How the US Government Fights Terrorist Funding

How the US Government Fights Terrorist Funding

Interview with Jonathan Schanzer

Shari Hillman
SOURCERJC Bulletin
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Q: What was your role in stopping terrorist financing?

A: I worked in the Treasury Department’s Office of Intelligence and Analysis, a small office which tracks terrorist financiers. That office is responsible in part for targeted financial sanctions against businesses, charities, and individuals who are identified as sponsors of terrorism world-wide. It is part of the effort to freeze assets of those people who finance violent groups and or acts of violence and I worked in identifying those individuals and entities. Since 2001, approximately $300 million in assets have been frozen by the Treasury Department.

The US Government already has sanctions in place against certain governments, like Iran, which is different from the targeted sanctions against private organizations and individuals.

The Bush Administration has been out in front on this issue. The first big step President Bush took after 9/11, really, was on 9/23, to freeze the assets of terrorist organizations and individuals. The system for stopping terrorist financing this way has developed over the years.

Q: What obstacles does the US face in stopping terrorist funding?

A: The biggest problem is that the international community isn’t doing enough to support this effort. Terrorists know that it’s easier to operate abroad than in the US. One challenge for the US is working with the UN – the UN is willing to freeze the assets of al-Qaeda or Taliban, but it won’t move against Hezbollah, Hamas or the Palestinian Islamic Jihad, which are waging war against Israel. That undermines what the US and Israel are doing to combat terrorist financing. Now that I’m not working in government and I can write and lecture publicly again, I want to shed light on this issue.

Q: How does the US work with other countries to freeze assets?

A: The Government works through bilateral cooperation with other countries, and works through the UN and international organizations. The UN has the 1267 Committee – when a freeze is approved by the committee, then all the UN members countries must freeze the assets of the targeted entity and confiscate the passports of the people involved. The UN is a central address to cut off funding, whether in dollars or euros or another member currency.

Sometimes there’s more cooperation, sometimes less. The system isn’t perfect but at this point, we’ve been successful enough that just the threat of targeted sanctions has become a deterrent to terrorist financiers.

Q: How exactly are the assets frozen, once a terrorism-supporting entity is identified?

A: When assets are frozen, US banks are notified through the Treasury Department. There is a short window of opportunity to quarantine the assets before they’re moved somewhere else. After that, US banks and financial institutions are closed to those entities.
The money is frozen in escrow and there are opportunities for Americans to sue for that money, if they or a family member have been hurt in a terrorist attack.

To give you a few examples of organizations that have had their assets frozen this way, there was the IARA (Islamic African Relief Association), an al-Qaeda front operating out of Missouri, which we shut down in 2004. More recently Treasury froze the assets of Jihad al-Bina, a Hezbollah construction company that was rebuilding in Lebanon after the war there last summer. Another example is Bank Sepah, part of the Iranian apparatus that was funding the Iranian nuclear program.

There are many ways of attacking these groups.

Q: What other challenges do we face in this effort?

A: Here in the US, we have the legal structure in place to make sure we’re doing the right thing, that we’re not freezing the assets of innocent groups or individuals. But that allows the terrorists, who operate without those legal structures, time to multiply and move faster than we can.

Q: What brought you to the Jewish Policy Center?

A: I was in the think tank world before I went to Treasury and I missed it. I enjoy the public debate, being able to speak and write about issues that matter to me. For two and half years I sat in a small office with no windows, working on highly sensitive material and doing important work, but now I’m ready to get back out there educating the public and working in the private sector.

My goal is to revitalize the JPC and make it an important voice in the policy debate, in several ways.

We are launching a new magazine, inFocus, which will be a quarterly that looks at a policy issue of the day, coming at it from different perspectives. For example, the first issue will be about Iran. We will look at the threat to the US, to Israel, to the oil economy, how to combat Iran’s funding of terrorism, how to thwart its support for terrorism in Lebanon, and so on. Our authors will be experts, scholars, former government officials, and others with expertise and insight into the issues. We want inFocus to be of interest to a wide audience, not just in the Jewish community, but to anyone with an interest in foreign affairs.

The JPC will also launch its first web site soon, which will include information about the JPC and what we do. It will have links to In Focus, things we’ve published, JPC projects, and a blog that will include updates on world affairs of interest to JPC supporters.

We also plan to revive the JPC Forums, engaging top speakers to travel and speak about and bring the discussion of our topics to different communities.

Finally, I will be doing some public speaking and publishing my own articles on a variety of issues, to raise the JPC profile by educating people and getting our perspective out to as wide an audience as possible.

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