Terrorist Financing: Better Strategic Planning Needed to Coordinate U.S. Efforts to Deliver Counter-Terrorism Financing Training and Technical Assistance Abroad
Published: 2005-10-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Terrorist groups need significant amounts of money to organize, recruit, train, and equip adherents. U.S. disruption of terrorist financing can raise the costs and risks and impede their success. This report (1) provides an overview of U.S. government efforts to combat terrorist financing abroad and (2) examines U.S. government efforts to coordinate training and technical assistance. We also examined specific accountability issues the Department of the Treasury faces in its efforts to block terrorists' assets held under U.S. jurisdiction.
section_title: What GAO Found
paragraphs: U.S. efforts to combat terrorist financing abroad include a number of interdependent activities--terrorist designations, intelligence and law enforcement, standard setting, and training and technical assistance. First, the U.S. government designates terrorists and blocks their assets and financial transactions and supports similar efforts of other countries. Second, intelligence and law enforcement efforts include operations, investigations, and exchanging information and evidence with foreign counterparts. Third, U.S. agencies work through the United Nations and the Financial Action Task Force on Money Laundering to help set international standards to counter terrorist financing. Fourth, the U.S. government provides training and technical assistance directly to vulnerable countries and works with its allies to leverage resources. The U.S. government lacks an integrated strategy to coordinate the delivery of counter-terrorism financing training and technical assistance to countries vulnerable to terrorist financing. Specifically, the effort does not have key stakeholder acceptance of roles and procedures, a strategic alignment of resources with needs, or a process to measure performance. First, the Department of Treasury does not accept the Department of State leadership or the State-led Terrorist Financing Working Group's (TFWG) procedures for the delivery of training and technical assistance abroad. While supportive of the Department of State's role as coordinator of TFWG efforts, the Department of Justice officials confirmed that roles and procedures were a matter of disagreement. Second, the U.S. government does not have a clear presentation and objective assessment of its resources and has not strategically aligned them with its needs for counter-terrorist financing training and technical assistance. Third, the U.S. government, including TFWG, lacks a system for measuring performance and incorporating results into its planning efforts. The Treasury faces two accountability issues related to its terrorist asset blocking efforts. First, Treasury's Office of Foreign Assets Control (OFAC) reports on the nature and extent of terrorists' U.S. assets do not provide Congress the ability to assess OFAC's achievements. Second, Treasury lacks meaningful performance measures to assess its terrorist designation and asset blocking efforts. OFAC is in the process of developing more meaningful performance measures aided by its early efforts to develop an OFAC-specific strategic plan. Officials stated that OFAC's new performance measures will be completed by December 1, 2005, and its strategic plan will be completed by January 1, 2006; however, they did not provide us with documentation of milestones or completion dates.

section_title: Letter
paragraphs: After the September 11, 2001, attacks, the United States and its allies  quickly recognized the urgent need to detect, dismantle, and deter terrorist  financing networks around the world. Disrupting terrorist financing can  raise the terrorists’ costs and risks of gathering and moving assets and is  necessary to impede their ability to carry out significant operations.  Terrorist financiers operate more easily in countries with systems that  enable them to hide their efforts without difficulty. As the United Nations  reports, more than ever before, security threats are interrelated and a  threat to one country is a threat to all. No country by its efforts alone can  make itself invulnerable to today’s threats. It is in every country’s interest,  accordingly, to cooperate with other countries to address their most  pressing threats, because doing so will maximize the chances of reciprocal  cooperation to address its own threat priorities.
You asked us to address specific U.S. efforts to combat terrorist financing  abroad as a follow-up to our previous work on the nature and extent of  terrorists’ use of alternative financing mechanisms. In this report, we (1)  provide an overview of U.S. government efforts to combat terrorist  financing abroad and (2) examine U.S. government efforts to coordinate  the delivery of training and technical assistance to vulnerable countries. In  addition, you requested that we examine specific accountability issues the  Department of the Treasury (Treasury) faces in its efforts to block  terrorists’ assets held under U.S. jurisdiction.
In conducting our review, we examined documentation and interviewed  officials from U.S. agencies, including the Departments of State, the  Treasury, Justice, Homeland Security, and Defense, as well as from the  intelligence community. We also assessed information from the United  Nations (UN), Financial Action Task Force (FATF) on Money Laundering,  World Bank and International Monetary Fund (IMF). We conducted field  work in Pakistan, Indonesia, and Paraguay. At these locations, we assessed  information from government, law enforcement, nongovernmental  organizations, regional organizations, and donor government officials, as  well as U.S. embassy officials. Although we requested a meeting, we did not  obtain access to the National Security Council (NSC), which is responsible  for the overall coordination of the interagency framework for combating  terrorism including the financing of terrorist operations. However, the U.S.  agencies provided the necessary information that we needed to conduct  our work and support our findings, conclusions, and recommendations. We  performed our work from April 2004 to July 2005 in accordance with  generally accepted government auditing standards. For further details  about our scope and methodology, see appendix I.
subsections: section_title: Background
paragraphs: Funds that support terrorist activity may come from illicit activities, such  as counterfeit goods, contraband cigarettes, and illicit drugs, but are also  generated through means such as fundraising by legal non-profit entities.  According to State, it is the terrorists’ use of social and religious  organizations and, to a lesser extent, state sponsorship, which  differentiates their funding sources from those of traditional transnational  organized criminal groups. While actual terrorist operations require only  comparatively modest funding, international terrorist groups need  significant amounts of money to organize, recruit, train, and equip new  adherents and to otherwise support their activities.
Simply, the financing of terrorism is the financial support, in any form, of  terrorism or of those who encourage, plan, or engage in it. Some  international experts on money laundering continue to find that there is  little difference in the methods used by terrorist groups or criminal  organizations in attempting conceal their proceeds by moving them  through national and international financial systems. These experts simply  define the term “money laundering” as the processing of criminal proceeds  to disguise their illegal origin in order to legitimize their ill-gotten gains.  Disguising the source of terrorist financing, regardless of whether the  source is of legitimate or illicit origin, is important to terrorist financiers. If  the source can be concealed, it remains available for future terrorist  financing activities.
The President established a Policy Coordination Committee under the  auspices of NSC to ensure the proper coordination of counter-terrorism  financing activities and information sharing among all agencies including  the departments of Defense, Justice, Homeland Security, State, and the  Treasury, as well as the intelligence and enforcement community.  Treasury’s OFAC is the lead U.S. agency for administering economic  sanctions, including blocking the assets of terrorists designated either by  the United States unilaterally, bilaterally, or as a result of UN Security  Council Resolution designations.
The international community has acted on many fronts to conduct anti- money laundering and counter-terrorism financing efforts. For example,  the UN has adopted treaties and conventions that once signed, ratified, and  implemented by member governments have the effect of law and enhance  their ability to combat money laundering and terrorist financing. FATF, an  intergovernmental body, has set internationally recognized standards for  developing anti-money laundering and counter-terrorism financing regimes  and conducting assessments of countries abilities to meet these standards.
In addition, the Egmont Group serves as an international network fostering  improved communication, information sharing, and training coordination  for 101 Financial Intelligence Units (FIU) worldwide. See appendix II for  more information on key international entities and efforts.
Countries vulnerable to terrorist financing activities generally lack key  aspects of an effective counter-terrorism financing regime. According to  State officials, a capable counter-terrorism financing regime consists of five  basic elements: an effective legal framework, financial regulatory system,  FIU, law enforcement capabilities, and judicial and prosecutorial  processes. To strengthen anti-money laundering and counter-terrorism  efforts worldwide, international entities such as the UN, FATF, World Bank  and the IMF, as well as the U.S. government, agree that each country should  implement practices and adopt laws that are consistent with international  standards.
section_title: U.S. Efforts to Combat Terrorist Financing Abroad Include a Number of Interdependent Activities
paragraphs: U.S. government agencies participate in a number of interdependent efforts  to address the transnational challenges posed by terrorist financing,  including terrorist designations, intelligence and law enforcement,  international standard setting, and training and technical assistance.
subsections: section_title: U.S. Government Agencies Use Designations to Disrupt Terrorist Networks
paragraphs: U.S. agencies participate in global efforts to publicly designate individuals  and groups as terrorists and block access to their assets. According to  Treasury officials, international cooperation to designate terrorists and  block their assets is important because most terrorist assets are not within  U.S. jurisdiction and may cross borders. According to U.S. government  officials, public designations discourage further financial support and  encourage other governments to more effectively monitor the activities of  the designated individual or organization. Importantly, designations may  lead to the blocking of terrorist assets, thereby impeding terrorists’ ability  to raise and move funds and possibly forcing terrorist to use more costly,  less efficient, more transparent, and less reliable means of financing.
U.S. agencies led by State have worked with the UN to develop and support  UN Security Council resolutions to freeze the assets of designated  terrorists. For example, in October 1999, the Security Council adopted UN  Security Council Resolution 1267, which called on all member states to  freeze the assets of the Taliban, and in December 2000, the Security Council  adopted Resolution 1333, imposing targeted sanctions against Osama bin  Laden and al Qaeda. Then, in response to the attacks of September 11,  2001, the UN Security Council adopted Resolution 1373, which required all  UN member states to freeze funds and other financial assets or economic  resources of persons who commit or attempt to commit, participate in, or  facilitate terrorist acts. Later in January 2002 the UN Security Council  adopted Resolution 1390, which consolidated the sanctions contained in  Resolutions 1267 and 1333 against the Taliban, Osama bin Laden, and al  Qaeda. In July 2005, the Security Council adopted Resolution 1617, which  extends sanctions against al Qaeda and the Taliban and strengthens  previous related resolutions. The UN has listed over 300 individuals and  over 100 entities for worldwide asset blocks. Additionally, State’s Bureau of  International Organization Affairs ensures designations related to al Qaeda,  the Taliban, or Osama bin Laden are made worldwide obligations through  the UN Security Council Resolution 1267 Committee and helped to craft  and aided the adoption of UN Security Council Resolution 1373 and  assisted in the creation of the UN Counterterrorism Committee to oversee  its implementation. The United States has also participated in bilateral  efforts to designate terrorists. For example, as of July 2005, the United  States and Saudi Arabia jointly designated over a dozen Saudi-related  entities and multiple individuals as terrorists or terrorist supporters,  according to State.
