Enhancing Counterterrorism Sanctions: Progress since 9/11 to Adapt to Evolving Threats
It is an honor to speak at the Annual International Conference on Counterterrorism. It is particularly meaningful for me to speak before this audience on the anniversary of 9/11, as we pay tribute to the nearly 3,000 victims of the 9/11 attacks.
Every American and many around the world remember where they were on September 11th, 2001. This date and the images replayed of the attacks awaken deep emotions and stir the souls of Americans and our friends and allies. I was living on Capitol Hill that year, just a few blocks from the U.S. Capitol. I remember first watching the news from home that morning as we saw reports of the first plane, loaded with thousands of gallons of jet fuel, flown like a missile into the first World Trade Center tower. Who can forget the images of those buildings collapsing as innocent people were trapped inside?
I was clerking at the Supreme Court that day. At work that morning, a few of us crowded around the television as we watched the news unfold. I recall a friend calling to tell me I needed to get out of the building. I told her that I needed to get organized first. She sharply (and correctly) responded, “You need to get out of the building now.” Soon after, a number of other law clerks and I started running together down Pennsylvania Avenue, away from the Capitol. It was impossible to get through to anyone on a cell phone but I distinctly remember the moment that I finally reached my mother to tell her that I was safe.
The world soon learned that another plane crashed into the Pentagon. I remember hearing a very loud boom. I don’t know for certain if that sound was the Pentagon plane, but it shook our world to the core.
As we all know now, a fourth plane was also heading toward Washington possibly targeting the White House or the U.S. Capitol, which is right across the street from the Supreme Court, where I had been anxiously watching TV that morning.
We would later learn of the unbelievable courage and sacrifice of American patriots Todd Beamer and other passengers onboard United Flight 93, who may have saved the lives of so many of us in Washington that day. They also preserved institutions that sit at the heart of the free world. We all hold the deepest debt of gratitude for their sacrifice. We are intensely grateful to them and just as intensely sorry for their families who suffered so much that day. Those losses were not singular to the United States. More than 90 countries lost citizens that day.
Our world changed 18 years ago as we were, together, forced to confront new faces of evil. This conference represents the many countries and extraordinary expertise dedicated every day to the memory of those who perished on 9/11 and every other heinous act of terrorism perpetrated around the world. I’m proud to look into the many faces in the audience today who are part of an enduring international coalition to counter terrorism.
We have put aside whatever political differences our countries may have. Together we have worked to defeat the forces behind Al Qa’ida and ISIS, to combat Iranian-sponsored terror proxies like Hizballah and HAMAS, and to deter radical successor groups that continue to spawn.
We must perpetually evolve our fight against terrorists as we share tactics, strategies, and information to prevent another attack from ever occurring again.
Treasury’s History, Post-9/11 Mission Change, and TFI Today
As the Under Secretary for Terrorism and Financial Intelligence, or TFI, it is my greatest honor to lead the U.S. Treasury Department’s efforts to counter terrorism around the world through the tools that we have to disrupt terrorist financing.
The mission of the Treasury Department shifted focus instantaneously on the morning of 9/11, but our components are built on a long legacy of adapting to emerging threats. Our U.S. sanctions program was actually borne out of an effort to keep billions of dollars out of the hands of Hitler and the Nazis during World War II. In fact, the first Executive Order of what has become our sanctions program was issued the day after Hitler invaded Denmark and Norway. On that day, President Roosevelt ordered that all of those countries’ U.S. held assets be frozen so that Hitler could not access them. The U.S. would follow suit every time Hitler invaded a new country. That didn’t prevent the atrocities of the Holocaust — but imagine how much worse it could have been had Hitler had access to those funds.
As a child of Holocaust survivors, it has been particularly meaningful to me to lead this great organization and to develop and implement strategies to keep money out of the hands of malign actors 80 years after the United States Treasury Department first worked to keep billions of dollars out of Hitler’s grasp.
Today, TFI is recognized as an international model for how to effectively unite economic, regulatory, and diplomatic authorities to combat terrorism. We are made up of close to 900 dedicated career professionals. Just as during World War II, our mission is focused around the fundamental precept that bad people need resources and money to do bad things.
TFI is comprised of the Office of Foreign Assets Control (OFAC), which is the beating heart of our sanctions programs; the Financial Crimes Enforcement Network (FinCEN), which safeguards the international financial system from illicit use and money laundering; the Office of Terrorist Financing and Financial Crimes, which develops policy and conducts extensive international outreach; and the Office of Intelligence and Analysis, the only intelligence office in the world that is integrated into a finance ministry.
Given the breadth of our mission and authorities, when I travel around the world, I routinely meet with diverse counterparts in ministries of finance and foreign affairs, with central banks and regulators, and with intelligence and national security agencies to talk to them about how we can jointly counter threats that all of our countries face.
TFI took its current shape in the years following the 9/11 attacks. Two weeks after the attacks, President Bush signed an Executive Order expanding Treasury’s authorities to target terrorists and their financiers around the world. This global counterterrorism sanctions authority enabled Treasury to target terrorists and their networks worldwide, regardless of where they operate.
