Remarks by Under Secretary for Terrorism and Financial Intelligence David S. Cohen at Treasury's Counter-Terrorist Financing Symposium

When al-Qa'ida struck the United States on September 11, 2001, killing thousands, our nation was stunned. The American people demanded a swift and powerful response – to punish those behind the attacks, to leverage all elements of national power to protect the United States and its citizens, and to ensure that nothing like the attacks carried out that Tuesday morning ever happened again. Our military, with the help of our intelligence community, quickly swung into action, driving al-Qa'ida from its safe haven in Afghanistan, destroying its training camps, and disrupting its ability to plan, coordinate and launch another attack. But it was also understood that more could be done – and needed to be done – to fight al-Qa'ida. In the decade since 9/11, the United States government has undertaken an unprecedented effort to unmask and choke off al-Qa'ida's financial support networks. The strategies developed by Treasury's Office of Terrorism and Financial Intelligence (TFI) have placed the Department squarely within our country's national security community and at the forefront of the battle to deprive al-Qa'ida –and terrorists the world over – of the financial wherewithal to operate. Treasury is not alone in this fight, not by any stretch. This is truly a whole-of-government effort, involving our colleagues in the State, Justice and Defense departments, the Intelligence Community, and the law enforcement community. Nor is the United States alone in this fight. We work closely with the UN, which has established an extensive legal framework for combating terrorist financing on a global level. We work closely with dozens of countries – many of whom are represented here this morning – to stem the flow of funds to terrorists. And we work closely with the international banking community and others in the private sector to prevent terrorists from using the formal financial sector to receive, store, move and use funds. As we focus today on what the U.S. government has done and can do to combat terrorist financing, it is entirely fitting that we acknowledge the critical role played by each of these partners in the fight against al-Qa'ida and the financing of terrorism more broadly. This morning, I'd like to briefly share the Treasury Department's assessment of al-Qa'ida's current financial situation and sketch out where we will take Treasury's counter-terrorist financing efforts in the months and years to come. In the last few years, it became clear that al-Qa'ida was encountering financial difficulties. By 2010, we believed the organization was in its worst financial position in years. We assessed that al Qa'ida's increasingly precarious financial situation would not only impair its ability to operate, but also would likely send al Qa'ida and its affiliates in search of new sources of funding. Recent intelligence confirms that al-Qa'ida devotes a great deal of attention and effort to raising money and managing its budget. For example, we have learned that al-Qa'ida kept meticulous accounting statements on operating costs – such as weapons, fuel, and salaries – tracking expenditures that amounted to little more than one dollar. We have also learned that al-Qa'ida's shaky bottom line attracted the attention al-Qa'ida's senior leaders, who, in early 2010, lamented that al-Qa'ida was experiencing great financial hardship. These difficulties were not simply a theoretical concern for al-Qa'ida's leaders. Indeed, the shortfall had begun to affect al-Qaida's operational capabilities. New information reveals that early last year, al-Qa'ida not only was stressed financially, it was struggling to allocate funds to plan and execute terrorist attacks against the U.S. homeland and Western interests. This financial squeeze led al-Qa'ida to explore new avenues for funding. And by early last year, the terrorist group was seeking to fundraise through another method: kidnapping-for-ransom. The picture we have been able to piece together from recent intelligence includes both good and bad news. While it was heartening to get confirmation that global efforts to disrupt al-Qa'ida's financing had begun to pay off, we are reminded that al-Qa'ida remains an innovative, resourceful and adaptive adversary. And we will need to continue to innovate and adapt, as well, to maintain the impact we began to see in recent years. With that in mind, let me turn now to the key areas where we will be focusing our energy and efforts. First and foremost, we will keep the pressure on. The recent deaths of Usama bin Laden, Ilyas Kashmiri and Atiyah abd al-Rahman, capping off a decade's worth of comprehensive efforts to attack al-Qa'ida, has left it weakened. But now is no time to let up. For us at Treasury, that means continuing to concentrate on disrupting al-Qa'ida's financial and material support networks. Just yesterday, we designated three senior Pakistan-based al-Qa'ida leaders, including al-Qa'ida commander Abu Yahya al-Libi, Atiyah's deputy until Atiyah's death last month, and Younis al-Mauritani, a long-time al-Qa'ida fighter in charge of al-Qa'ida's external operations as recently as last year, who was arrested by Pakistani authorities just a few days ago. These actions follow a set of designations we announced in July targeting a key financial pipeline for al-Qa'ida – which runs from Kuwait and Qatar, through Iran and into Pakistan – and which depends on an agreement between al-Qa'ida and the Iranian government to allow this network to operate within Iran's borders. So job one is to continue our intensive focus on shutting down al-Qa'ida's pipelines of money, men and