U.S. agencies including the Departments of Homeland Security (Homeland  Security), Justice, State, and Treasury, and other law enforcement and  intelligence agencies have implemented an interagency process to  coordinate designating terrorists and blocking their assets. For example,  State’s Economic Bureau coordinates policy implementation at the  working level, largely through the network of Terrorism Finance  Coordinating Officers located at embassies worldwide. Through this  interagency coordination, the agencies work together to develop adequate  evidence to target individuals, groups, or other entities suspected of  terrorism or terrorist financing. As the lead agency for the blocking of  assets of international terrorist organizations and terrorism-supporting  countries, Treasury’s OFAC compiles the evidence needed to support  terrorist designations conducted under the Secretary of the Treasury’s  authority. State’s Office of the Coordinator for Counterterrorism follows  the same process for terrorist designations conducted under the Secretary  of State’s authority. State’s Bureau of International Organization Affairs  may present this evidence to the UN for consideration by its members.  According to a senior State official, the agencies work together on a regular  basis to examine and evaluate new names and targets for possible  designation and asset blocking and to consider other actions such as  diplomatic initiatives with other governments and exchanging information  on law enforcement and intelligence efforts.
section_title: U.S. Government Agencies Conduct Intelligence and Law Enforcement Activities Across Borders
paragraphs: The U.S. strategy to combat terrorist financing abroad includes law  enforcement techniques and intelligence operations aimed at identifying  criminals and terrorist financiers and their networks across borders in  order to disrupt and dismantle their organizations. Such efforts include  intelligence gathering, investigations, diplomatic actions, sharing  information and evidence, apprehending suspects, criminal prosecutions,  asset forfeiture, and other actions designed to identify and disrupt the  flow of terrorist financing. According to State, in order to achieve results,  the intelligence community, law enforcement, and the diplomatic corps  must develop and exploit investigative leads, employ advanced law  enforcement techniques, and increase cooperation between domestic and  foreign financial investigators and prosecutors.
U.S. intelligence and law enforcement agencies work together and with  foreign counterparts abroad, sometimes employing interagency or  intergovernmental investigative taskforces. U.S. agencies work  domestically and through their embassy attachés or officials or send agents  on temporary duty to work with their foreign counterparts on matters of  terrorist financing, including investigations. The Federal Bureau of  Investigation is the lead domestic law enforcement agency on counter- terrorism financing and makes extensive contributions to law enforcement  efforts abroad, including through their legal attachés. Homeland Security’s  Bureau of Immigration and Customs Enforcement attachés and agents  conduct work in trade-based money laundering and transporting of cash  across borders. The Internal Revenue Service’s Criminal Investigation  Division has an expertise in nonprofit organizations. The Drug  Enforcement Administration focuses on the narcotics trafficking nexus.  Moreover, Treasury’s Financial Crimes Enforcement Network (FinCEN) is  the U.S. government’s FIU and, as such, serves as the U.S. government’s  central point for the collection, analysis, and dissemination of financial  intelligence to authorized domestic and international law enforcement and  other authorities. Financial intelligence is sent through secured lines  among the FIUs belonging to the Egmont Group and shared with law  enforcement as part of these investigations.
section_title: U.S. Government Agencies Are Active Participants in International Standards Setting Efforts
paragraphs: The U.S. government has taken an active role in the development and  implementation of international standards to combat terrorist financing.  The UN conventions and resolutions and FATF recommendations on  money laundering and terrorist financing have set the international  standards for countries to develop the legal frameworks, financial  regulation, financial intelligence unit, law enforcement, and  judicial/prosecutorial elements of an effective counter-terrorist financing  regime. Importantly, international cooperation is a cornerstone of these  international standards.
The United States has signed each of the relevant UN conventions and  implemented its obligations pursuant to UN Security Council Resolutions  related to anti-money laundering and counter-terrorism financing.  According to State and Justice officials, they have provided training on  implementing the conventions, and State officials have drafted UN Security  Council Resolutions concerning terrorist financing. For example,  according to State, officials from Treasury and State met with the UN  Security Council Resolution 1267 Committee in January 2005 to detail U.S.  implementation of the resolution’s asset freeze, travel ban, and arms  embargo provisions and proposed several ideas aimed at reinforcing  current sanctions including enhancing the sanctions list, promoting  international standards, and improving bilateral and multilateral  cooperation.
The U.S. government also plays a major role within FATF to draft and  support international standards to combat terrorist financing. Treasury’s  Office of Terrorism and Financial Intelligence chairs the U.S. delegation to  the FATF and has chaired or co-chaired several FATF working groups, such  as the FATF Working Group on International Financial Institution Issues  and the FATF Working Group on Terrorist Financing. Treasury also  develops U.S. positions, represents the United States at FATF meetings,  and implements actions domestically to meet the U.S. commitment to the  FATF. Other components within Treasury, such as FinCEN, and other U.S.  government agencies, including Homeland Security, Justice, and State, and  the federal financial regulators, are also represented in the U.S. delegation  to FATF. For example, according to department officials, the Department of  Justice provided the initial draft for the original eight FATF special  recommendations on terrorist financing. Additionally, Homeland Security  gave significant input into Special Recommendation IX on Cash Couriers  due to the department’s expertise on detection of criminals’ cross-border  movements of cash. Moreover, the U.S. government supports efforts to  ensure that countries take steps to meet FATF standards. As a member of  FATF, the United States participates in mutual evaluations in which each  member’s compliance with the FATF recommendations is examined and assessed by experts from other member countries. Treasury also leads  U.S. delegations to FATF-style regional bodies to assist their efforts to  support implementation of FATF recommendations and conduct mutual  evaluations.
section_title: U.S. Government Agencies Provide Training and Technical Assistance to Vulnerable Countries
paragraphs: The U.S. strategy to combat terrorist financing abroad includes efforts to  provide training and technical assistance to countries that it deems  vulnerable to terrorist financing and focuses on the five basic elements of  an effective anti-money laundering/counter-terrorism financing regime  (legal framework, financial regulation, FIU, law enforcement, and judicial  and prosecutorial processes). According to State, its Office of the  Coordinator for Counterterrorism is charged with directing, managing, and  coordinating all U.S. government agencies’ efforts to develop and provide  counter-terrorism financing programs. The NSC established the State-led  interagency TFWG to coordinate the delivery of training and technical  assistance to the countries most vulnerable to terrorist financing. These  countries are known as priority countries of which there are currently  about two dozen. According to State’s Office of the Coordinator for  Counterterrorism, foreign allies inundated the U.S. government with  requests for assistance; therefore, TFWG developed a process to prioritize  the use of limited financial and human resources. Although other  vulnerable countries may be assisted through other U.S. government  programs as well as through TFWG, according to State, based on NSC  guidance, overall coordination is to take place through the TFWG process.  (See appendix III for TFWG membership and process.) TFWG schedules  assessment trips, reviews assessment reports, evaluates training proposals,  and assigns resources for training. According to State officials, the U.S.  government has conducted 19 needs assessment missions and provided  training and technical assistance in at least one of the five areas of an anti- money laundering/counter-terrorist financing regime to over 20 countries.
U.S. offices and bureaus, primarily within the departments of the Treasury,  Justice, Homeland Security, and State, and the federal financial regulators  provide training and technical assistance to countries requesting assistance  through various programs using a variety of methods primarily funded by  State and Treasury. Methods include training courses, presentations at  international conferences, the use of overseas regional U.S. law  enforcement academies or U.S.-based schools, and the placement of  intermittent or long-term resident advisors for a range of subject areas  related to building effective counter-terrorism and anti-money laundering  regimes. For example, Justice provides technical assistance on drafting  legislation that criminalizes terrorist financing and anti-money laundering.  Treasury’s Office of Technical Assistance (OTA) provides assistance to  strengthen the financial regulatory regimes of countries. In addition,  Treasury’s FinCEN provides training and technical assistance including  assistance in the development of FIUs, information technology  assessments, and specialized analytical software and analyst training for  foreign FIUs. (See appendix IV for key U.S. counter-terrorism financing and  anti-money laundering training and assistance for vulnerable countries.)
According to State, the U.S. government has also worked with international  donors and organizations to leverage resources to build counter-terrorism  financing regimes in vulnerable countries. According to State officials, they  have worked with the United Kingdom, Australia, Japan, the European  Union, the Organization of American States, the Asian Development Bank  (ADB), IMF, and the World Bank on regional and country-specific projects.  According to State, they have also funded the UN Global Program Against  Money Laundering to place a mentor in one country for a year to assist with  further development of its FIU. Similarly, Treasury officials said the  department funded a resident advisor to the ADB as part of the  Cooperation Fund for the Regional Trade and Financial Security Initiative.  Treasury officials also state they have coordinated bilateral and  international technical assistance with the FATF and the international  financial institutions, such as the World Bank and IMF, which encompassed  the drafting of legal frameworks, building necessary regulatory and  institutional systems, and developing human expertise. According to State  officials, efforts to share identified priorities and coordinate assistance by  the major donor countries took a step forward at the June 2003 G-8 Summit  with the establishment of the Counter-Terrorism Action Group, of which  the United States is a member. The Counter-Terrorism Action Group has  partnered with the FATF, providing that organization with a list of countries  to which its members are interested in providing counter-terrorism  financing assistance, so that the FATF could assess their technical  assistance needs. FATF delivered those assessments to the Counter- Terrorism Action Group in 2004 and, according to State officials, the  donors are now beginning to follow through with assistance programs.
section_title: U.S. Government Lacks Integrated Strategy to Coordinate the Delivery of Training and Technical Assistance
paragraphs: The U.S. government lacks an integrated strategy to coordinate the delivery  of counter-terrorism financing training and technical assistance to  countries vulnerable to terrorist financing. The effort does not have key  stakeholder buy-in on roles and practices, a strategic alignment of  resources with needs, or a process to measure and improve performance.  As a result, the effort lacks effective leadership and consistent practices, an  optimal match of resources to needs, and feedback on performance into  the decision-making process.
subsections: section_title: U.S. Effort Lacks Buy-in from Key Stakeholder on Roles and Procedures
paragraphs: U.S. interagency efforts to coordinate the delivery of counter-terrorism  financing training and technical assistance lack key stakeholder  involvement and acceptance of roles and procedures. As a result, the  overall effort lacks effective leadership, which leads to less than optimal  delivery of training and technical assistance to vulnerable countries,  according to agency officials. We have previously found that building a  collaborative management structure across participating organizations is  an essential foundation for ensuring effective collaboration; and strong  leadership is critical to the success of intergovernmental initiatives.  Moreover, involvement by leaders from all levels is important for  maintaining commitment.
