Anti-Terrorist Finance in the United Kingdom and United States

Abstract:     
This article adopts a two-tiered approach: it provides a detailed, historical account of anti-terrorist finance initiatives in the United Kingdom and United States — two states driving global norms in this area. It then proceeds to a critique of these laws. The analysis assumes — and accepts — the goals of the two states in adopting these provisions. It questions how well the measures achieve their aim. Specifically, it highlights how the transfer of money laundering tools undermines the effectiveness of the states' counterterrorist efforts — flooding the systems with suspicious activity reports, driving money out of the regulated sector, and using inappropriate metrics to gauge success. This article recognizes that both states consider the fight against terrorism to be partly military but also a matter of bringing certain democratic principles to bear. Critics have been quick to condemn some of the measures for their encroachments into civil liberties. My goal is not to measure the success of the laws according to any particular ideology but rather, accepting the governments' democracy-promoting goals, and the role these play in generating domestic and international support, to clarify which components do not appear to serve the states' aims.

This article won Stanford Law School's Carl Mason Franklin Prize for 2005-2006, for most distinguished written work in international law.

Number of Pages in PDF File: 134

Keywords: National Security, Terrorist Financing, Counterterrorist Laws, Terrorism, Civil Liberties

JEL Classification: H56, K00, K2. K4

Accepted Paper Series