FROM THE OFFICE OF PUBLIC AFFAIRS

Good afternoon.

On September 11^th 2001, international terrorists demonstrated their intent and capability to slaughter thousands of innocent people. President Bush rallied the United States and our allies, and organized a military campaign against Al Qaeda’s training camps and hideouts. The President also launched a financial war on terrorism, assigning the U.S. Treasury to find, freeze, deter or destroy assets used for terrorist purposes worldwide.

The financial war on terrorism has required an extraordinary level of international cooperation for its success. Terrorist assets flow without regard for oceans, languages, or national borders. And they travel in countless disguises, whether as bank transfers, gold bricks hidden in cargo containers, goods with false invoices, or donations to deceptive charities.

Many of the states represented here have been strong allies in our common battle. Since September 11, we and our coalition partners have publicly designated 235 terrorists or terrorist supporters. We have blocked over $112 million around the world, and closed accounts that have been used to move many times that amount of money. 166 countries and jurisdictions have blocking orders in force, and many of these are APEC members.

These achievements are the start of a protracted battle – we cannot afford to underestimate the enemies of civilization. In this policy dialogue, I would like to lay out our strategy in further detail, and I would like to consider how APEC can move forward even more aggressively to advance the financial war on terrorism in its second year.

Our strategy is three-fold. First, we are applying technology, intelligence, and regulations to locate and freeze the assets of terrorists, wherever they may be. New powers granted to us by the President and Congress have enabled us to scour the world financial system for suspicious activities with greater precision than ever before.

Similar laws enacted by our allies have permitted them to join us in the mission, and the United States is providing extensive technical assistance to further assist the international effort.

Second, we and our allies are attacking the terrorist financial infrastructure: their underground methods for transferring funds across borders and between cells, whether through banks, businesses, hawalas, fake charities, or other means. We are driving the terrorists out of the modern financial infrastructure and into less efficient transfer methods, which are more difficult, slower, and more easily intercepted by law enforcement. By funneling them into the law enforcement net, we inhibit their ability to carry out new attacks.

Third, we are engaging nations around the world to join us in closing access to the global financial system. For example, in May, the Philippines, Malaysia and Indonesia signed a Terrorism Pact that would allow anti-terrorism exercises as well as combined operations to hunt suspected terrorists, to establish information hotlines and share airline passenger lists. The United States is also providing extensive technical assistance to help other nations create the systems they need to disrupt terrorist financing.

The war on terrorist financing is an immense undertaking. The openness of our modern financial system, which allows savers and investors to fuel economic growth in every nation, also creates opportunities for terrorists to hide in the shadows. Our challenge is to protect the freedom and flexibility of the world financial system, which is essential for successful economic development in the APEC states in particular, while driving our enemies into the sunlight, where we can sweep them up.

To achieve our common goals in fighting terrorist finances, I propose today that we, the APEC Ministers, develop an action plan on terrorist financing, which the APEC leaders could endorse at their meeting in October. The action plan would build on plans now in place with the G-20 and the Association of Southeast Asian Nations, and would emphasize the challenges of the second phase of the financial war on terrorism. In this second phase, we are moving beyond joint designations of terrorist entities and blocking assets in the formal banking sector to pursue terrorist finances flowing through informal channels.

The current draft of this action plan, now circulating, would commit APEC nations to the following points:

• Improving oversight of hawalas and charities to ensure that they are not abused by terrorists;
• Identifying and reporting on the economic, structural, and regulatory factors in the formal financial sector that encourage the use of alternative remittance systems;
• Cutting off terrorist access to the international financial system by freezing their assets and the assets of their supporters;
• Increasing the effectiveness of freeze orders on terrorist-related assets by fully implementing current laws, and by ensuring compliance and consistent reporting;
• Implementing international agreements and standards as established by the United Nations, the Financial Action Task Force, the IMF, the World Bank, and other relevant bodies;
• Working cooperatively on law enforcement actions and information sharing;
• Collaborating in the provision of technical assistance to countries that need help in developing and implementing necessary laws, regulations, and institutions to combat terrorist financing and money laundering.
• Endorsing cooperation between private financial institutions and governments, such as the Wolfsberg Statement on Suppression of the Financing of Terrorism.

We welcome and we are seeking the views of every APEC state on this action plan draft, and we hope to build a consensus over the coming weeks.

Ultimately, our success together will not be measured by dollars blocked and groups designated. It will be measured in the safety and security of our citizens, and our shared civilization. Thank you again for your aggressive leadership in this critical effort – the United States looks forward to even stronger ties with our APEC partners as we move forward in the financial war on terror.