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Britain and Ireland terrorism.

THE UNITED Kingdom and Irish Republic governments had anti-terror finance frameworks long before this issue climbed global agendas in the wake of the September 11 attacks in the USA. The fight against terrorism in Northern Ireland over the past 40 years saw to that.

Such structures did not make either country immune, however, to the realisation that efforts needed to be stepped up in the post 9/11 world of global terror threats.

The UK's response has involved legislation to increase the powers of anti-money laundering authorities and the formation of a more powerful co-ordinated body to spearhead the effort.

In Ireland, the response to 9/11 has been more in the vein of improving the breadth and scope of existing structures.

"We have a unique situation in this country in relation to our border with Northern Ireland," said John O'Mahoney, chief superintendent of the republic's Criminal Assets Bureau.

"We are now very much in a peace process, in the past we have had to be extremely vigilant about smuggling activities along the border by disaffected terrorists on our territory who have links to Republican groups and we have had our Criminal Assets Act, empowering us to investigate and seize funds that we have suspected of part-financing terrorism, for 11 years.

"Other jurisdictions introduced new anti-terror finance structures and systems after 9/11 but we have been operating under this Act for a long time."

In the UK, the anti-terror finance regime is shaped by The Terrorism Act of 2000. This extended previous counter-terrorism legislation by giving the British government the power to proscribe terrorist organisations, criminalising fundraising and other kinds of financial support for terrorism and giving the courts power to order forfeiture of money or property deemed to relate to terrorism.

The Anti-Terrorism, Crime and Security Act, approved a year later, was aimed at cutting off terrorist funding and ensuring government departments and agencies could collect and share information required for countering terrorist threats. It enables assets to be frozen at the start of an investigation, rather than when suspects are about to be charged, reducing the risk that the funds will be transferred.

It also allows the UK government Treasury (finance ministry) to freeze the assets of overseas governments or residents who have taken--or are considered likely to take action--to the detriment of the UK economy or constituting a threat to the life or property or a UK national or resident.

Suspicious activity reports (SARs), now the main tool of anti-terror finance efforts, were empowered under the 2000 Act and modified in the Proceeds of Crime Act of 2002, which created a single set of money laundering offences applicable throughout the UK to the proceeds of all crimes.

Not only traditional financial institutions but also bureaux de change, cheque cashiers, money transmitters, casinos, estate agents, lawyers, accountants, auditors and company and trust formation agents became subject to regulations that requiring any suspicious transactions to be reported.

Operationally, the major change happened in April 2006, when the Serious Organised Crime Agency (SOCA) was set up to pull together the nation's anti-money laundering activities. SOCA, formed from the National Crime Squad, the National Criminal Investigation Service and parts of Customs and Excise and the Immigration Service, has no investigative remit.

Funded by an annual budget of GB Pounds 416 million, its role is to extract information from SARs sent in by banks, property and travel agents and other vendors such as art and motor dealers, which it feeds into the National Terrorist Finance Investigation Unit of the Metropolitan Police.

A spokesman described the role of the organisation, a non-departmental public body funded by the Home Office, as part facilitator, part evangelist.

"We distribute about 215,000 suspicious activity reports a year," he said. "Our terrorist financing team also engage in an outreach programme to raise awareness of terrorist financing control in the private sector.

"We go in to see companies and specialist units to advise reporting officers. The specific information we talk to them out is something that we need to keep out of the public domain so we cannot go into more detail because it can highlight to people what area we may be targeting or a new technique that we are using."

Last year, in its 'UK Threat Assessment of Serious Organised Crime', SOCA spoke of targeting "gatekeepers" for money laundering and terrorist finance, such as solicitors and accountants and being vigilant about activity to corrupt or coerce bank employees.

It also referred to "extensive use of money transmission agents" to launder money. Legitimate and quasi-legitimate businesses, traditionally those with a high cash turnover, are similarly under the microscope.

The UK government's three organising principles of its anti-terror finance efforts--"effectiveness, proportionality and engagement with all government and private stakeholders"--were set out in the 2004 Anti-Money Laundering Strategy, which covers efforts to fight terrorism finance.

