March 29, 2007 -- Suing those who fund terrorism could help win the war on terror, said law professor John Norton Moore at a Law School talk March 26. Restricting terrorists’ access to financial resources will help counteract organizations like al-Qaida and the Taliban, added International Monetary Fund officials Jody Myers, senior counsel of the IMF’s legal department, and Jean-François Thony, assistant general counsel, who explained the international legal frameworks in place to combat money laundering and the funding of terrorists and the challenges countries have enforcing them. The event was sponsored by the J.B. Moore Society of International Law.
Money is the primary motive for criminal organizations such as drug rings. But terrorist organizations have a different use for money, Thony explained, “For them money is just a means to achieve an objective, which is an ideological one, or a political one, or a religious one. But money is just a means, not the purpose or the raison d'être of their existence.” He estimated that at least 50 percent of the revenues of terrorist organizations come from crime.
Criminal and terrorist organizations must launder the large amounts of cash netted in criminal activities in order to sever ties to the profits and the crime. “People don’t pay for their drugs with credit cards,” Thony said. No matter how the money is laundered, the criminals leave a money trail, and this is where they become most vulnerable, he added. It is difficult to hide large amounts of cash, so these organizations must take it to a bank. From there, they can transfer it abroad or make investments.
In the last 20 years, much has happened in the field of money laundering and financing of terrorism prevention, Myers explained. Since the late 1980s there have been a range of U.N. conventions and international resolutions introduced, as well as regional conventions, to address the problem. After 9/11 such conventions were significantly expanded, he added.
Current international legal frameworks were designed to harmonize the laws and policies of participating countries, provide mechanisms to prosecute and confiscate the proceeds of terrorist and criminal organizations, ensure financial-institution transparency, and enable countries to cooperate with one another internationally, Myers said. “Really since September 11 this area of money laundering and countering of financing of terrorism is clearly on the map as a security issue.”
“One of the main challenges states are facing is putting in place the recommendations,” Thony added. Countries define money laundering, terrorism, and corruption differently, which makes international cooperation difficult. Another barrier to cooperation is the double incrimination principle, which allows a state to refuse to give judicial assistance if it concerns an act that it does not consider to be a criminal offence. Corruption also impedes cooperation because varying levels are permitted in different cultures, Thony explained.
Moore, director of the Center for National Security Law, suggested civil litigation against private individuals that support terrorist organizations will help tremendously in the war on terror. Seizure of money and assets can have enormous leverage when dealing with terrorist groups, he said.
Following the Munich massacre in the 1970s, Moore helped devise the U.S. response. “I’ve been worrying about terrorism ever since,” he said. “I was persuaded then and I’m persuaded now that one of the most effective sets of tools we have—we are just beginning to use effectively, is to follow the money and to intercept the money.”
Prior to the Foreign Sovereignty Immunities Act, which Moore helped draft in the 1970s, individuals could not sue other countries. “[The act] actually gave you a series of specific settings in which you could sue foreign governments and actually went beyond commercial activities and included tort activities, certain torts in the United States, certain seizures of property illegally, and a variety of other activities,” he said.
In 1996, amendments to the act provided opportunities to sue individuals listed as terrorists by the U.S. Department of State for very specific crimes like high-jacking or torture. Cases can be heard in U.S. federal courts if the accused refuses international arbitration, Moore explained. “I would like to suggest to you that a series of billion-dollar judgments against Iran and against the top leadership of Iran and other countries around the world that can pursue their assets everywhere in the world would have enormous deterrent implications for them.”
The Southern Poverty Law Center brought the Ku Klux Klan to its knees after systematic litigation bankrupted the organization; North Korea was willing to negotiate after $25 million in assets were seized.
“I would suggest this is an area that is long overdue for a much more open debate.”
• Reported by Emily Williams