Treasury, a key stakeholder, does not accept State’s position that State  leads all U.S. counter-terrorism financing training and technical assistance  efforts and disagreements continue between some Treasury and State  officials concerning current TFWG coordination efforts. According to State  officials, State leads the U.S. effort to provide counter-terrorism financing  training and technical assistance to all countries the U.S. government  deems vulnerable to terrorist financing. State bases its position on  classified NSC documents focused primarily on TFWG, State documents,  and authorizing legislation. Treasury, an agency that also funds as well as  provides training and technical assistance, asserts that State overstates its  role; according to Treasury, State’s role is limited to coordinating other U.S.  agencies’ provision of counter-terrorist financing training and technical  assistance in commonly agreed upon TFWG priority countries, and that  there are numerous other efforts outside of States’ purview. Justice, an  agency that provides training and technical assistance and receives funding  from State, states that it respects the role that State plays as the TFWG  chairman and coordinator and states that all counter-terrorism financing  training and technical assistance efforts should be brought under the  TFWG decision-making process. While supportive, Justice’s statement  demonstrates that the span of State’s role lacks clarity and recognition in  practice. Two senior Treasury OTA officials said they strongly disagree with  the degree of control State asserts over decisions at the State-led TFWG  regarding the delivery of training and technical assistance. According to a  Treasury Terrorist Financing and Financial Crimes (TFFC) Senior Policy  Advisor who attends TFWG, in practice the TFWG process is broken and  State creates obstacles rather than coordinates efforts. According to  officials from State’s Office of the Coordinator for Counterterrorism, who  chair TFWG, the only problems are the lack of Treasury’s TFFC and OTA  officials’ acceptance of State’s leadership over counter-terrorism financing  efforts and separate OTA funding.
Legislation authorizing the Departments of State and Treasury to conduct  counter-terrorism financing training and technical assistance activities  does not explicitly designate a lead agency. State derives its authority for  these activities from the International Security and Development  Cooperation Act of 1985, which mandates that the Secretary of State  “coordinate” all international counter-terrorism assistance. Treasury’s  primary authority for its assistance programs derives from a 1998  amendment to the Foreign Assistance Act of 1961, which authorized the  Secretary of the Treasury, after consultation with the Secretary of State and  the Administrator of the U.S. Agency for International Development, to  establish a program to provide economic and financial technical assistance  to foreign governments and foreign central banks. This provision further  mandates that State provide foreign policy guidance to the Secretary of the  Treasury to ensure that the program is effectively integrated into the  foreign policy of the United States.
State and Treasury officials also disagree on procedures and practices for  the delivery of counter-terrorism financing training and technical  assistance. State cited NSC guidance and an unclassified State document  focusing on TFWG as providing procedures and practices for delivering  training and technical assistance to all countries. Treasury officials told us  that the procedures and practices were only pertinent to the TFWG priority  countries and that there is no formal mandate or process to provide  technical assistance to countries outside the priority list. Moreover, Justice  officials told us that having procedures and practices for TFWG priority  countries that differ from those for other vulnerable countries creates  problems. This issue is further complicated by the lack of consistent and  clear delineation between the countries covered by TFWG and other  vulnerable countries also receiving counter-terrorism financing and anti- money laundering assistance funded through State and Treasury. Treasury  officials told us that TFWG procedures and practices are overly structured  and impractical and have not been updated to incorporate stakeholder  concerns and that the overall process does not function as it should. State  and Treasury officials cited numerous examples of disagreements on  procedures and practices. For example:   State and Treasury officials disagree on the use of OTA funding and  contractors. According to Treasury officials, OTA funding should  primarily be used to support intermittent and long-term resident  advisors, who are U.S. contractors, to provide technical assistance.  According to State officials, OTA should supplement State’s program,  which primarily funds current employees of other U.S. agencies.
State, Justice, and Treasury officials disagree on whether it is  appropriate for U.S. contractors to provide assistance in legislative  drafting efforts on anti-money laundering and counter-terrorism  financing laws. State officials cited NSC guidance that current Justice  employees should be primarily responsible for working with foreign  countries to assist in drafting such laws and voiced strong resistance to  use of contractors. Justice officials strongly stated that contractors  should not assist in drafting laws and gave several examples of past  problems when USAID and OTA contractor assistance led to problems  with the development of foreign laws. In two examples, Justice officials  stated that USAID and OTA contractor work did not result in laws  meeting FATF standards. In another example, Justice officials reported  that a USAID contractor assisted in drafting an anti-money laundering  law that had substantial deficiencies and as a result Justice officials had  to take over the drafting process. According to OTA officials, their  contractors provide assistance in drafting laws in non-priority countries  and OTA makes drafts available to Justice and other U.S. agencies for  review and comment and ultimately the host country itself is  responsible for final passage of a law that meets international  standards.
Treasury and State officials disagree on the use of confidentiality  agreements between contractors and the foreign officials they advise.  State officials said OTA’s use of confidentiality agreements impedes U.S.  interagency coordination. State officials said the issue created a  coordination problem in one country because a poorly written draft law  could not be shared with other U.S. agencies for review and resulted in  the development of an ineffective anti-money laundering law. Moreover,  State officials said the continued practice could present future  challenges. However, according to Treasury officials, this was an  isolated case involving a problem with the contract and they said they  have taken procedural steps to ensure the error is not repeated.
State and Treasury officials disagree on the procedures for conducting  assessments of country’s needs for training and technical assistance.  Moreover, Treasury stated that their major concern is with State’s  coordination process for the delivery and timing of assistance.  According to TFWG procedures for priority countries, if an assessment  trip is determined to be necessary, State is to lead and determine the  composition of the teams and set the travel dates. This is complicated  when a vulnerable country becomes a priority country. For example, in  November 2004 Treasury conducted an OTA financial assessment in a  nonpriority frontline country and subsequently reached agreement with  that country’s central bank minister to put a resident advisor in place to  set up a FIU. However, in May 2005, State officials denied clearance for  Treasury official’s visit to the country, which has created a delay of 2.5  months (as of the end of July 2005). Treasury officials provided  documentation to show that State was aware of their intention to visit  the country in November 2004 to determine counter-terrorism and  financial intelligence technical assistance needs, the official leading the  segment of work was part of a larger on-going OTA effort in country, and  that Treasury kept TFWG informed of the results of OTA’s work and  continuing efforts. State officials expressed concern that the country  had recently become a priority country. According to State TFWG  officials, Treasury work needed to be delayed until a TFWG assessment  could be completed. However, the U.S. embassy requested that Treasury  proceed with its placement of a resident advisor and that the TFWG  assessment be delayed.
section_title: U.S. Effort Does Not Strategically Align Resources with Need
paragraphs: The U.S. government does not strategically align its resources with its  mission to deliver counter-terrorism financing training and technical  assistance. For strategic planning to be a dynamic and inclusive process,  alignment of resources is a critical element. However, the U.S.  government has no clear presentation of its available resources. Further,  neither the U.S. government nor TFWG has made a systematic and  objective assessment of the full range of available U.S. and potential  international resources. As a result, decision-makers do not know the full  range of resources available to match to the needs they have identified in  priority countries and to determine the best match of remaining resources  to needs for other vulnerable countries.
subsections: section_title: U.S. Government Does Not Have Clear Presentation of Budget Resources Available
paragraphs: Because funding is embedded with anti-money laundering and other  programs, the U.S. government does not have a clear presentation of the  budget resources that the departments of State and the Treasury allocate  for training and technical assistance to counter terrorist financing. State  and Treasury receive separate appropriations that can be used for training  and technical assistance either by the agencies themselves, by funding  other agencies, or by funding contractors. State primarily transmits its  training and technical assistance funds to other agencies while Treasury  primarily employs short and long term advisors through personal service  contracts. Although various officials told us that funding for counter- terrorism financing training and technical assistance is insufficient, the  lack of a clear presentation of available budget resources makes it difficult  for decision-makers to determine the actual amount allocated to these  efforts.
State officials told us that they have two primary funding sources for State  counter-terrorism financing training and technical assistance programs:  Non-Proliferation, Anti-Terrorism, Demining, and Related Programs  funding, which State’s Office of the Coordinator for Counterterrorism  uses to provide counter-terrorism financing training and technical  assistance to TFWG countries. Based on our analysis of State records,  budget authority for this account included $17.5 million for counter- terrorism financing training and technical assistance for fiscal years  2002 to 2005.
International Narcotics Control and Law Enforcement funding, which  State’s Bureau of International Narcotics Control and Law Enforcement  uses to provide counter-terrorism financing and anti-money laundering  training and technical assistance to a wide range of countries, including  seven priority countries between fiscal years 2002 and 2005, as well to  provide general support to multilateral and regional programs. Based on  our analysis of State records, budget authority for this account included  about $9.3 million for anti-money laundering, counter-terrorism  financing, and related multilateral and regional activities for fiscal years  2002-2005.
State officials also told us that other State bureaus and offices provide  counter-terrorism financing and anti-money laundering training and  technical assistance (e.g., single-course offerings or small-dollar programs)  as part of regional, country-specific, or broad-based programs.
