The Bush Administration today announced that it will propose a 12.7% increase in the budget of the Financial Crimes Enforcement Network (FinCEN) to further strengthen our hand in the financial war on terror and other efforts against financial crime.
FinCEN, a bureau of the United States Treasury, plays a key role in the administration’s broad effort to stop financial crimes and the flow of money to terrorist organizations. FinCEN works with the financial community to support local, state, and federal law enforcement and intelligence agencies to help prevent the abuse of our financial system by criminals and terrorists.
" FinCEN is on the front lines every day, tracking down those who attempt to use the U.S. and global financial system to plot, fund, and perpetrate acts of terrorism around the world. By proposing to substantially increase FinCEN’s resources, President Bush has reaffirmed the administration’s commitment to aggressively fight terrorism on every front," said Secretary of the Treasury John W. Snow.
Under President Bush’s proposal, FinCEN will be able to continue acquiring and upgrading the technology and resources vital to its support of the nation’s fight against terrorism and financial crimes.
"The men and women of FinCEN appreciate the administration's recognition of the key role we play in its efforts to stop financial crime and terrorist financing. The President's FY 2005 budget request will enable FinCEN to effectively enhance its ability to provide law enforcement and intelligence agencies with the types of strategic, financial information and analysis they need to investigate and bring criminals and terrorists to justice," said William J. Fox, Director of the Financial Crimes Enforcement Network.
The new resources that President Bush has proposed in his budget will be focused on three areas:
- Expand the capacity of FinCEN’s Gateway program by at least 100%, increasing its user capacity from the current 1100 users to more than 2000 users. This program makes it possible for local, state and federal law enforcement officials to directly access information related to suspected money laundering activities. In addition the new resources will allow FinCEN to design and implement “BSA Direct” a new, state-of-the-art data retrieval system with advanced analytical tools and data mining capabilities. BSA Direct, which is currently under development, will provide a web-based, user-friendly tool to financial investigators.
- Increase by 25% the number of personnel dedicated to outreach to and regulatory support of industries that are covered by federal anti-money laundering programs for the first time. These efforts are an essential part of FinCEN’s mission, which is, in part, to assist the financial services community in meeting its obligations to comply with regulations designed to help protect their institutions from being used as a conduit for the illegal proceeds of crime and terrorist financing.
- Increase the number of analysts to further strengthen FinCEN’s ability to provide strategic and tactical analytical products to law enforcement and the financial community which are essential in the effort to prevent money laundering and terrorist financing. These products range from trend and pattern information to investigative case support.
President Bush’s budget request for FinCEN is only part of the administration’s broader war on terrorist financing and other financial crimes. The President’s budget also seeks a 3.6% increase for Treasury’s Office of Foreign Assets Control (OFAC), which is responsible for identifying and blocking the assets of terrorists and terrorist sponsors.
Stopping and tracing tainted money flows depends upon transparent and accountable financial systems. Working together with other elements of the US government and the international community, the US Treasury Department has led the development of increased transparency and accountability in formal and informal financial systems around the world, making it more difficult and costly for terrorists and other criminals to raise, move and use funds in support of their operations. While the deterrent, preventive and investigative value of these efforts cannot be captured by statistics, the following developments indicate substantial progress in prosecuting the financial war on terror:
Since September 11, 2001:
- 1447 accounts, containing more than $139.1 million in assets, frozen worldwide - including $36.7 million in the U.S.
- $64 million in additional terrorist related assets seized by authorities globally.
- 345 individuals and organizations listed as Specially Designated Global Terrorists (SDGTs) under Executive Order 13224.
- Countless millions in additional funds prevented from flowing to terrorists by disruption of terrorist financing networks, deterrence of donors, and international efforts to secure the world financial system from the financing of terror.
Several major sources of terrorist financing dismantled:
- In December, the U.S. and Saudi Arabian governments took joint action against a previously designated entity that was trying to reestablish itself under a new identity.
- In August, 2003, Sec. Snow announced the U.S. designation of several charities funding Hamas and several members of Hamas’ senior leadership. In the weeks since, the European Union has now designated the political wing of Hamas.
- In support of previous action by European partners, the U.S. designated the Al-Aqsa International Foundation, a major source of funding to Hamas in April of 2003, helping to shut-down the German based charity.
- Fifty countries joined the U.S. to designate al-Qaida’s primary partner in Southeast Asia, Jemaah Islamiyah, at the UN in 2002. In early 2003, two of the organization’s leaders were subsequently designated at the UN, and Secretary Snow announced the designation of 20 more key members of JI at the APEC Ministerial Finance meeting in Thailand in September 2003.
- The Somali based al-Barakaat network once provided funding and transferred money to and from al-Qaida. The U.S. and our international partners took action to designate al-Barakaat and close down their operations in November of 2001.
- Three major U.S. based charities providing financing to terrorists, the Global Relief Foundation, Benevolence International Foundation and Holy Land Foundation for Relief and Development were designated and shuttered in December of 2001.
- Over 200 countries and jurisdictions have expressed their support in the financial war on terror.
- 173 countries have issued blocking orders freezing terrorist assets.
- More than 100 countries have passed new laws, strengthening their safeguards against terrorist financing.
- 84 countries have established Financial Intelligence Units to share information on terrorist financing.
- The UN Security Council has approved Resolutions 1373 and 1455 that compel action by member states to combat terrorist financing.
- The Financial Action Task Force (FATF) has issued 8 Special Recommendations on Terrorist Financing and revisions to the 40 Recommendations on Money Laundering, providing international standards to prevent terrorist financing.
FinCEN Accomplishments since September 11, 2001:
- Law Enforcement Support: Since 9-11, FinCEN has supported 12,914 cases involving 82,832 subjects. Of these cases, 2,692, involving 20,240 subjects were related to terrorism.
- 314(a) Information Sharing: FinCEN’s 314(a) program enables federal law enforcement agencies, through FinCEN, to reach out to over 29,000 financial institutions to locate accounts and transactions of persons that may be involved in terrorism or money laundering. Regulations require that law enforcement provide written certification that subjects submitted to FinCEN are reasonably suspected based on credible evidence of engaging in terrorist activity or money laundering.
- The system has processed 200 requests submitted by ten federal agencies from February 18, 2003 to December 31, 2003.
- These federal law enforcement organizations have submitted cases in the conduct of 68 terrorism/terrorist financing cases and 132 money laundering cases.
- There were 1,302 subjects certified by law enforcement and forwarded by FinCEN to financial institutions through the 314(a) system.
The feedback from law enforcement has been overwhelmingly positive and has resulted in the discovery of hundreds of suspect accounts and transactions in addition to the issuance of the following:
- 472 Grand Jury Subpoenas
- 11 Search Warrants
- 21 Administrative Subpoenas/Summons
- 3 Indictments
- FIU Support: FinCEN also supports U.S. law enforcement through the 84 Financial Intelligence Units (FIUs) throughout the world. Since 911, FinCEN has referred 598 requests on behalf of US law enforcement of which 346 related to terrorism.
- Hotline: FinCEN’s financial institutions hotline, an initiative created by FinCEN immediately following the events of September 11th, allows the financial community to immediately alert law enforcement on suspected terrorist financing or money laundering activities. To date, there have been 789 Hotline Tips that have been referred to law enforcement.
- Regulatory Efforts: 22 final, proposed and/or advance notices of proposed rulemaking were issued under the Patriot Act to strengthen anti-money laundering and terrorist financing efforts.
FinCEN submitted its Report to Congress on Informal Value Transfer Systems (IVTS) as mandated by Section 359 of the USA PATRIOT Act.