Global crackdown on terror cash

WASHINGTON - Saying international cooperation in the fight against terrorist funding was growing, the United States Treasury Department said yesterday that 20 countries, including New Zealand, had ordered their banks to freeze assets within their borders linked to terror groups.

Another dozen nations have agreed to take other measures, including asking their financial institutions to more closely scrutinise their customers and their sources of funds, Treasury said.

Earlier, President George W. Bush had said about $US6 million ($14.94 million) in assets were "linked to terrorist activity". He said the money was in 30 US accounts and 20 accounts overseas.

Only some of the countries on the list released yesterday have said they have actually found assets belonging to those groups and individuals targeted by the US. The list includes Belgium, Brazil, Canada, Paraguay, Uruguay, Venezuela, Australia, Thailand, Japan, Britain, Austria, Germany, Switzerland, New Zealand, France, Luxembourg, Pakistan, the United Arab Emirates, Argentina and the Bahamas.

The 12 countries cooperating through those other measures include Bahrain, Nicaragua, Cambodia, Colombia, Panama, St Lucia, Portugal, El Salvador, Uruguay, Venezuela, Mali, and the Philippines.

The department also said it welcomed passage of anti-money laundering legislation by the Philippines. The island nation was along with Russia and Nauru singled out by Financial Action Task Force, an international group aimed at cracking down on money laundering, earlier in the year. Russia has since passed an anti-money laundering bill.

Britain stole a lead in the global crackdown on "terrorist funds", saying it had frozen almost $US90 million ($224.21 million) that Afghanistan's ruling Taleban had deposited in a London bank.

The Government also promised sweeping new laws to crack down further on money laundering and tighten up the extradition and deportation regime.

Chancellor of the Exchequer Gordon Brown said the freezing of an account in a London-based European bank last week meant a total of $US88.4 million of funds were now out of bounds to the Taleban, Saudi-born militant Osama bin Laden and groups linked to him.

"We call upon all nations to ensure that just as there is no safe haven for terrorists, there is no safe hiding place for terrorist funds," Brown said. "Ready access to finance is the lifeblood of modern terrorism."

The Government has announced an attack on the estimated £2.5 billion ($9.1 billion) that is fraudulently laundered through black-market bureau de change. Ministers estimate that 65 per cent of the money passing through bureau de change comes from illegal sources, such as terrorist groups and drug dealers, with holidaymakers buying foreign currency representing just 8 per cent of transactions.

A Downing Street spokesman said: "Seventy-five per cent of heroin and opium comes from Afghanistan. There are clear links with bin Laden and there are concerns that he and his associates may be profiting from that."

Poppy cultivation and heroin production is likely to boom following the attacks. US and Pakistani anti-drug authorities say prices have nose-dived and thousands of Afghan opium poppy farmers have fled threatened US strikes.

British bureau de change will have to report suspicions about cash transactions that may be linked to terrorist groups, as banks must do now. Police will get extra powers to investigate currency shops suspected of handling "dirty" money. The moves are expected to be rushed into law in weeks.

Indonesia's Government says it will revoke the citizenship of those who travel to Afghanistan to fight against any US military operation there. Immigration director Muhamad Indra said the law allowed this since the Indonesians would be engaging in overseas military action without the Government's consent.

And the Malaysian Government said it was trying to track Malay Muslims who travelled to Islamic countries to study at religious schools and who may have entered Afghanistan and received military training.

- AGENCIES

Map: Opposing forces in the war against terror

Afghanistan facts and links