Tracking Terrorist Finances: The ‘Swift’ Program and the American Anti-Terrorist Finance Regime

David B Bulloch

doi:10.37974/alf.203

Abstract

This article examines the political and legislative history of a formerly classified anti-terrorist finance program initiated in the days after 9/11 that subpoenaed millions of financial records from the Belgian-based Society for Worldwide Interbank Financial Telecommunications (SWIFT) without the knowledge of European authorities. The European outrage in response to its public disclosure in 2006 — and the subsequent struggle to generate support for the continuation of the program — has been interpreted by many as further evidence of a strategic divide concerning American and European efforts to thwart terrorism. This research will investigate the dramatic changes to the American anti-terrorist finance regime after 9/11, and will demonstrate that the European reluctance to cooperate with this program represents a fundamental disagreement concerning the prioritization of privacy rights rather than an unwillingness to take the steps necessary to combat the financing of terror.

Highlights

This article examines the political and legislative history of a formerly classified anti-terrorist finance program initiated in the days after 9/11 that subpoenaed millions of financial records from the Belgian-based Society for Worldwide Interbank Financial Telecommunications (SWIFT) without the knowledge of European authorities
This research will investigate the dramatic changes to the American antiterrorist finance regime after 9/11, and will demonstrate that the European reluctance to cooperate with this program represents a fundamental disagreement concerning the prioritization of privacy rights rather than an unwillingness to take the steps necessary to combat the financing of terror
The 1970 Bank Secrecy Act had previously placed an affirmative duty on financial institutions to report suspicious transactions, the existing banking regulations failed to detect the transfers between the hijackers — and the $130,000 in 9/11 seed money sent from banks in Germany and the United Arab Emirates — because the transactions were not necessarily inconsistent with the student profiles the terrorists had established

Summary

The History of the ‘Terrorist Finance Tracking Program’

On June 23, 2006, Eric Lichtblau and James Risen of the New York Times were the first to reveal the existence of a highly classified Bush administration program developed in the weeks after 9/11 to identify and track terrorists and. The Treasury formed the Financial Action Task Force (FATF) to identify and prioritise which individuals and organizations should be subject to blocking orders, and established the Executive Office for Terrorist Financing and Financial Crimes (EOTF/FC) in an effort to prevent the abuse of the international financial system by terrorists and their financial supporters.[40] All of these changes illustrate the extent to which the War on Terrorist Finance represents a remarkable turnaround from earlier regimes of anti-terrorist and anti-money laundering regulation. We will succeed in starving the terrorists of funding and shutting down the institutions that support or facilitate terrorism.[51]

IV.2 The USA PATRIOT Act

The Disclosure and Development of the TFTP

The American Reaction to the Revelation of the TFTP

The TFTP and the European Union’s Data Privacy Directive

VIII. Understanding the European Reaction

Conclusion