As published in Politis Newspaper (p.29)...
(English Text)

Put Terrorists Out of Business: Cut off the Blood Money

An Op-Ed by Ambassador Klosson

Sunday, January 19, 2003

Consider this: in 2001 alone, there were almost 350 terrorist attacks worldwide, resulting in almost 3,600 deaths. No region was spared. Terrorists attacked over 530 facilities, including private businesses, houses of worship, government offices, public gathering places, diplomatic installations, and military bases. Sixty-four known terrorist organizations remain active around the globe. Several nations actively sponsor terror.

The recent attacks at a Bali resort, against a French tanker in the Gulf, against US forces in Kuwait, and against missionary hospital personnel in Yemen leave no doubt that terrorism remains a threat to all who cherish freedom. The threat is real and it is transnational. It is diffuse. It is insidious. None of us can combat it alone. We must cooperate.

Cyprus has been a valuable partner in the international effort to combat terrorism. Given its geographic position, regional links and role as a regional financial hub, it is essential that Cyprus keep its guard high to deny terrorists any inroads. We have enjoyed strong support from the Government on a multitude of levels: improved security measures at ports and airports, tighter Customs controls, and prompt cooperation in notifying its financial industry of entities designated as terrorists by the U.S., European Union or United Nations. We appreciate this level of commitment, just as we look to strengthen further enforcement and cooperation as we work together to put terrorists out of business.

One of our most effective means to disrupt terrorist organizations is to shut down their financial support networks. Closing these global networks deprives terrorists of their oxygen supply, their lifeblood -- their finances. Since terrorists rely upon global financial networks to bankroll their attacks, the international community must have a global strategy for denying terrorists access to the financial means to commit atrocities. We must work together with a sense of urgency, and be prepared to see it through for the long-term.

Global terrorist networks are diverse and raise money through various means: common criminal activity; front companies; donor contributions; abuse of charities and non-profit organizations. In addition to using the formal banking system, terrorists move money through check-cashing houses, money remittance companies, front businesses, doctored customs invoices, and exploitation of charities. Their tools range from webs of wire transfers and shell companies, to informal transfer systems and currency smuggling.

What may on the surface appear as a legitimate commercial transaction or charitable donation could, in fact, be used to advance a terrorist group's deadly plots. So, what should be done?

The UN Security Council has adopted several resolutions that obligate governments to combat terrorist financing. We strongly support these and other international efforts to suppress terrorist financing by promoting accountability and transparency in financial transactions. In Cyprus, the proactive measures the Attorney General and the Central Bank have taken are helping stem the financing of terrorism. The U.S. highly values this cooperation and looks forward to ever-deepening cooperation between our governments.

The U.S. is also working to establish counter-terrorist financing regimes based on international norms developed by the Financial Action Task Force (FATF), the recognized international standard-setting body for money laundering and terrorist financing issues. It recently published an International Best Practices paper for non-profit organizations that sets forth the important elements of a regulatory regime as well as best practices that non-profit organizations should apply. The FATF has also made eight Special Recommendations on combating terrorist financing. Cyprus was in the first wave of countries to adopt all eight Recommendations.

Proactive international measures are thus required to stem the flow of funds to terrorist groups. These measures include freezing terrorist-related assets in accordance with UN Security Council Resolutions, promoting a strong network of laws and regulations, investigations, enforcement, prosecutions, information sharing among financial intelligence units, and effective supervision of financial institutions.

The challenge also requires greater vigilance by individuals and companies. The United States Government recently launched a new campaign to help combat terrorism. This campaign, part of the Rewards for Justice Program, provides up to $5 million for information leading to the dismantling of any system used to finance a terrorist organization. Additional Rewards for Justice campaigns target information leading to the arrest or conviction of those who planned or aided in any act of terrorism against U.S. persons or property. If you have such information, please contact the Regional Security Officer at the Embassy (22-776-400).

You may be asking yourself why is it important for Cypriots to work to eliminate the global networks that finance terrorism. The reasons are many. First, tourism is the lifeblood of Cyprus. Attacks like those in Bali and Kenya don't just hurt tourism in those countries; they depress tourism worldwide, as people choose domestic over international destinations. Cutting off the financing of terrorist attacks on tourists thus strengthens the global tourism market, including in Cyprus. Businesses, moreover, have a strong interest in the success of this campaign, even if protective measures impose higher costs. No bank wants its international credibility undermined by the discovery of assets on its books used to finance terror. No port wants to face the catastrophic disruption to trade that would result if a container with weapons of mass destruction slipped through its controls. Airline security and immigration controls may be inconvenient for tourists, but, as we've seen, a terrorist incident that destroys confidence entails far greater costs to a country's tourism industry. Working together, we will strike the proper balance between effective prevention of terrorism and our commercial and economic interests.

It is true that the international community has accomplished much since September 11, 2001. However, much more remains to be done. We all must work harder to cut off the flow of terrorist financing worldwide, to disrupt terrorist operations and to stop terrorists from crossing borders to carry out their plans. Any nation that ignores the threat of international terrorism does so at its peril.