Treasury officials told us that OTA’s counter-terrorism financing technical  assistance is funded through its Financial Enforcement program. Based on  our analysis of Treasury records, Treasury OTA received budget authority  totaling about $30.3 million for all financial enforcement programs for  fiscal years 2002 to 2005. Counter-terrorism financing technical assistance  and training funding is embedded within this program and cannot be  segregated from anti-money laundering and other anti-financial crime  technical assistance. One OTA official told us that as much as one third of  the funds may be spent on programs countering financial crimes other than  terrorist financing in any given year.
section_title: U.S. Government Does Not Have a Systematic and Objective Assessment of Suitability of Available U.S. Resources to Meet Needs
paragraphs: The U.S. government, including the TFWG, has not made a systematic and  objective assessment of the suitability of available resources. According to  State and Treasury officials, no systematic analysis has been done to  evaluate the effectiveness of contractors and current employees in  delivering various types of counter-terrorism training and technical  assistance. Decisions at TFWG appear to be made based on anecdotal  information rather than transparent and systematic assessments of  resources. According to the State Performance and Accountability Report  for fiscal year 2004, a shortage of anti-money laundering experts continues  to create bottlenecks in meeting assistance needs of requesting nations,  including priority countries. State co-chairs of TFWG repeated this concern  to us. According to State officials, U.S. technical experts are particularly  stretched because of their frequent need to split their time between  assessment, training, and investigative missions. Moreover, officials from  State’s Office of the Coordinator for Counterterrorism cited the lack of  available staff as a reason for their slow start in disbursing funding at  TFWG’s inception.
Treasury agrees with State that there may be a shortage of anti-money  laundering experts in the U.S. government agencies who are available to  provide technical assistance in foreign countries, however, according to  Treasury there is not a shortage of U.S. experts who are recent retirees  from the same U.S. government agencies. According to OTA officials, OTA  can provide contractors, who are primarily recently retired U.S.  government employees with years of experience from the same agencies  that provide training to priority countries through State funding. However,  State officials stated strong opinions that current U.S. government  employees are better qualified to provide counter-terrorism financing  training and assistance than contractors. State added that it is TFWG’s  policy that current U.S. government experts should be used whenever  possible, and that, when they are not available, the use of contractors in  those instances should be coordinated with the expert agency or office.  State officials cited several examples of priority and non-priority countries  in which they felt that the work of OTA’s resident advisors did not result in  improvements. However, State officials praised the work of one OTA  resident advisor in a priority country as a best practice, and other agency  and foreign officials supported this view. Further, one State official  commended the quality of OTA’s law enforcement technical assistance.  Nonetheless, State officials repeatedly stated that they need OTA funding  and not OTA-contracted staff to meet current and future needs.
A senior OTA official said that OTA has sought actively to provide programs  in more priority countries, but State, as chair of the TFWG, has not  supported their efforts. Specifically, as a portion of funds that OTA has  obligated for financial enforcement related assistance between fiscal years  2002 and 2005, OTA has obligated approximately 11 percent to priority  countries. State officials said that they welcomed more OTA participation  in priority countries as part of the mix of applicable resources; however,  they questioned whether OTA consistently provides high-quality assistance.  Without a systematic assessment of the suitability of resources, the  decision-makers do not have good information to consider when  determining the best mix of government employees and contractors to  meet needs.
section_title: TFWG Has Not Made a Systematic and Objective Assessment of Potential International Resources to Meet Needs
paragraphs: TFWG has a stated goal to encourage allies and international entities to  contribute resources to help build the counter-terrorism financing  capabilities of vulnerable countries and coordinate training and technical  assistance activities, but it has not developed a specific strategy to do so.  No one office or organization has systematically consolidated and  synthesized available information on the counter-terrorism financing  training and technical assistance activities of other countries and  international entities and integrated this information into its decision- making process. State and Treasury officials stated that instead they have  an ad hoc approach to working with allies and international entities on  resource sharing for training and technical assistance. Resource sharing is  not considered a priority at TFWG meetings because U.S. officials state  that interagency issues take higher priority and little time is left to discuss  international activities. At one TFWG meeting, U.S. agency officials  discovered that different countries and organizations were putting  resources into a priority country without any central coordination. TFWG  found that Australia was already providing assistance to the FIU in this  priority country and cancelled the assistance it was planning to provide in  this area. Without a systematic way to consolidate, synthesize, and  integrate information about international activities into the U.S.  interagency decision-making process, the U.S. government cannot easily  capitalize on opportunities for resource sharing with allies and  international entities.
section_title: U.S. Government Lacks System to Measure Performance and Incorporate Results
paragraphs: The U.S. government, including TFWG, does not have a system in place to  measure the performance results of its efforts to deliver training and  technical assistance and to incorporate this information into integrated  planning efforts. Without such a system the U.S. government cannot ensure  that its efforts are on track. In August 2004, we found no system in place to  measure the performance of U.S. training and technical assistance to  combat terrorist financing. According to an official from Justice’s Office of  Overseas Prosecutorial Development, Assistance and Training (OPDAT),  an interagency committee led by OPDAT was set up to develop a system to  measure results. In November 2004, OPDAT had an intern set up a database  to track training and technical assistance provided through TFWG and  related assistance results for priority countries. Because the database was  not accessible to all TFWG members, OPDAT planned to serve as the focal  point for entering the data collected by TFWG members.
OPDAT asked agencies to provide statistics on programs, funding, and  other information, including responding to questions concerning results by  function which corresponded to the five elements of an effective counter- terrorism financing regime. OPDAT also planned to track key  recommendations for training and technical assistance and progress made  in priority countries as provided in FATF and TFWG assessments.  However, little progress has been made in further development of the  performance measures as the responsible OPDAT official told us they were  waiting to hire the next intern to input the data. As of July 2005, a year later,  at our exit meetings with OPDAT and the State TFWG chairs, OPDAT was  still waiting for an intern to be hired to complete the project. Further,  OPDAT and State officials confirmed that the system had not yet been  approved or implemented by TFWG and, therefore, TFWG did not have a  system in place to measure the performance results of its training and  technical assistance efforts and incorporate this information into its  planning.
section_title: Treasury Faces Two Accountability Issues Related to Its Terrorist Asset Blocking Efforts
paragraphs: Treasury faces two accountability issues related to its terrorist asset  blocking efforts. First, Treasury’s OFAC reports on the nature and extent of  terrorists’ U.S. assets do not provide Congress the ability to assess OFAC’s  achievements. Second, Treasury lacks meaningful performance measures  to assess its terrorist designation and asset blocking efforts. While Treasury  has developed some limited performance measures, OFAC officials  acknowledged that the measures could be improved and are in the process  of developing more meaningful performance measures aided by the  development of an OFAC-specific strategic plan.
subsections: section_title: Treasury Reports Do Not Provide a Clear Explanation of the Nature and Extent of Asset Blocking
paragraphs: Treasury’s annual reports to Congress on terrorists’ assets do not provide a  clear description of the nature and extent of terrorists’ assets held in the  United States. Federal law requires the Secretary of the Treasury, in  consultation with the Attorney General and appropriate investigative  agencies, to provide an annual report to Congress “describing the nature  and extent of assets held in the United States by terrorist countries and  organizations engaged in international terrorism.” Each year Treasury’s  OFAC provides Congress with a Terrorist Assets Report that offers a year- end snapshot of dollar amounts held in U.S. jurisdiction for two types of  entities: international terrorists and terrorist organizations and terrorism- supporting governments and regimes. In 2004 OFAC reported that the  United States blocked almost $10 million in assets belonging to seven  international terrorist organizations and related designees. The 2004  report also noted that the United States held more than $1.6 billion in  assets belonging to six designated state sponsors of terrorism.
While each annual report provides year-end statistics for each of the  different entities, they do not provide a clear description of the nature and  extent of assets held in the United States. The reports do not make a  comparison of blocked assets over the years or offer explanations for many  of the significant shifts between years. For example, the 2004 report  stated that the United States held $3.9 million in al Qaeda assets, but it did  not state that this represented a 400 percent increase in the value of al  Qaeda assets held by the United State in 2003 or offer an explanation for  this increase. In addition, the reports for years 2000 to 2004 offer no  explanation for the decline in the value of U.S.-held Iranian government  assets, which decreased from $347.5 million in 2000 to $82 million in 2004.  While the 2000 report showed that the U.S. blocked $283,000 of Hizballah  assets, future reports did not name Hizballah again or explain the status of  these blocked assets. Senior OFAC officials acknowledge that the Terrorist  Asset Reports do not provide a clear description of the nature and extent of  assets blocked and is not useful to assessing progress on asset blocking.
section_title: Treasury’s Performance Measures Do Not Adequately Assess Terrorist Designation and Asset Blocking Efforts
paragraphs: Treasury lacks effective performance measures to assess its terrorist  designation and asset blocking efforts and demonstrate how these efforts  contribute to Treasury’s goals of disrupting and dismantling terrorist  financial infrastructures and executing the nation’s financial sanctions  policies. Among the performance measures in Treasury’s 2004 Performance  and Accountability Report that are related to designations and asset  blocking are:   An increase in the number of terrorist finance designations for which  other countries join the United States,  An increase in the number of drug trafficking and terrorist-related  financial sanctions targets identified and made public, and  An estimated number of sanctioned entities no longer receiving funds  from the United States.
Treasury officials recognize that these measures do not adequately assess  progress made in designating terrorists and blocking their assets. In  addition, they note that these measures do not help assess how efforts to  designate terrorists and block their assets contribute to Treasury’s overall  goals of disrupting and dismantling terrorists’ financial infrastructure and  executing the nation’s financial sanctions policies. First, these measures  are not specific to terrorist financing. Two of the three measures do not  separate data on terrorists from data on other entities such as drug  traffickers, hostile foreign governments, corrupt regimes, and foreign drug  cartels, though OFAC officials acknowledged that they could have reported  the data separately. Second, Treasury officials said that progress on asset  blocking cannot simply be measured by totaling an amount of blocked  assets at the end of the year, as the amounts may vary over the year as  assets are blocked and unblocked. Third, Treasury has not developed  measures to track other activities and benefits related to terrorist  designations and asset blocking. For example, according to Treasury  officials, Treasury’s underlying research to identify terrorist entities and  their support systems is used to aid U.S. financial regulators, law  enforcement, and other officials. However, Treasury does not have  measures to track the use of this research when used for other agency  activities, such as law enforcement investigations.