materiel. Second, we will step up our efforts with our allies and partners around the world – particularly in the Gulf – to encourage more consistent and comprehensive counter-terrorist financing efforts. Although the power and reach of the United States Treasury is substantial, we need other countries to work with us to combat al-Qa'ida, its affiliates and other terrorist organizations. This is especially true for Kuwait and Qatar, which unfortunately have become permissive environments for extremist fundraising. There is no question that Kuwait and Qatar are strong allies of the United States, and that we share many important goals and work closely together on many important initiatives. But the fact remains that Kuwait is the only country in the Gulf that has not criminalized terrorist financing. In a recent mutual evaluation of Kuwait, the International Monetary Fund emphasized that this deficiency substantially hampers Kuwait's ability to combat terrorist financing. And although Qatar enacted a good terrorist financing law a year ago, implementation has lagged. The approach taken by Kuwait and Qatar poses a danger to them, and to all of us. So we will continue to work with Kuwait and Qatar, and urge them to take the necessary steps, as others in the region have done over the past decade. Third, as al-Qa'ida evolves, and the nature of the threat posed by al-Qa'ida and its affiliates changes, we will continually adapt and expand our counter-terrorist financing efforts to meet the shifting challenge. Most importantly, we are increasing efforts to combat the financial support networks for al-Qa'ida in the Arabian Peninsula (AQAP), al-Qa'ida in the Islamic Maghreb (AQIM), al Shabaab, and others inspired by, or possibly affiliated with, al-Qa'ida, such as Boko Haram. Attacking these groups' finances presents new and different challenges, because their means and methods of funding and facilitation differ from al-Qa'ida's traditional donor-based fundraising model. They also differ among one other. Working with our colleagues in the intelligence community and our partners around the world, we will devise disruption strategies tailored to the ways in which each group raises, stores, and moves money. Fourth, we are focusing on emerging trends in how terrorists raise money–most importantly, the increased use of kidnapping-for-ransom, which is quickly becoming a critical funding source for al-Qa'ida and its affiliates. For example, we have information that AQIM has raised tens of millions of dollars since 2008 through kidnapping-for-ransom operations in Africa. Combating kidnapping-for-ransom is notoriously difficult. At the policy level, it is easy enough to say that no one should pay ransoms. But at the personal level –when one's citizen, colleague or child is being held hostage – it is awfully hard to adhere to the “no-ransoms” policy. Few do, which is one reason that al-Qa'ida and its affiliates are turning increasingly to kidnapping-for-ransom. The U.S. Government has a policy against paying ransoms, and we believe this has dissuaded terrorists from targeting Americans. Our information reveals that earlier this year, AQIM was planning to target mainly Europeans, not Americans, for kidnapping-for-ransom operations because they believed European Governments would pay ransoms while the U.S. Government would not. In addition to bolstering the “no-ransoms” approach, the international community must also make kidnapping harder in the first place through improved security measures. And if ransoms are paid, we must make it more difficult for terrorist groups to move, store and use that cash. As a community of nations and institutions dedicated to combating terrorist financing, we simply cannot allow kidnapping-for-ransom to become the primary way that terrorists sustain their financial health. Finally, as we sharpen our efforts to combat new sources of terrorist funding, we will continue efforts to stay ahead of new ways terrorists store and move money. Our growing success in driving terrorists out of the formal financial sector has led terrorist facilitators to rely increasingly on informal methods of moving money – notably, hawalas and cash couriers. But it has also sparked an interest in exploiting new technologies and new payment methods, such as stored value cards to transactions by cell phones. These technologies hold great promise to bring people around the world into the formal financial sector, unquestionably a critically important policy goal. But these new methods of storing and moving value also create new vulnerabilities if not adequately covered by anti-money laundering and counter-terrorist financing regulations. So as we continue to disrupt specific actors and networks, we will also work to build a more transparent financial system with robust safeguards that is inhospitable to terrorist financing. In closing, as we remember the victims of the 9/11 attacks, this important milestone also provides us with an opportunity to reflect on the progress we have made in fighting al-Qa'ida and the broader threat of terrorism. Counter-terrorist financing has contributed importantly to that progress – more so than anyone would have predicted 10 years ago. And that is thanks to many of the people in this room, throughout Treasury, across the U.S. government, and around the world who have dedicated their careers to this cause. As we survey the challenges ahead – from terrorism to other threats to our national security – the effective deployment of financial measures will continue to be central to our strategy and our success. I know I speak for all of my colleagues in the Treasury Department when I say we relish the opportunity to use these tools to help make our country safer. ​