ABSTRACT
Financial manipulation and money laundering, which are inextricably linked to terrorist financing have long been stigmatized and targeted by many nations, as well as by intergovernmental organizations. The United Nations (UN), particularly, possess a comprehensive range of international initiatives and the largest network for the development of international cooperation on criminal matters, including financial crime, which encompasses terrorist financing. One of the earliest references by the UN to terrorist financing was embodied in the Declaration on Measures to Eliminate International Terrorism adopted by the General Assembly (Resolution 49/60) on 9 December 1994. The resolution urged the member-states to “refrain from organizing, instigating, facilitating, financing, encouraging or tolerating terrorist activities.”2 In 1995, the United States began to use sanctions aimed at freezing of assets and prohibition of transfer of goods and services against individuals and organizations named on the list of specially designated terrorists (SDT) determined to have committed or supported with material and financial resources acts of violence to disrupt the Middle East peace process.3 The 1996 US Anti-terrorism and Effective Death Penalty Act authorized the Secretary of State to designate foreign terrorist organizations (FTOs) to prohibit these entities from conducting financial transactions in the United States, in addition to freezing of their assets.4 In December 1996, the UN General Assembly adopted Measures to Eliminate International Terrorism (Resolution 51/210), which also urged the international community to take steps to prevent and counteract the financing of terrorism and the movements of funds suspected to be intended for terrorist purposes, including exchange of information concerning international movements of such funds, without impeding in any way the freedom of legitimate capital movements.5 Even earlier a number of intergovern-
These include the Offshore Group of Banking Supervisors (OGBS) set up in 1980, the Financial Action Task Force (FATF) established by the July 1989 Group of Seven (G-7) summit, and the Egmont Group of financial intelligence units (FIU) established in 1995. Since its inception, FATF has been addressing financial crime. In 1990, FATF issued “Forty Recommendations” in an attempt to institute a global framework for anti-money laundering activities. These recommendations set out “principles for action,” involving the criminal justice system, financial system, law enforcement and international cooperation. Over the years, the initiatives of these institutions led to a gradual accumulation of global standards and best practices and demonstrated how international cooperation is vital in targeting financial crime, including money laundering and terrorist financing.6 As a result, a number of countries had made the financing of terrorism a predicate offense in their respective anti-money laundering regimes and taken action to designate terrorist entities and seize their assets.7