Treasury officials also stated that terrorist designations have a deterrent  value by discouraging further financial support. Measuring effectiveness in  terms of deterrence can be very difficult, in part because the direct impact  on unlawful activity is unknown, and in part because precise metrics are  hard to develop for illegal and clandestine activities. According to Treasury  officials, measuring effectiveness can also be difficult because many of  these efforts run across U.S. government agencies and foreign governments  and are highly sensitive. Treasury’s annual report and strategic plan,  however, do not address the deterrent value of designations or discuss the  difficulties in measuring its effectiveness. According to the Government  Performance and Results Act (GPRA) of 1993, when it is not feasible to  develop a measure for a particular program activity, the executive agency  shall state why it is infeasible or impractical to express a performance goal  for the program activity.
OFAC officials told us that they are in the process of developing better  measures for assessing its efforts related to designations and asset  blocking (both quantitative and qualitative) and achievements made. In  addition, OFAC officials are in the process of developing a strategic plan to  guide OFAC’s efforts. This strategic planning effort will help OFAC develop  measures to assess how their activities, including terrorist designations  and asset blocking, contribute to Treasury’s goals of disrupting and  dismantling the financial infrastructure of terrorists and executing the  nation’s financial sanctions policies. According to GPRA, executive  agency strategic plans should include a comprehensive mission statement,  a set of general goals and objectives and an explanation of how they are to  be achieved, and a description of how performance goals and measures are  related to the general goals and objectives of the program. OFAC officials  said they have initiated efforts to develop an OFAC-specific strategic plan  and performance measures. In their technical comments in response to our  draft report, officials stated that the new performance measures will relate  to OFAC’s research, outreach, and sanctions administration. Additionally,  officials stated that they expect OFAC’s new performance measures to be  completed by December 1, 2005, and its new strategic plan to be completed  by January 1, 2006. However, OFAC officials did not provide us with  documentation to demonstrate that they have established milestones or a  completion date to accomplish these projects.
section_title: Conclusions
paragraphs: Without a strategy that integrates the funding and delivery of training and  technical assistance by State and Treasury’s OTA, the U.S. government will  not maximize the use of its resources in the fight against terrorist financing.  Meanwhile, due to disagreements over leadership and procedures, some  energy and talent of staff are wasted trying to resolve interagency disputes.  By making decisions based on anecdotal and informal information rather  than transparent and systematic assessments, managers cannot effectively  address problems before they grow and become crises. Moreover, given the  scarce expertise available to address counter-terrorism financing, by not  focusing efforts on how all available U.S. and international resources can  be integrated into a U.S. strategy the U.S. government may miss  opportunities to leverage resources. Finally, without dedicating resources  to complete a performance measurement system, the State-led TFWG  effort does not have the information needed for optimal coordination and  planning.
The lack of accountability for Treasury’s designations and asset blocking  program creates uncertainty about the department’s progress and  achievements. U.S. officials with oversight responsibilities need  meaningful and relevant information to ascertain the progress,  achievements, and weaknesses of U.S. efforts to designate terrorists and  dismantle their financial networks as well as hold managers accountable.  Meaningful information may also help these officials understand the  importance of asset blocking in the overall U.S. effort to combat terrorist  financing as well as make resource allocation decisions across programs.  The development of a strategic plan for OFAC could help facilitate the  development of meaningful performance measures.
section_title: Recommendations for Executive Action
paragraphs: To ensure that U.S. government interagency efforts to provide counter- terrorism financing training and technical assistance are integrated and  efficient, particularly with respect to priority countries, we recommend  that the Secretary of State and the Secretary of the Treasury, in  consultation with NSC and relevant government agencies, develop and  implement an integrated strategic plan for the U.S. government that does  the following:  designates leadership and provides for stakeholder involvement;  includes a systematic and transparent assessment of U.S. government   delineates a method for aligning the resources of relevant U.S. agencies  to support the mission; and  provides processes and resources for measuring and monitoring results,  identifying gaps, and revising strategies accordingly.
To ensure a seamless campaign in providing counter-terrorism financing  training and technical assistance programs to vulnerable countries, we  recommend that the Secretaries of State and the Treasury enter into a  Memorandum of Agreement concerning counter-terrorism financing and  anti-money laundering training and technical assistance. The agreement  should specify:  the roles of each department, bureau, and office with respect to  conducting needs assessments and delivering training and technical  assistance;   methods to resolve disputes concerning OTA’s use of confidentiality  agreements in its contracts when providing counter-terrorism financing  and anti-money laundering assistance; and  coordination of funding and resources for counter-terrorism financing  and anti-money laundering training and technical assistance.
To ensure that policy makers and program managers are able to examine  the overall achievements of U.S. efforts to block terrorists’ assets, we also  recommend that the Secretary of the Treasury provide in its annual  Terrorist Assets Report to Congress more complete information on the  nature and extent of asset blocking in the United States. Specifically, the  report should include such information as the differences in amounts  blocked between the years, when and why assets were unfrozen, the  achievements and obstacles faced by the U.S. government, and a classified  annex if necessary. In addition, as part of the Treasury’s ongoing strategic  planning efforts, we recommend that the Secretary of the Treasury  complete efforts to develop an OFAC-specific strategic plan and  meaningful performance measures by January 1, 2006, and December 1,  2005 respectively, to guide and assess its asset blocking efforts.
section_title: Matter for Congressional Consideration
paragraphs: In view of congressional interest in U.S. government efforts to deliver  training and technical assistance abroad to combat terrorist financing and  the difficulty in obtaining a systematic assessment of U.S. resources  dedicated to this endeavor, Congress should consider requiring the  Secretary of State and the Secretary of the Treasury to submit an annual  report to Congress on the status of the development and implementation of  the integrated strategic plan and Memorandum of Agreement.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided draft copies of this report to the Departments of Defense,  Homeland Security, Justice, State, and Treasury for review. We received  comments from the Departments of Justice, State, and the Treasury (see  apps. V, VI, and VII). We did not receive agency comments from the  Departments of Defense or Homeland Security.
State did not agree with our recommendation that the Secretaries of State  and Treasury, in consultation with the NSC and relevant government  agencies, develop and implement an integrated strategic plan to coordinate  the delivery of training and technical assistance abroad. State asserted that  it has an integrated strategic plan and believes that a series of NSC  documents and State’s Office of the Coordinator for Counterterrorism’s  Bureau Performance Plan serve this purpose. We reviewed the NSC  documentation which included minutes, an agreement, and conclusions, all  of which serve as the NSC guidance for the TFWG. We also reviewed State’s  Office of the Coordinator for Counterterrorism’s Bureau Performance Plan  which we found included the Bureau’s objectives and performance  measures for counterterrorist financing programs. We do not agree that  this NSC guidance and Bureau performance plan constitute an integrated  strategy that addresses the issues raised in this report because the effort, in  practice, does not have key stakeholder buy-in on roles and practices, a  strategic alignment of resources with needs, or a system to measure  performance and use results and thus, an integrated strategy is still needed.  It is also noteworthy that Treasury did not state in their comments that an  integrated strategic plan existed or was in place, and they did not highlight  these specific documents as serving this purpose.
Treasury did not directly address our recommendation for an integrated  strategic plan and proposed a new title, “Integrated U.S. Strategic Plan  Needed to Improve the Coordination of Counterterrorism Finance Training  and Technical Assistance to Certain Priority Countries,” which suggests  agreement with the recommendation, but limits coverage of the integrated  strategic plan to cover certain priority countries. Treasury also stated its  agreement with the need for performance measures. It is useful to note that  Treasury repeatedly placed the focus of efforts for improvement on priority  countries and, as noted in its technical comments, does not recognize  State’s leadership over the delivery of training and technical assistance  other than to priority countries. For example, in Treasury’s technical  comments Treasury stated that “State’s role is coordinating each U.S.  government agency’s personnel and expertise to allow them to deliver the  needed training in commonly agreed upon priority countries.” This  comment further supports the need to better integrate efforts. Justice  stated that with its role and expertise in providing training and technical  assistance the fact that it was not included as an equal partner with State  and Treasury in the recommendation was a critical omission. We note that  Justice is one of a number of agencies referred to as relevant government  agencies in the recommendation. Justice receives funding from State and,  according to Justice, State has been supportive of Justice’s training and  technical assistance efforts.
State did not agree with our recommendation that the Secretaries of State  and Treasury enter into a Memorandum of Agreement concerning counter- terrorism financing and anti-money laundering training and technical  assistance. State stated that they have an interagency agreement. Based on  our review, the classified document serving as an interagency agreement  lacks clarity, familiarity, and buy-in from all levels of leadership within  TFWG, particularly Treasury. State added that if there were to be a  Memorandum of Agreement, they believe it should include all agencies  engaged in providing training and technical assistance, not just State and  Treasury. Treasury did not address this recommendation. However,  Treasury stated that it wished to improve the effectiveness of U.S. technical  assistance to combat terrorist financing particularly with respect to certain  priority countries and stated that they would welcome suggestions as to  how Treasury, together with relevant U.S. government agencies, can better  achieve that goal. Justice again stated that the report’s critical flaw is  omitting Justice from equal standing with State and Treasury. Justice noted  that it is a key player and therefore should be involved in all interagency  deliberations and decisions. We continue to believe that the Memorandum  of Agreement should include the Secretaries of State and Treasury. State  and Treasury both primarily fund and support U.S. government anti-money  laundering and counter-terrorist financing training and technical assistance  programs, and in Treasury’s case also provides considerable training and  technical assistance abroad through current U.S. government employees  and contractors. It is important that their programs and funding are  integrated to optimize results. Other agencies are important stakeholders  as they are recipients of this funding and support and should benefit from  improved coordination between these two agencies.
