the end of
2002, the report said.

The INCSR attributed the slower pace in 2003 to a number of factors, including the
possibility that the most vulnerable criminal financial networks were dismantled with
relative ease immediately following September 11, 2001, and that terrorist
organizations have access to non-bank money channels — including trade, charities
and remittance services -- that are far more difficult for authorities to trace.

"Identifying and tracking funds through these alternative networks -- a tough enough
assignment even for countries with sophisticated anti-money laundering regimes — is a
staggering challenge for many of the key terrorist financing countries who are only now
beginning to develop competent anti-money laundering institutions," the report said.

The United States is working closely with other countries to promote the adoption and
enforcement of anti-money laundering and terrorist financing standards worldwide, the
report said. This work includes close cooperation among the Group of Eight (G-8)
countries — France, Germany, United Kingdom, Russia, Japan, Italy, Canada and the
United States - as well as within the multinational Financial Action Task Force (FATF),
which is the global standard-setter for anti-money laundering efforts.

The INCSR noted that two new FATF-style regional bodies may be established in the
crucial areas of the Middle East and Central Asia, and that the United States is
"significantly" enhancing its anti-money laundering programs in East Africa.

Also under consideration is the creation of an international network of Trade

Transparency Units (TTUs), which would focus on detecting anomalies in trade data —
such as deliberate over and under-invoicing -- that could indicate trade-based money
laundering, the report said.

http://usinfo.state.gov/topical/pol/terror/texts/04030107.htm 3/2/2004