46 Pages Posted: 13 May 2007 Last revised: 6 Feb 2013
Date Written: June 29, 2010
Efforts to stop the spread of international terrorism continue to be lead stories on all major news outlets. However, an important, and often overlooked, aspect of counterterrorism is the unscrupulous use of both domestic and international financial markets. This powerful and dangerous weapon of terrorism is addressed through our article by specifically discussing how both the government and the citizens ought to address the eradication of such unscrupulous use.
In order to effectuate this discussion, we first examine the laws on the books before the 9/11 attacks to determine whether approaching terrorism financing in the same way as traditional money laundering was proper. Then, after determining such a venture to not be adequate, we examine the nature of terrorism financing to determine what efforts need to be taken to make terrorism financing legislation adequate and effective.
Lastly, the article undertakes the task necessary in any counterterrorism discussion, the act of balancing competing interests. Here, the government has an interest in protecting the citizenry. Competing against that interest is the interest of individuals' freedoms. The specific competing interest here is the right to freely exercise religion. Weighing back, then, to the government is the unscrupulous use of financial networks under a false pretense of religious exercise.
Throughout this morass of interests, the concluding recommendations highlight that the answers are neither purely governmental nor individual. Rather, the government and the people must each take up their own responsibilities to effectuate an end to the abuse of financial markets in the name of terrorism financing.
Keywords: Money Laundering, Terrorism Financing, Hawalas, War on Terrorism, Money Service Businesses, PATRIOT Act, Freedom of Religion, Free Exercise of Religion, Zakat; Informal Value Transfer Systems, Counterterrorism, Counter-terrorism, 9/11, FATF; OFAC; FinCen, Bank Secrecy Act, Israel, Iraq
JEL Classification: K14, K33, K42
Suggested Citation: Suggested Citation
Field, Brian J. and Guiora, Amos N., Using and Abusing the Financial Markets: Money Laundering as the Achilles' Heel of Terrorism (June 29, 2010). University of Pennsylvania Journal of International Economic Law, Vol. 29, No. 1, p. 59, Fall 2007; Case Legal Studies Research Paper No. 07-17. Available at SSRN: https://ssrn.com/abstract=985947
By Vito Tanzi
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