May 7, 2003
The White House
Washington, DC 20500
Dear Mr. President:
I am writing to request that you instruct the Secretary of the Treasury to identify both Syria and Lebanon as primary money laundering concerns under the authority provided in Section 311 of the USA PATRIOT Act (P.L. 107-56) and to require that U.S. financial institutions provide enhanced scrutiny of financial transactions from these countries to ensure funds linked to international terrorists do not originate from or pass through financial institutions in those countries on their way to the United States. I strongly believe these actions will help curb the funding of international terrorism and could assist in the return of funds stolen from the Iraqi people.
The Secretary of State has designated Syria as a state whose government has repeatedly provided support for acts of international terrorism and has provided designated foreign terrorist organizations, such as Hamas and Hizballah, with sanctuary. The International Narcotics Control Strategy Report (INCSR), a group of federal agencies with anti-money laundering responsibilities, has classified Syria as a country to be monitored for potential money laundering. There have been a number of published reports stating that individuals from Saddam Hussein's Iraqi regime have attempted to move to Syria and may be using the its financial system to divert funds which have been stolen from the Iraqi people.
The Government of Lebanon has made some progress in updating its anti-money laundering laws, as the Financial Action Task Force has recognized, and it should be commended for doing so. However, Lebanon remains one of the more sophisticated and well-capitalized banking sectors in the Middle East. Combined with a tradition of bank secrecy, the extensive use of foreign currency, the influx of remittances from expatriated workers, and a lack of financial accountability and enforcement, Lebanon has developed a financial environment conducive to laundering the financial proceeds of international crimes such as narcotics, counterfeiting and smuggling. The INCSR has designated Lebanon as a jurisdiction of primary money laundering concern.
The Financial Crime Enforcement Network (FinCEN) has conducted an analysis of the Suspicious Activity Reporting System (SAR) related to Lebanon for the period of January 2002 through October 2003. The FinCEN analysis has revealed 286 SARs that could be linked to transactions associated with suspicious or fraudulent wire transfer activities between Lebanon and other countries. Many of these transactions were structured in an attempt to avoid reporting requirements. Two of the SARs describe the reason for their filing as directly related to possible terrorist activities.
In May 2002, two men in Charlotte, North Carolina were convicted and seven others pled guilty to providing material support for Hizballah. In Dallas, Texas, a senior leader of Hamas has been indicted for conspiring to violate laws that prohibit dealings in terrorist funds.
I believe the United States must take any and all necessary measures to stop international terrorist organizations -- such as Hamas and Hizballah -- and former members of the Iraqi government who may be residing in Syria, Lebanon, and other countries in the area from supporting terrorism overseas and in the United States with the proceeds of international crime.
The United States has the largest and most accessible economic marketplace in the world. Foreign financial institutions and jurisdictions must have unfettered access to markets to effectively work within the international economic system.
In 2000, I introduced legislation that became Section 311 of the USA PATRIOT Act to provide the federal government with the authority to leverage the power of United States financial markets to encourage countries like Syria and Lebanon to reform and enforce their counter-money laundering and counter-terrorist financing laws. As you are aware, it provides measures that are graduated, discretionary, and targeted, focusing on international transactions involving criminal proceeds, while allowing legitimate international commerce to continue unimpeded.
If we are to lead the world in the fight against terror, we must effectively use our own laws to cut off the flow of laundered funds from terrorist groups through the international financial system. The measured use of Section 311 authority against Syria and Lebanon provides the United States an opportunity to demonstrate leadership in the fight against international terrorism and money laundering. Thank you in advance for your consideration of my request.
John F. Kerry