Merchant of Death
Money, Guns, Planes, and the Man Who Makes War Possible

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Other Paths on Terrorism Financing
One of the significant challenges the next administration will face in combating terrorism is the fracturing consensus on international sanctions, as noted by the Washington Post.

There is no doubt the European and U.N. consensus that gave rise to the valuable tools has softened, if not vanished, in recent years. Much of friction has to do with anti-US sentiment, coupled with the inability or unwillingness of the designating parties to use what evidence there is against designated individuals in a judicial process.

The collapse of the sanctions regime would deprive the international community of the easiest way to have a direct and lasting impact on those suspected, at a reasonable level (and that is the tricky part) of funding terrorism. But the initial construct was never intended to be a permanent fix.

Rather, it was designed to give nations and international organizations a breathing space to create a permanent mechanism that was gave more room for due process and other concerns. This did not happen, and the sanctions committees at the UN and elsewhere have become less and less effective. My colleague Victor Comras, quoted in the Post piece, was on one of the most effective committees that was later downgraded because it made too many countries uncomfortable by naming names.

But as the New York Times Magazine piece on the innovative work of Stuart Levey and others at the Treasury Department makes clear, there are other, and perhaps better options.

The argument, put forth by several people in these articles, that terror finance is not worthwhile because terrorist attacks only cost a small sum each, is simply not valid, in my opinion. The infrastructure to maintain a widespread and loose-knit terrorist structure, is an enormously expensive enterprise. Cutting off the flow of money remains one of the most effective ways of preemptively dealing with terrorism, before attacks take place.

As my CTB colleague Andrew Cochran noted, the integrated efforts of the US Special Operations Forces and the Treasury Department, particularly in Iraq, have yielded impressive results. Though little discussed, this effort is an important element in the great weakening of al Qaeda in Iraq.

Levy and others have come up with targeted ways of effectively cutting off, or at least greatly reducing financial activity by Iran. Another interesting innovation would be perhaps to find a way to cut of Venezuela's oil support lifeline.

While the designation of Venezuela would certainly be viable under US guidelines for designating a state sponsor of terrorism, the political cost in a hemisphere where US influence is badly diminished would be great. But going after is oil money would be far less costly, and likely more effective.

A conference where I spoke last week sponsored by the Menges Hemispheric Security Project of the Center for Security Policy, the idea was floated because half of Venezuela's oil can only be refined in the United States. While Venezuela's oil production is rapidly falling, along with the price of oil, US consumption has eased. The cost to the Venezuelan government of cutting off access to the US market would be far higher to Venezuela than the United States.

My point is that the further we get from 9/11 and other attacks, the harder it is to hold a consensus on measures like the administrative freezing of assets without the right to judicial review. The old regime is going to collapse. The good news is that there are creative, new and less intrusive ways to do the same thing at a far smaller political cost on an international level.
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