Treasury Seeks To Cast A Wider Net For Terrorists
The Treasury Department will soon publish new rules that would pave the way for tracking many electronic money transfers coming in and out of the U.S. As envisioned, the Treasury Department would take all that information, feed it into a giant database, analyze it, and then ferret out patterns associated with terrorism financing. Experts say it isn’t clear it is going to work.
Right now, financial institutions are only required to report transactions that are more than $10,000 in cash — there are about 14 million of those a year. They also regularly file suspicious activity reports with the Treasury when they think something untoward might be happening. Adding every electronic transfer to that pool of information would vastly increase the data the Treasury would be collecting.
The new rules would also allow the Treasury to cast a wider net over an informal remittance system that has been at the center of a number of terrorist plots in this country. It is called hawala and is particularly popular in South Asia and Somalia. It basically uses brokers in the U.S. and overseas who can move money with just a phone call. Someone can simply walk into a hawala shop and ask to have $1,000 sent to, for example, Karachi, Pakistan. For a fee, the broker calls someone in Pakistan who makes the money available for pickup on the other end. It is all perfectly legal, but the amounts they work in are generally small, so they haven’t been automatically tracked.
The would-be Times Square bomber financed his plot using small hawala money transfers. So did the Sept. 11 hijackers.