This Executive Order has become the preeminent U.S. Government counterterrorism sanctions tool, and the Treasury and State Departments have used it to sanction over 1,500 individuals and entities involved in terrorism. We have sanctioned thousands more under complementary authorities. Our broad range of authorities and expertise, backed by intelligence, allows us to turn terrorist financiers into international pariahs overnight.
Examples of TFI Actions Under Trump Administration
Since the start of the Trump Administration, in our many sanctions programs, TFI has issued more than 190 tranches of sanctions targeting more than 2,600 individuals, entities, vessels, and aircraft. This includes snapping back sanctions on the world’s largest state sponsor of terrorism, the Iranian regime. In 2018, OFAC sanctioned more terrorists and supporters of terrorism than in any of the last 15 years.
For example, last year we sanctioned an oil-for-terror network that was part of a complex scheme to trade Iranian oil, through a Russian company and a subsidiary of the Russian Ministry of Energy, to Syria, to finance the IRGC and its Qods Force, and ultimately, Hizballah, and HAMAS. Mohammad Amer Alchwiki, seen in this picture smoking a cigar on stacks of hundred dollar bills, was the mastermind of this scheme. Alchwiki is now an international pariah and complicit Central Bank of Iran officials – and indeed the entire network – are under U.S. sanctions.
We similarly used our authorities to target the Basij Force (Basij), another paramilitary group under Iran’s IRGC. Tragically, the Basij recruits and trains child soldiers and then deploys them to the battlefields of Syria and other IRGC-fueled conflicts across the region, where they often fight and die. As you can see in these pictures, during their training, the IRGC and Basij disturbingly use the faces of American and Israeli leaders and the Star of David for target practice as part of Iran’s campaign to radicalize young minds.
When we sanctioned the Basij, we sanctioned the entire network and its multibillion-dollar companies, many of which have had significant international dealings across the Middle East and Europe.
The day after these designations, the sanctioned entities saw their share values drop. The eight companies lost a combined total of 12.3 trillion rial, or $293 million, in market value and anyone who continues to do business with them could be subject to our secondary sanctions.
Under the Trump Administration, we have also concentrated our efforts on combatting Hizballah’s global financial networks.
Since 2017, we have sanctioned Hizballah supporters in more than 20 countries, including in Europe, West Africa, and across the Middle East. In 2018 alone, Treasury designated over 40 Hizballah-affiliated individuals and entities, more than in any previous year.
These sanctions are demonstrably working. Hizballah, which historically relied on upwards of $700 million per year in support from the Iranian regime, is now begging for donations. In March, their leader, Hassan Nasrallah, made an unprecedented call to his supporters pleading for fundraising efforts to be “stepped up” after highlighting the financial pressure caused by our sanctions.
Employees of Hizballah’s media and military systems are also complaining of deep pay cuts. This lack of funding ultimately degrades their malign influence, and is the direct result of our pressure on Iran and its terror proxies.
Network Sanctions Central to Counterterrorism Strategy
In just the last three weeks, we have continued to ramp up the pressure across our counterterrorism portfolio, including Hizballah, HAMAS, and Iran’s other militant and terrorist proxies. We also continue to target ISIS and Al-Qa’ida with a loud and steady drumbeat of impactful counterterrorism actions.
On August 29, Treasury designated Hizballah’s bank-of-choice in Lebanon, Jammal Trust Bank. In addition to knowingly providing financial services to Hizballah’s Executive Council, they work with the Martyrs Foundation, which funnels stipends to the families of suicide bombers. This group directly subsidizes and incentivizes those who commit acts of terror against innocent victims.
On August 29, we also targeted a terror network moving millions of dollars between the Iranian regime’s terrorist arm the IRGC-QF, and HAMAS’s military wing, the Al-Qassam Brigades, in Gaza.
This action highlights how HAMAS’s destructive and destabilizing rule over Gaza has not just fueled an economic crisis, it has undermined efforts to provide services and improve infrastructure for the people of Gaza.
On September 4th, we also sanctioned another international network of close to 40 individuals, entities, and vessels engaged in illicit oil smuggling and other forms of sanctions evasion on behalf of the same corrupt Iranian regime that is trying to hold international trade routes hostage by attempting to interfere with the flow of commerce through the Strait of Hormuz. Sitting on top of this network is Qods Force Commander Qasem Soleimani and Qods Force official and former Minister of Petroleum Rostam Qasemi.
In Spring 2019, this IRGC-Qods Force–run network sold hundreds of millions of dollars’ worth of Iranian oil predominantly to Syria. Let me be clear: anyone who helps the IRGC and its Qods Force gain access to funds it uses to engage in its destructive behavior risks being sanctioned themselves. And we will continue to work with banks and governments around the world to cut them off from the international financial system.