In response to our recommendation that the Secretary of the Treasury  provide more complete information on the nature and extent of asset  blocking in the United States in its annual Terrorist Assets Report to  Congress, Treasury responded in its technical comments that we should  “instead recommend that Congress consider discontinuing the requirement  that Treasury produce the annual report altogether.” Treasury officials also  stated that the Terrorist Assets Reports, “based upon the input of  numerous government agencies, provides a snapshot of the known assets  held in the United States by terrorist-supporting countries and terrorist  groups at a given point in time. These numbers may fluctuate during each  year and between years for a number of policy-permissible reasons. The  amount of assets blocked under a terrorism sanctions program is not a  primary measure of a terrorism sanctions program’s effectiveness, and  countries that have been declared terrorist supporting, and whose assets  are not blocked by a sanctions program, are already weary of holding  assets in the United States.” Moreover, in its technical comments Treasury  states that Terrorist Assets Reports were “not mandated or designed as an  accountability measure for OFAC’s effectiveness in assisting U.S. persons  in identifying and blocking assets of persons designated under relevant  Executive orders relating to terrorism.” We acknowledge that the language  in the mandate for the Terrorist Assets Reports did not explicitly designate  the reports as an accountability measure; however, nothing in the statutory  language or in the congressional intent underlying the mandate precludes  Treasury from compiling and reporting information in the manner in which  we have suggested in this report. Furthermore, we believe that inclusion of  comparative information and additional explanation regarding significant  shifts between years will enhance program reporting and congressional  oversight. Justice did not comment on this recommendation. State  commented that this recommendation was incomplete in that it makes no  mention of State’s role in blocking assets and promoting international  cooperation to achieve it; however, we did not include State in this  recommendation because it is the Secretary of the Treasury who is  responsible for producing the annual Terrorist Assets Reports.
Treasury’s technical comments state that “OFAC officials have advised that  OFAC’s new performance measures are expected to be completed by  December 1, 2005, and its new strategic plan is expected to be completed  by January 1, 2006.” We modified our recommendation to incorporate this  new information. State suggested in its technical comments that we revise  this recommendation to read, “In addition, we recommend that the  Secretary of the Treasury, in consultation with the Departments of State  and Justice and the other departments and agencies represented on the  Terrorist Finance Policy Coordination Committee, establish milestones for  developing a strategic plan and meaningful performance measures to guide  and asses its asset blocking process.” We did not include the Secretary of  State or the Attorney General in this recommendation because the scope of  this objective focused solely on the accountability issues Treasury faces in  its efforts to block terrorists’ assets. However, we recognize that State has  an important role in targeting individuals, groups, or other entities  suspected of terrorism or terrorist financing and added language to the  section of the report on terrorist designations to clarify the roles of the  multiple agencies involved in this effort.
Treasury’s comments also suggested that we replace, in its entirety, our  report’s third objective on the accountability of Treasury’s terrorist asset  blocking efforts with revised text that Treasury officials had prepared. We  reviewed the revised text and noted that many of Treasury’s points were  already covered in our report. In some cases we added technical  information to our report to help clarify the challenges that Treasury faces  in assessing the impact of terrorist designation activities.
None of these agencies provided comments on our matter for  congressional consideration.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Attorney General, the  Secretary of Defense, the Secretary of the Homeland Security, the  Secretary of State, the Secretary of the Treasury, and interested  congressional committees. We also will make copies available to others  upon request. In addition the report will be available at no charge on the  GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-4347 or yagerl@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix VIII.
section_title: Objectives, Scope, and Methodology
paragraphs: Chairman of the Senate Caucus on International Narcotics Control, Charles  E. Grassley; Senator Richard J. Durbin; and Chairman of the Senate  Committee on Homeland Security and Governmental Affairs, Senator  Susan M. Collins, asked us to (1) provide an overview of U.S. government  efforts to combat terrorist financing abroad and (2) examine U.S.  government efforts to coordinate the delivery of training and technical  assistance to vulnerable countries. In addition, they requested that we  examine specific accountability issues the Department of the Treasury  (Treasury) faces in its efforts to block terrorists’ assets held under U.S.  jurisdiction.
To provide an overview of U.S. government efforts to combat terrorist  financing abroad we reviewed documents and interviewed officials of U.S.  agencies and departments and their bureaus and offices. We reviewed  legislation, strategic plans, performance plans, and other agency  documents, as well as relevant papers, studies, CRS and our own work to  identify specific agency responsibilities and objectives. We assessed this  information to identify key efforts and obtain further details and  clarification and then validated and deconflicted information across  agencies and departments in the United States and overseas in Indonesia,  Pakistan, and Paraguay. We based country selection on Department of  State (State) reporting of a nexus of terrorist financing, State reporting of  assistance to the country, and the use of alternative financing mechanisms  in the country. In each country, we discussed key challenges with  responsible foreign and U.S. embassy officials, as well as with international  entity officials.
We grouped the different types of responsibilities into four categories  (designations, intelligence and law enforcement, standards setting, or  training) and validated these categories during meetings with U.S.  government officials. Our scope and methodology were limited by lack of  complete access to sensitive and classified information. We reviewed  documents or interviewed officials from the following U.S. departments  and agencies:  the Central Intelligence Agency;  the Department of Defense (Defense Intelligence Agency);  the Department of Homeland Security (Immigration and Customs  Enforcement and Customs and Border Protection);  the Department of Justice (Bureau of Alcohol, Tobacco, Firearms, and  Explosives; Criminal Division’s Asset Forfeiture and Money Laundering  Section, Counter Terrorism Section, and Office of Overseas  Prosecutorial Development, Assistance and Training; Drug Enforcement  Administration; Federal Bureau of Investigation);  the Department of State (Bureau of Economic and Business Affairs;  Bureau for International Narcotics and Law Enforcement Affairs; Office  of the Coordinator for Counterterrorism; Bureau of International  Organizations; U.S. Mission to the United Nations; U.S. Agency for  International Development; U.S. Missions to Indonesia, Pakistan, and  Paraguay);  the Department of the Treasury (Office of Technical Assistance, Office  of Foreign Assets Control, Financial Crimes Enforcement Network, the  Office of Terrorist Financing and Financial Crime, IRS’s Criminal  Investigation Division).
We also verified U.S. government efforts through documentation or  interviews with officials from international entities including the Financial  Action Task Force on Money Laundering, the International Monetary Fund  (IMF), the World Bank, the United Nations (UN), and the Organization of  American States.
To examine U.S. government efforts to coordinate the delivery of training  and technical assistance to vulnerable countries, we examined relevant  laws; reports to Congress; National Security Council (NSC) guidance;  strategic plans; policies and procedures; budget and expenditure  information; agency and international entity training data, documents, and  reports; contractor resumes; communications between embassies and  agencies; interagency communications; web site information; and GAO  criteria for strategic planning, collaboration, and performance results. In  conjunction we interviewed U.S. agency officials involved in the Terrorist  Financing Working Group (TFWG), U.S. officials involved in the delivery of  training and technical assistance abroad, and others with a stake in  counter-terrorism financing training and technical assistance, including  officials of international entities, foreign government officials, and experts.  We also observed a TFWG meeting. We requested an interview with the  NSC, but the NSC declined our request. We assessed U.S. efforts to  coordinate its efforts to deliver training and technical assistance to  vulnerable countries using applicable elements of a sound strategic plan  and identified those areas in which the U.S. effort is lacking.
We assessed documentation and interviewed officials from:  the Department of Homeland Security (Immigration and Customs   the Department of Justice (Criminal Division’s Asset Forfeiture and  Money Laundering Section, Counter Terrorism Section, and Office of  Overseas Prosecutorial Development, Assistance and Training; Federal  Bureau of Investigation);  the Department of State (Bureau for International Narcotics and Law  Enforcement Affairs, Office of the Coordinator for Counter-terrorism,  Bureau of International Organizations, U.S. Mission to the United  Nations, U.S. Agency for International Development; three U.S.  embassies abroad)  the Department of the Treasury (Office of Technical Assistance, Office  of Foreign Assets Control, Financial Crimes Enforcement Network, the  Executive Office for Terrorist Financing and Financial Crime, IRS’s  Criminal Investigation Division);  the Financial Action Task Force on Money Laundering (FATF);  International financial institutions including the International Monetary  Fund (IMF), World Bank, Asian Development Bank (ADB); and Inter- American Development Bank;     the United Nations (UN), including the Counter Terrorism Committee  and relevant UN Security Council resolutions sanctions committees and  monitoring mechanisms; and  the Organization of American States.
To examine specific issues the U.S. government faces in holding Treasury  accountable for its efforts to block terrorists’ assets held in the United  States, we interviewed officials from the Department of the Treasury’s  Office of Foreign Assets Control (OFAC) in Washington, D.C. We reviewed  applicable laws, regulations, and executive orders to determine reporting  requirements. In addition, we examined OFAC’s annual Terrorist Assets  Reports for calendar years 1999 to 2004. Our examination focused on  comparing the nature and extent of blocked assets by year for OFAC’s three  programs targeting international terrorists and terrorist organizations and  five programs targeting terrorism-supporting governments and regimes to  understand how OFAC communicated changes in an organization or  country’s blocked assets over time. We also compared and contrasted the  performance measures for designation and asset blocking included in  Treasury’s Strategic Plan for fiscal years 2003-2008 with those indicated in  its Annual Performance and Accountability Report fiscal years 2003 and  2004. We reviewed testimony and speeches by OFAC and other Treasury  officials, as well as information from OFAC’s website, to learn more about  key issues and progress made on designating terrorists and blocking their  assets. We reviewed relevant information from the Congressional Research  Service and our own work. To assess the extent that Treasury’s  performance measures for designating terrorists and blocking assets  focused on factors critical to assessing performance, we reviewed a range  of our previous reports examining factors that were necessary components  for meaningful measures.
