U.S. Representative Ed Royce (R-Calif.), Chairman of the House Foreign Affairs Committee, questioned witnesses on preventing money laundering from financing global terrorism at a Task Force to Investigate Terrorism Financing hearing entitled “Trading with the Enemy: Trade-Based Money Laundering is the Growth Industry in Terror Finance."
“I guess the real surprise here is just how much money we’re talking about in terms of revenues to these governments in the Western hemisphere, across the developing world. You are talking about hundreds and hundreds of billions of dollars, in terms of helping us balance our books and helping those governments as well. So I think civil society, if it was really focused on just how much money you're talking about here, would bolt upright in terms of trying to figure out a structure in order to try to capture the revenue flows back to the government's related to this.
"So the World Customs Organization, is there -- is that the entity that we should consider the platform for enforcement if we were to work internationally or is it the OECD? Is it is their Financial Action Task force that has that 40 plus IX recommendations, is there a way to maybe incorporate this into that entity with the understanding there of how much were talking about in terms of potential revenue? Therefore that certainly could compensate for taking on that added burden on the part of that institution. Where would you begin and first what would be the practical problems with establishing such a platform? And second what would be the political problems maybe in doing it?" asked Chairman Royce.
“The answer to your question is all of the above. GFI and other NGOs are engaged in this. The OECD is focused on that. There are U.N. conventions against transnational organized crime, against terrorism finance, and against corruption, that have relevant provisions that all countries on the planet are bound by. So you have the handles to do all this. What you can do then with the incentive for revenue raising and better governance, and therefore development, foreign investment, and all the good stuff that comes after this, you provide the incentives for integrity. You bring all of the actors together. They contribute their brains and the data. You do the analysis, you feed it back, you turn the lights off. That's why I was saying that the answer is within reach,” answered Dr. Nikos Passas, Professor of Criminology and Criminal Justice at Northeastern University.
“Since 9/11, either myself or the people that work for me and the group that I managed, visited 40 countries on behalf of the Commissioner who was in charge of customs at the time. And we were trying to extend our borders out with the container security initiative of the countries that we visited. And some of these were former Soviet countries. Every single person we demonstrated the program to, ‘where do we get a copy of this?’ And I had permission to give this to the law enforcement people, OK? And we often made it available. They got the program. We own the program, so we were able to give it to them. We had countries that don't give us anything. The Netherlands wanted to hand us a disc and actually did hand us a disc and said, ‘here's our data’. We couldn't go back to our organization. The programmers wanted the Netherlands to pay for the processing of their data.
"When we had funding, we were able to take this data and do it. The United States has a different bookkeeping system than everywhere else in the customs world. It's a blanket statement. Most other countries use a system called ASYCUDA. We don't use that. Their data is in one format, we don't accept it according to our IT people unless they present it in our format. It costs a lot of money to do this. We could just as easily have it done ourselves. And we did while we were funded. Now, when you go out to somebody, they want money to convert the data. These people just want to give it to us, as long as we share with them. And I would be willing to bet, we could extend this thing to 40 countries, probably within very short order if we had money to do it,” said Mr. Louis Bock, former Senior Special Agent, U.S. Customs and Border Protection.
“In the international community, the Financial Action Task Force makes things happen regarding anti-money laundering and counterterrorism finance. One of the recommendations I have in the book and in my prepared statement is I believe we should go to our U.S. Department of Treasury, who heads up our U.S. Government Financial Action Task Force delegation, and ask them to study the possibility of having trade based money laundering be the next FATF recommendation,” concluded Mr. John Cassara, former U.S. Intelligence Officer and Treasury Special Agent.
Watch Chairman Royce's questioning of the witnesses here or by clicking below:
