Banks enlisted for war on terrorism

November 01, 2001

Washington's pressure on banks to crack down on illicit money will impel fearful bankers into still tougher surveillance. To the tangle of checks on money laundering and flows to tax havens must now be added the hunt for often legal money flowing to what are deemed illicit activities. Banks face a huge reputational risk. But the extent to which they can take on policing roles and take initiatives to avert crime remains highly contentious. Neither the technology nor systems exist to make tracing tainted cash straightforward. So is the ultimate answer creating more vigilant, yet less commercial, corporate cultures?







Bush: putting banks worldwide on notice

When he unveiled his executive order on terrorist financing on September 24, president George W Bush described certain of the powers as "draconian". The order will enable the US to freeze, or possibly even to seize, the US assets of any bank that has had dealings with named terrorists. Follow-up legislation passing through Congress would impose mandates on banks to scrutinize customers and report suspicious activity. It would also give the US Treasury broad powers to track money overseas and to punish governments that fail to help in the crackdown.

On the face of it, this is a sweeping example of America's global reach and of Washington's deadly serious intent. David Hughes, a partner at law firm DLA, says: "It's a genuine threat. The long-arm jurisdiction says that if you touch US dollars, the US has jurisdiction to come after you.

Banks enlisted for war on terrorism

To unlock this article

Topics