We performed our work from March 2004 through July 2005 in accordance  with generally accepted government auditing standards.
section_title: Key International Counter-Terrorism Financing and Anti-Money Laundering Efforts
subsections: section_title: United Nations (UN): Of the key international entities, the UN has the broadest range of membership and the ability to adopt treaties or international conventions that have the effect of law in a country once signed and ratified, depending on a country’s constitution.
paragraphs: United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic  Substances (1988) (The Vienna Convention):   Defines concept of money laundering.  Most widely accepted definition. Calls upon countries to criminalize the activity. Limited to  drug trafficking as predicate offenseand does not address the preventative aspects.
International Convention Against Transnational Organized Crime (2000) (The Palermo  Convention): Came into force in September 2003. Obligates ratifying countries to  criminalize money laundering via domestic law and include all serious crimes as predicate  offenses of money laundering, whether committed in or outside of the country, and permit  the required criminal knowledge or intent to be inferred from objective facts; establish  regulatory regimes to deter and detect all forms of money laundering, including customer  identification, recordkeeping, and reporting of suspicious transactions; authorize the  cooperation and exchange of information among administrative, regulatory, law  enforcement, and other authorities, both domestically and internationally; consider the  establishment of a financial intelligence unit to collect, analyze, and disseminate information;  and promote international cooperation.
International Convention for the Suppression of the Financing of Terrorism (1999):  Came into force in 2002. Requires ratifying countries to criminalize terrorism, terrorist  organizations, and terrorist acts. Unlawful for any person to provide or collect funds with the  intent that the funds be used for, or knowledge that the funds be used to conduct certain  terrorist activity. Encourages states to implement measures that are consistent with FATF  Recommendations.
Security Council Resolutions 1267 and 1390: Adopted October 15, 1999 and January 16,  2002, respectively. Obligates member states to freeze assets of individuals and entities  associated with Osama bin Ladin or members of al Qaeda or the Taliban that are included  on the consolidated list maintained and regularly updated by the UN 1267 Sanctions  Committee.
Security Council Resolution 1373: Adopted September 28, 2001, in direct response to  events of September 11, 2001. Obligates countries to criminalize actions to finance terrorism  and deny all forms of support, freeze funds or assets of persons, organizations, or entities  involved in terrorist acts; prohibit active or passive assistance to terrorists; and cooperate  with other countries in criminal investigations and sharing information about planned terrorist  acts.
Security Council Resolution 1617: Adopted July 29, 2005. Extended sanctions against al  Qaeda, Osama bin Laden, and the Taliban, and strengthened previous related resolutions.
Convention Against Corruption (2003) Not yet in force--First legally binding multilateral  treaty to address on a global basis the problems relating to corruption. As of July 11, 2005,  29 countries had become parties to the Convention (30 are required for the Convention to  enter into force). Requires parties to institute a comprehensive domestic regulatory and  supervisory regime for banks and financial institutions to deter and detect money laundering.  Regime must emphasize requirements for customer identification, record keeping, and  suspicious transaction reporting.
Global Program Against Money Laundering:  research and assistance project offering  technical expertise, training, and advice to member countries on anti-money laundering and  counter-terrorism financing upon request to raise awareness; help create legal frameworks  with the support of model legislation; develop institutional capacity, in particular with the  creation of financial intelligence units; provide training for legal, judicial, law enforcement,  regulators and private financial sectors including computer-based training; promote regional  approach to addressing problems; maintain strategic relationships; and maintain database  and perform analysis of relevant information.
The Counter Terrorism Committee (CTC):  Established via Security Council  Resolution1373 to monitor the performance of the member countries in building a global  capacity against terrorism. Countries submit a report to the CTC on steps taken to  implement resolution’s measures and report regularly on progress. CTC asked each country  to perform a self-assessment of existing legislation and mechanism to combat terrorism in  relation to Resolution 1373. CTC identifies weaknesses and facilitates assistance, but does  not provide direct assistance.
Financial Action Task Force on Money  Laundering (FATF):  Formed in 1989 by  the G-7 countries, FATF is an  intergovernmental body comprised of 31  member jurisdictions and two regional  organizations whose purpose is to develop  and promote policies, both at the national  and international levels, to combat money  laundering and the financing of terrorism.  Its mission expanded to include counter- terrorism financing in October 2001. FATF  has developed multiple partnerships with  international and regional organizations in  order to constitute a global network of  organizations against money laundering  and terrorist financing.
The 40 Recommendations on Money Laundering: Constitute a comprehensive  framework for anti-money-laundering designed for universal application. Permit country  flexibility in implementing the principles according to the country’s own particular  circumstances and constitutional requirements. Although not binding as law, have been  widely endorsed by international community and relevant organizations as the international  standard for anti-money laundering.
The Special Recommendations on Terrorist Financing:  FATF adopted eight special  recommendations and recently added a ninth. FATF members use a self-assessment  questionnaire of their country’s actions to come into compliance. The nine deal with both  formal banking and non-banking systems:  Ratification and implementation of UN instruments Criminalize the financing of terrorism and associated money laundering Freeze and confiscate terrorist assets Reporting suspicious transactions related to terrorism International co-operation Impose anti-money laundering requirements on alternative remittance systems   Strengthen customer identification measures in international and domestic wire transfers Ensure that non-profit organizations are not misused  Detecting and preventing cross-border transportation of cash by terrorists and other  criminals.
The Non-Cooperative Countries and Territories (NCCT) List:  One of FATF’s objectives  is to promote the adoption of international anti-money laundering/counter-terrorism financing  standards by all countries. Thus, its mission extends beyond its own membership, although  FATF can only sanction its member countries and territories. Thus, in order to encourage all  countries to adopt measures to prevent, detect, and prosecute money launderers (i.e., to  implement the 40 Recommendations) FATF adopted a process to identify non-cooperative  countries and territories that serve as obstacles to international cooperation in this area and  place them on a public list. An NCCT country is encouraged to make rapid progress in  remedying its deficiencies or counter-measures may be imposed which may include specific  actions by FATF member countries. Most countries make a concerted effort to be taken off  the NCCT list because it causes significant problems to their international business and  reputation.
Monitoring Member’s Progress:  Facilitated by a two-stage process: self assessments and  mutual evaluations. In the self-assessment stage, each member annually responds to a  standard questionnaire regarding its implementation of the recommendations. In the mutual  evaluation stage, each member is examined and assessed by experts from other member  countries. Ultimately, if a member country does not take steps to achieve compliance,  membership in the organization can be suspended. There is, however, a sense of peer  pressure and a process of graduated steps before these sanctions are enforced.
Methodology for Anti-money laundering/Counter-terrorist Financing Assessments:   FATF developed and adopted a comprehensive mutual assessment methodology for the 40  and special recommendations based on consultations with IMF, World Bank, and other  standard setters, which provides international agreement and cooperation among standard  setters and others for a methodology for assessing anti-money-laundering/counter terrorist- financing regimes based on the 40 and special recommendations.
Typologies Exercise:  FATF issues annual reports on developments in money laundering  through its typologies report, which keeps countries current with new techniques or trends.
International Monetary Fund (IMF) and  World Bank: World Bank helps countries  strengthen development efforts by  providing loans and technical assistance  for institutional capacity building. The IMF  mission involves financial surveillance and  the promotion of international monetary  stability.
Research and Analysis and Awareness-Raising:  Conducted work  on international  practices in implementing anti-money laundering and counter-terrorist financing regimes;  issued Analysis of the Hawala System discussing implications for regulatory and  supervisory response; and developed comprehensive reference guide on anti-money- laundering/counter terrorist-financing presenting all relevant information in one source.  Conducted Regional Policy Global Dialogue series with country, World Bank and IMF,  development banks, and FATF-style regional bodies covering challenges, lessons learned,  and assistance needed; and developed Country Assistance Strategy that covers anti-money  laundering and counter-terrorism in greater detail in countries that have been deficient in  meeting international standards.
Assessments:  Worked in close collaboration with FATF and FATF-style regional bodies to a  produce single comprehensive  Methodology for anti-money laundering/counter-terrorist  financing assessments; and engaged in a successful pilot program of assessments of  country compliance with FATF recommendations. In 2004, adopted the FATF 40 and special  9 recommendations as one of the 12 standards and codes for which Reports on the  Observance of Standards and Codes can be prepared and made anti-money  laundering/counter-terrorist financing assessments a regular part of IMF/World Bank work.  World Bank and IMF staff participated in 58 of the 92 assessments conducted since 2002.
Training and Technical Assistance:  Organized training conferences and workshops,  delivered technical assistance to individual countries, and coordinated technical assistance.  Substantially increased technical assistance to member countries on strengthening legal,  regulatory, and financial supervisory frameworks for anti-money-laundering/counter terrorist- financing. In 2002-2003 there were 85 country-specific technical projects benefiting 63  countries and 32 projects reaching more than 130 countries. Between January 2004 and  June 2005 the World Bank and IMF delivered an additional 210 projects. In 2004, IMF and  the World Bank decided to expand the anti-money laundering/counter-terrorist financing  technical assistance work to cover the full scope of the expanded FATF recommendations  following the successful pilot program of assessments.
Egmont Group of Financial Intelligence  Units:  A forum for Financial Intelligence  Units (FIU) to improve support for their  respective national anti-money laundering  and counter-terrorism financing programs.  In June 2005 there were 101 member  countries. The group fosters development  of FIUs and the exchange of critical  financial data among the FIUs.
The group is involved in improving interaction among FIUs in the areas of communications,  information sharing, and training coordination. The Egmont Group’s Principles for  Information Exchange Between Financial Intelligence Units for Money Laundering Cases  include conditions for the exchange of information, limitation on permitted uses of  information, and confidentiality. Members of the Egmont Group have access to a secure  private website to exchange information. As of 2004, 87 of the members were connected to  the secure web. The group has produced a compilation of one hundred sanitized cases  about the fight against money laundering from its member FIUs. Within the group there are  five working groups—Legal, Outreach, Training/Communications, Operations, and  Information Technology. The Egmont group is focusing on expanding its membership in the  Africa and Asia regions.
