Terror Financing Task Force Holds First Hearing of 2016

Feb 3, 2016 Issues: Anti-Terrorist Financing

WASHINGTON, D.C.Chairman Mike Fitzpatrick (R-PA) and Ranking Member Stephen F. Lynch (D-MA) together held the first hearing of the newly-reauthorized Task Force to Investigate Terrorism Financing Wednesday focused on trade-based money laundering.

Trade-based money laundering has been widely recognized as the most common form of money laundering and value transfer method utilized by crime and terrorist organizations, allowing these groups the ability to move billions of dollars annually virtually undetected. Given the considerable volume of international trade and the value of the transactions, the effects of trade-based money laundering can result in extensive repercussions for global commerce and government revenues. In response, the Department of Homeland Security established the first Trade Transparency Unit (TTU) in 2004 to examine anomalies and financial irregularities in trade data to identify instances of trade-based money laundering and customs fraud.

“In an increasingly connected world, trade-based money laundering allows terror and criminal syndicates to disguise their billions of dollars annually through the use of trade transactions in an attempt to legitimize their illicit origins. This cannot be allowed to continue,” said Fitzpatrick. “Building on what we know and have learned, this session of the task force will take a much closer look at this process as well as investigate several lesser known methodologies mentioned in previous hearings, including terror funding streams from Latin America, developing our regional partners’ capabilities to combat terror financing and the funding of foreign based terrorists.”

“With the complexity and rapid growth of international trade, there is ample opportunity for terrorist financers and criminal organizations to exploit the global financial system and engage in trade-based money laundering with low risk of being caught. We must increase transparency in the global trade network in order to increase the ability of the Financial Action Task Force (FATF) and other organizations to investigate this illicit money laundering and to halt this revenue source for terrorist organizations,” said Lynch. “I look forward to working closely with Chairman Fitzpatrick and our colleagues to address this critical issue and other potential vulnerabilities in the global financial system during the new session of the Task Force to Investigate Terrorism Financing.”

Testifying at the hearing were:

  • Mr. John Cassara, former U.S. Intelligence Officer and Treasury Special Agent
  • Mr. Louis Bock, former Senior Special Agent, U.S. Customs and Border Protection
  • Mr. Farley Mesko, Co-Founder and Chief Executive Officer, Sayari Analytics
  • Dr. Nikos Passas, Professor of Criminology and Criminal Justice, College of Social Sciences and Humanities, Northeastern University

Building on previous findings, the task force will continue to hold hearings with U.S. terror financing officials and global counterterrorism experts to identify weaknesses in current policy, while working to ensure terror groups are unable to financially support their operations.