Under Secretary for Terrorism and Financial Intelligence Adam
Szubin was at John Hopkin’s School of Advanced International Studies (SAIS) last
week to discuss
the status of the U.S. Treasury fight against terrorism finance. In his
remarks, Szubin defined the central role of money in terrorism operations, described
the tools the Treasury uses to combat terrorism finance, and demonstrated
Treasury advances and challenges in the department’s efforts to counter ISIS
and Hezbollah’s access to money. While international allies have often worked
alongside the U.S. Treasury in combating terrorism finance, Szubin concluded by
highlighting the need for further international action and cooperation in
stifling terrorists’ access to finances.
While conceding that “turning off the spigot” of money flow to
terrorist groups is not a realistic goal, Under Secretary Szubin discussed
Treasury’s “defensive” and “offensive” tools used to constrain a group’s
ability to recruit members, pay salaries and bribes, and buy arms. These tools
include a defensive push to expand transparency in the international financial
system through FATF in order to increase the likelihood of detecting terrorists
and facilitators using the financial system. On the offensive side, the U.S.
Treasury draws on targeted sanctions, the authority to require all U.S.
financial institutions to act against those identified as foreign money
laundering sources, and close coordination with law enforcement and, in the
case of ISIS, the U.S. military.
Treasury’s top counterrorism target is undoubtedly ISIS. Since the
terrorist group earns a significant portion of its revenue from returns on oil
sales and tax payments, both of which are internally derived, the Treasury’s
mission has been boosted by the Coalition’s recent progress, particularly by
targeting the group’s oil and gas supply chain. Aside from the Coalition’s
campaign, Treasury has worked alongside the Government of Iraq to reduce
liquidity in ISIS territories and thus decrease the amount of taxable money
available, cut off banks’ access to the international financial system in ISIS
territories, and suspend the payment of government salaries into ISIS-held
areas. Szubin pointed to the terrorist group’s move to cut fighter salaries by
50 percent, suspend the “death benefit” payments to the families of ISIS
fighters who died in combat, and its increased difficulty in attracting
recruits as indications of a financially weakened ISIS.
In restricting Hezbollah’s global access to money, Under Secretary
Szubin emphasized Treasury’s partnership with Gulf allies. The U.S. and Saudi
Arabia have issued joint designations targeting Hezbollah operatives and
financial supporters (the U.S. has designated more than 100 Hezbollah-related
individuals) and the GCC has mobilized to designate Hezbollah as a terrorist
organization. Also, the recently established “Hizballah
International Financing Prevention Act of 2015 (HIFPA)” adds additional
sanction authorities to target foreign financial supporters of Hezbollah.