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03 March 2003

Treasury Department Creates Unit to Combat Terrorist Financing

(Aims to prevent misuse of domestic and international financial
systems) (1010)


The U.S. Department of the Treasury is creating a new unit that will
set strategy and policy for combating terrorist financing.

In a March 3 news release, Treasury said the new Executive Office for
Terrorist Financing and Financial Crimes would work with the financial
services industry to locate terror-related accounts and groups.

The office will be run by Juan Zarate, deputy assistant secretary for
terrorist financing and financial crimes, and report to the Treasury's
general counsel, David Aufhauser, who heads a key interagency group
that coordinates U.S. efforts to cut off the flow of money to
terrorists.


The new unit will oversee Treasury's Financial Crimes Enforcement
Network (FINCen), an investigative and information-gathering bureau,
and the Office of Foreign Asset Controls (OFAC), which carries out
U.S. orders blocking bank accounts and freezing assets of suspected
terrorist groups and their supporters.

Following is the text of the Treasury news release:

(begin text)


U.S. Department of the Treasury
Office of Public Affairs
Monday, March 3, 2003

U.S. Treasury Department Announces
New Executive Office for Terrorist Financing and Financial Crimes


The United States Treasury Department today announced the formation of
a new Executive Office for Terrorist Financing and Financial Crimes
(EOTF/FC) reporting directly to the Deputy Secretary. This office has
been charged with coordinating and leading the Treasury Department's
multi-faceted efforts to combat terrorist financing and other
financial crimes, both within the United States as well as abroad.

"President Bush has reaffirmed that stopping the flow of money to
terrorist groups is a top Treasury Department priority, and towards
that end I am announcing today the formation of a new office dedicated
to that charge," stated Treasury Secretary John Snow.

The Office will work closely with other offices within the Treasury
and throughout the U.S. government to identify, block, and dismantle
sources of financial support for terror and other criminal activities,
including money laundering. In addition, the team will work with
international partners to expand the fight against terrorist financing
and financial crimes in other nations. The Office will focus on
reducing the risk that the domestic and international financial
systems are being misused by criminals and terrorists.

To continue Treasury's leadership on these critical issues, the new
Office is charged with the following duties: developing and
implementing U.S. government strategies to combat terrorist financing
domestically and internationally (in concert with Treasury's
International Affairs Task Force on Terrorist Financing); developing
and implementing the National Money Laundering Strategy, as well as
other policies and programs to fight financial crimes; participating
in the department's development and implementation of U.S. government
policies and regulations in support of the PATRIOT Act, including
outreach to the private sector; joining in representation of the
United States at focused international bodies dedicated to fighting
terrorist financing and financial crimes; and developing U.S.
government policies relating to financial crimes.

The office will be led by Juan Zarate, Deputy Assistant Secretary for
Terrorist Financing and Financial Crimes. Mr. Zarate will report to
the Deputy Secretary of the Treasury. Until a new Deputy Secretary is
named to fill the current vacancy, Mr. Zarate will report to David
Aufhauser, Treasury General Counsel, who serves as the Chairman of the
NSC [National Security Council] policy coordinating committee on
terrorist financing.

Within the U.S. Treasury, the new Office will provide policy guidance
for the Financial Crimes Enforcement Network (FinCEN) bureau as it
works with the financial sector, the law enforcement community, and
foreign financial intelligence units to foster cooperation against
domestic and international financial crimes. Also, the EOTF/FC will
provide policy guidance to the Office of Foreign Asset Control (OFAC).
OFAC administers U.S. trade and economic sanctions, and targets and
blocks financial transactions and assets of terrorists, narcotics
traffickers and foreign countries that are known to threaten U.S.
national security.

"FinCEN welcomes the establishment of this important office which will
serve as a focal point for the Department of the Treasury's vital role
in support of the efforts against terrorist financing, money
laundering, and other financial crimes," stated FinCEN Director Jim
Sloan.

OFAC Director Rick Newcomb added, "This step by the Treasury
Department should enhance and strengthen the role OFAC has
traditionally played in targeting those countries, organizations and
individuals that threaten U.S. national security, especially through
the targeting of terrorists and the financial network that supports
their activities."

This new office will work side by side with the International Affairs
Task Force on Terrorist Financing (TFTF), led by Director William C.
Murden, which continues to work with other countries to implement and
improve mechanisms for blocking terrorist assets globally, and thereby
deny terrorists access to formal and informal financial systems. The
TFTF will continue to track global progress on blocking terrorist
assets and coordinate anti-terrorist financing action in international
fora such as the IMF [International Monetary Fund] and G-7 [Group of
Seven industrialized countries: United States, Canada, United Kingdom,
Italy, Japan, Germany and France].

The department is also announcing today that until a Deputy Secretary
is confirmed, Aufhauser will chair the Treasury Department's existing
USA PATRIOT Act Regulation Review Task Force which was established by
former Deputy Treasury Secretary Kenneth Dam as part of this
department's effort to develop effective regulations which will help
us crack down on terrorist financing and money laundering. The task
force reviews the regulations we are drafting and have finalized as a
result of the Patriot Act to see if they are unnecessarily burdensome
on the financial community -- or if they are not muscular enough.
While a Treasury-led effort, the task force reaches out to all the
experts in this area, both public and private including appropriate
federal regulators from the SEC [Securities and Exchange Commission),
OTS [Office of Thrift Supervision], OCC [Office of the Controller of
the Currency], FDIC [Federal Deposit Insurance Corporation], CTFC
[Commodity Futures Trading Commission] and the FED [Federal Reserve
Bank], as well as industry groups.

(end text)

(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)