More recently, The Financial Challenge to Crime and Terrorism, a report issued in February this year by the Treasury, SOCA, the Foreign & Commonwealth Offices and the Home Office, revealed that nearly 200 bank accounts linked to terrorist suspects were frozen in 2005-06 and there has been a four-fold increase in prosecutions for overall money laundering since 2002.

It says there have been 33 seizures under the Anti-Terrorism Crime and Security Act netting

approximately GBPounds 444,000 with a further GBPounds 650,000 seized under the Terrorism Act.

In Scotland, GBPounds 72,252 has been sized in two operations since 2003. Altogether in the UK, 443 individuals had their assets frozen under anti-terror finance laws.

More measures to increase anti-terror finance powers of government agencies are planned, however, and which were also flagged up in the SOCA report.

The British government is proposing to make financial tools a mainstream part of the UK's approach to tackling crime and terrorism by introducing new powers to increase their impact and ensuring that Companies House data is fully utilised by law enforcement agencies.

It also wants reinforced measures to tackle the abuse of money service businesses, including replacing the current registration system with a licensing system.

In addition, it has proposed giving the country's Charity Commission regulator an additional GB Pounds 1 million to help it identify and disrupt terrorist exploitation of charities, setting up a new in-house money laundering supervisors' forum.

And the UK government is also considering the case for increasing the penalties for the financing of terrorism up to life imprisonment and expanding the scope of asset forfeiture powers to cover all terrorist offences, not just terrorist finance ones.

Ultimately, disrupting the financing of terrorism may also mean giving the Government more powers to seize suspected terrorist cash and property.

There are also good arguments," says the report, "for introducing a more practical definition of 'cash' to the asset seizure definitions."

In contrast, Chief Supt O' Mahoney at the Irish Republic's Criminal Assets Bureau does not see the need for more powers in the fight against terror finance. The bureau was formed in 1996 in response to two prominent murders, one terrorist-related and one related to organised crime. It operates under the Criminal Assets Act and Proceeds of Crime Act, both passed in 1996, and works closely with the Assets Recovery Agency in Belfast, HM (British) Customs and Ireland's own customs and revenue service (the Office of the Revenue Commissioners), as well as the police and social welfare organisations.

The biggest recent change, says Chief Supt O'Mahoney has resulted from an amendment to the Proceeds of Crime Act, allowing the bureau to pursue funds for terrorism in Ireland that are located outside the country.

This covers all jurisdictions, he says, as long as criminality can be proved within those jurisdictions, where offences correspondents with definitions in Irish law.

In addition, the bureau works with the Camden Assets Recovery Inter-Agency Network (CARIN), an informal The Hague-based network of other asset recovery agencies, to identify and freeze terrorist-linked funds.

He believes that the increased level of co-operation from other such agencies is one of the main changes in recent years.

"We don't need any more powers," he says. "The Proceeds of Crime Act is very powerful and is working very well. We have all the structures that we need in place. What has happened recently is just a different focus; a more international focus.

"About 10,500 suspicious transaction reports a year are reported to the Garda Siochana [the Irish police] each year--a much increased number from when the bureau was set up 11 years ago--and we are working closely with financial institutions to be able to identify movements of money than are smaller than we would track in the past.

"In the 11 years we have been in existence we have recovered Euro 56 million of assets and Euro 100 million in previously unpaid taxes that we have come across in the course of investigations. We have a team of Revenue officers working directly with their bureau. We know from these figures that our investigations are having an effect."

Despite these claims, some regulatory experts remain sceptical, however. John Bourbon, a former managing director of the Cayman Island Monetary Authority and head of supervision for the Isle of Man Financial Supervision Commission who now chairs the UK-based NGO, the Compliance Institute, believes targeting terror finance is misguided and ultimately futile.

"Terrorism financing involves sums that are quite small, compared with the money being laundered from the drugs trade," he says.

"It's very hard to track it and you run the risk of grinding the financial sector to a halt with all the suspicious activity reports and know your customer administration.

"These are very blunt instruments and if you look holistically at the costs of operating them in international finance, they are huge.

"It's easy enough to track back after the event and follow the money trail but as for actually being proactive in the fight against terrorist financing, I have never been convinced by it."
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Author:Cave, Andrew
Publication:International News Services.com
Geographic Code:4EUUK
Date:Apr 1, 2007
Words:1652
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