The Evolution of Counterterrorism Authorities
As our capabilities for combating terror have improved, our terrorist adversaries have likewise changed tactics for financing and facilitating their attacks.
Yesterday, leading up to the 18-year anniversary of 9/11, President Trump signed another very important Executive Order. This Order enhances our primary counterterrorism and sanctions authority. This strategic enhancement will help us to better adapt to the evolving threats as part of our unrelenting approach to combating terrorist financing.
First, we expanded secondary sanctions to cover all terrorists designated under our sanctions program. This will allow us to target foreign financial institutions who knowingly facilitate significant financial transactions for terrorists. Foreign financial institutions should be on notice that the U.S. Government will fully utilize this new authority if they are found to be, in any way, facilitating the malign activities of U.S. designated terrorist groups, their members, and their supporters. And when I say foreign financial institutions, that doesn’t just include banks, it also includes money services businesses, cryptocurrency exchangers and administrators, and a litany of others.
Second, the Executive Order improved the U.S. Government’s ability to swiftly and efficiently target leaders and officials of terrorist groups.
Third, we established an extremely important provision that empowers us to target not just those who are performing drills in terror training camps, but also those participating in training provided by terrorists over the internet and other telecommunications platforms.
As part of this roll-out, Treasury and the State Department also announced the designation of 28 individuals and entities, representing leaders, operatives, and financiers, from 11 terrorist groups world-wide.
Digital Currencies: The Next Front in the Counterterrorism Fight?
Finally, before I conclude, I would like to address the issue of crypto or digital currencies. Terrorist organizations and their supporters and sympathizers are constantly looking for new ways to raise and transfer funds without detection or tracking by law enforcement. While most terrorist groups still primarily rely on the traditional financial system and cash to transfer funds, without the appropriate strong safeguards cryptocurrencies could become the next frontier.
Earlier this year, in February 2019, we saw HAMAS solicit bitcoin donations via social media, using two bitcoin addresses. As of late March 2019, those two known addresses had received at least $5,000 worth of bitcoin. While this may not seem like a lot of money, a FinCEN analysis found remittances linked to terrorism averaged less than $600 per transaction. As we know, the cost of carrying out a terrorist attack can be very low. But the human costs to victims is always extraordinarily high.
The digital asset industry has spent a tremendous amount of energy and expertise in developing new systems to transmit value. That industry now needs to harness that technological expertise and apply it to the tough problems we need to solve in illicit finance – both because not doing so threatens national security, and because it is the only way for them to pass regulatory muster. Absent appropriate safeguards to keep our nations and our communities safe from terrorists, rogue regimes, and others who threaten us, the U.S. will work with governments around the world to make sure that non-compliant networks and fintechs do not survive.
Eighteen years ago, on that clear blue morning, we woke up in a very different world from that in which we now live. In the years following 9/11, many cities were targets of similar acts of terrorism, from Madrid and London to Amman, Bali, and Mumbai. Since that time, we have disrupted the ability of terrorists to get access to the financing they need to implement their vicious plans. Not a single country can take this responsibility on alone. We need venues like this conference and multinational coalitions to effectively stop terrorists and those who finance them.
We must leverage our collective talent, expertise, and passion to send a very loud message – heard in the darkest of locations around the globe – that no matter where they try to hide or how they try to obscure themselves, we will find them, we will disrupt them, and we will not allow them to threaten our countries and our people.
We must also be wide-eyed about the threats around us and the falsehoods that our adversaries continually attempt to proliferate. In the IRGC or Hizballah or HAMAS funding schemes that I discussed earlier, we have exposed numerous shell games comprised of things like false documents, front companies, or a host of other deceptions used to fund terror.
We must similarly remember that countries like Iran have historically made numerous false promises – whether it’s a promise that oil shipments are not going to fund terrorist organizations, a promise that the regime will finally reform their anti-money laundering system, or the false narrative that there is a distinction between Hizballah’s political and military wings. Sharing the same common understanding or picture, based on facts and intelligence, is one of the most important components of a successful multinational campaign to root out terrorism. And we must challenge ourselves to each start with that common operating picture, and to not allow political differences to get in the way of the facts.
On 9/11, we witnessed both unfathomable horror and unbelievable courage. From Todd Beamer and his fellow passengers aboard United Flight 93 to the first responders who lost their lives rushing up the stairs of the twin towers or who dug through the rubble desperate to find breathing human beings.
Today, we continue to see that kind of bravery around the world, from our soldiers who are in the battlefields fighting for our freedom, to the White Helmets in Syria who risk their own lives to pull victims out from the rubble of Assad’s destruction, to the first responders and local law enforcement in our neighborhoods who all too often are called upon to run to the scene of lone wolf shooters or suicide bombers who attack our synagogues, churches, mosques, our schools, and our neighborhoods.
I know that in this room there are many who have similarly engaged in great acts of sacrifice and courage. I thank you for your service, for your commitment to this mission, and for dedicating your lives to this unparalleled undertaking. Together, we will confront those who seek to do us great harm and we will win.
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