Counterterrorism Action Group (CTAG):   CTAG includes the G-8 (Canada, France,  Germany, Italy, Japan, Russia, the United  Kingdom, and the United States) as well  as other states, mainly donors, to expand  counterterrorism capacity building  assistance.
CTAG goals are to analyze and prioritize needs and expand training and assistance in  critical areas including counter-terrorism financing and other counterterrorism areas. CTAG  also plans to work with the UN Counter-Terrorism Committee to promote implementation of  Security Council Resolution 1373. In 2004, CTAG coordinated with FATF to obtain  assessments of countries CTAG identified as priorities.
FSRBs encourage implementation and enforcement of FATF’s 40 recommendations and  special recommendations. They administer mutual evaluations of their members, which are  intended to identify weaknesses so that the member may take remedial action. They provide  members information about trends, techniques, and other developments for money  laundering in their typology reports. The size, sophistication, and the degree to which the  FSRBs can carry out their missions vary greatly. The FSRBs are Asia/Pacific Group on  Money Laundering, Caribbean Financial Action Task Force, Council of Europe MONEYVAL,  Eastern and Southern African Anti-Money Laundering Group, Eurasian Group on  Combating Money Laundering and Financing of Terrorism, Financial Action Task Force  Against Money Laundering in South America, Middle East and North Africa Financial Action  Task Force, Inter-governmental Action Group Against Money Laundering (West Africa).
Organization of American States— CICAD: Regional body for security and  diplomacy in the Western Hemisphere with  34 member states.
In 2004, the commission amended model regulations for the hemisphere to include  techniques to combat terrorist financing, development of a variety of associated training  initiatives, and a number of anti-money laundering/counter-terrorism meetings. Its Mutual  Evaluation Mechanism included updating and revising some 80 questionnaire indicators  through which the countries mutually evaluate regional efforts and projects. Worked with  International Development Bank and France to provide training for prosecutors and judges.  Based on agreement with Inter-American Development Bank for nearly $2 million,  conducting two-year project to strengthen FIUs in eight countries. Evaluating strategic plans  and advising on technical design for FIUs in region.
Asian Development Bank (ADB):  Established in 1966, the ADB is a  multilateral development finance institution  dedicated to reducing poverty in Asia and  the Pacific. The bank is owned by 63  members, mostly from the region and  engages in mostly public sector lending in  its developing member countries.
According to the ADB, it was one of the first multilateral development banks to address the  money laundering problem, directly and indirectly, through regional and country assistance  programs. The ADB Policy Paper, adopted on April 1, 2003, has three key elements: (1)  assisting developing member countries in establishing and implementing effective legal and  institutional systems for anti-money laundering and counter-terrorism financing, (2)  increasing collaboration with other international organizations and aid agencies, and (3)  strengthening internal controls to safeguard ADB's funds. The bank provides loans and  technical assistance for a broad range of development activities including strengthening and  developing anti-money laundering regimes.
Basel Committee on Banking  Supervision:  Established by the central  bank Governors of the Group of Ten  countries in 1974, formulates broad  supervisory standards and guidelines and  recommends statements of best practice  in the expectation that individual  authorities will take steps to implement  them through detailed arrangements -  statutory or otherwise - which are best  suited to their own national systems.
Three of the Basel Committee’s supervisory standards and guidelines concern money  laundering issues: (1) Statement on Prevention of Criminal Use of the Banking System for  the purpose of Money Laundering (1988), which outlines basic policies and procedures that  bank managers should ensure are in place; (2) Core Principles for Effective Banking  Supervision (1997), which provides a comprehensive blueprint for an effective bank  supervisory system and covers a wide range of topics including money laundering; and (3)  Customer Due Diligence (2001), which also strongly supports adoption and implementation  of the FATF recommendations.
Anti-Money Laundering Guidance Notes for Insurance Supervisors and Insurance Entities  (2002) is a comprehensive discussion on money laundering in the context of the insurance  industry. Guidance is intended to be implemented by individual countries taking into account  the particular insurance companies involved, the products offered within the country, and the  country’s own financial system. Consistent with FATF 40 Recommendations and Basel Core  Principles for Effective Banking Supervision. Paper was updated as Guidance Paper on Anti- Money Laundering and Combating the Financing of Terrorism (2004) with cases of money  laundering and terrorist financing. A document based upon these cases is posted on Web  site and updated, and new cases that might result from the FATF typology project are to be  added.
International Organization of Securities  Commissions (IOSCO):  Members  regulate and administer securities and  laws in their respective 105 national  securities commissions. Core objectives  are to protect investors; ensure that  markets are fair, efficient, and transparent;  and reduce systematic risk.
Passed “Resolution on Money Laundering” in 1992. Principles on Client Identification and  Beneficial Ownership for the Securities Industry (2004) is a comprehensive framework  relating to customer due diligence requirements and complementing the FATF 40  recommendations. IOSCO and FATF have discussed further steps to strengthen  cooperation among FIUs and securities regulators in order to combat money laundering and  terrorist financing. laundering.
Kingdom, and the United States.
section_title: Terrorist Financing Working Group Membership and Program Development Process
paragraphs: According to the State, TFWG is made up of various agencies throughout  the U.S. government and convened in October 2001 to develop and provide  counter-terrorism finance training to countries deemed most vulnerable to  terrorist financing. TFWG is co-chaired by State’s Office of the Coordinator  for Counterterrorism and the Bureau for International Narcotics and Law  Enforcement Affairs and meets on a bi-weekly basis to receive intelligence  briefings, schedule assessment trips, review assessment reports, and  discuss the development and implementation of technical assistance and  training programs.
subsections: section_title: TFWG Membership
subsections: section_title: Department of State
section_title: Department of the Treasury
section_title: Department of Justice
section_title: Department of Homeland Security
section_title: Other Participants
section_title: TFWG Program Development Process
paragraphs: According to State the process is as follows: 1. With input from the intelligence and law enforcement communities,  State, Treasury, and the Department of Justice (Justice), identify and  prioritize countries needing the most assistance to deal with terrorist  financing.  2. Evaluate priority countries’ counter-terrorism finance and anti-money  laundering regimes with Financial Systems Assessment Team (FSAT)  onsite visits or Washington tabletop exercises. State-led FSAT teams of  6-8 members include technical experts from State, Treasury, Justice,  and other regulatory and law enforcement agencies. The FSAT onsite  visits take about one week and include in-depth meetings with host  government financial regulatory agencies, the judiciary, law  enforcement agencies, the private financial services sector, and non- governmental organizations.  3. Prepare a formal assessment report on vulnerabilities to terrorist  financing and make recommendations for training and technical  assistance to address these weaknesses. The formal report is shared  with the host government to gauge its receptivity and to coordinate U.S.  offers of assistance.  4. Develop counter-terrorism financing training implementation plan  based on FSAT recommendations. Counter-terrorism financing  assistance programs include  financial investigative training to “follow  the money,” financial regulatory training to detect and analyze  suspicious transactions, judicial and prosecutorial training to build  financial crime cases, financial intelligence unit development, and  trade-based money laundering for over/under invoicing schemes for  money laundering or terrorist financing.  5. Provide sequenced training and technical assistance to priority  countries in-country, regionally, or in the United States.  6. Encourage burden sharing with our allies, international financial  institutions (e.g., IMF, World Bank, regional development banks), and  through international organizations such as the UN, United Nations, the  UN Counterterrorism Committee, FATF on Money Laundering, or the  Group of Eight (G-8) to capitalize on and maximize international efforts  to strengthen counter-terrorism finance regimes around the world.
section_title: Key U.S. Counter-Terrorism Financing and Anti-Money Laundering Training and Technical Assistance for Vulnerable Countries
paragraphs: International Law Enforcement Academies (ILEAs). Regional academies led by  U.S. agencies partnering with foreign governments to provide law enforcement  training including anti-money laundering and counter-terrorism financing. ILEAs in  Gaborone, Botswana; Bangkok, Thailand; Budapest, Hungary; and Roswell, New  Mexico, train over 2,300 participants annually on topics such as criminal  investigations, international banking and money laundering, drug-trafficking, human  smuggling, and cyber-crime.
Provides financial regulatory training and technical assistance to central banks,  foreign banking supervisors, and law enforcement officials in Washington, D.C. and  abroad, and participates in U.S. interagency assessments of foreign government  vulnerabilities.
Provides financial regulatory training through seminars and regional conference  presentations in Washington, D.C. and abroad, and participates in U.S. interagency  assessments of foreign government vulnerabilities.
Provides law and border enforcement training and technical assistance to foreign  governments, in conjunction with other U.S. law enforcement agencies and the  ILEAs. Participates in assessments of foreign countries in the law and border  enforcement arena.
Assists in the drafting of money laundering, terrorist financing, and asset forfeiture  legislation compliant with international standards for international and regional  bodies and foreign governments. Provides legal training and technical assistance  to foreign prosecutors and judges, in conjunction with Justice’s Office of Overseas  Prosecutorial Development, Training and Assistance. Sponsors conferences and  seminars on transnational financial crimes such as forfeiting the proceeds of  corruption, human trafficking, counterfeiting, and terrorism. Participates in U.S.  interagency assessments of countries’ capacity to block, seize, and forfeit terrorist  and other criminal assets.
Provides investigative and prosecutorial training and technical assistance to foreign  investigators, prosecutors, and judges in conjunction with the Office of Overseas  Prosecutorial Development, Training, and Assistance and other Department of  Justice components.
Provides law enforcement training on international asset forfeiture and anti-money  laundering to foreign governments, in conjunction with other Department of Justice  components and through ILEAs.
Provides basic and advanced law enforcement training to foreign governments on a  bilateral and regional basis and through ILEAs and the Federal Bureau of  Investigation’s Academy in Quantico, Virginia. Developed a two-week terrorist  financing course that was delivered and accepted as the U.S. government’s model.  Participates in U.S. interagency assessments of countries’ law enforcement and  counter-terrorism capabilities.
Provides law enforcement training and technical assistance to foreign counterparts  abroad in conjunction with other Department of Justice components.
Provides legal and prosecutorial training and technical assistance for criminal  justice sector counterparts abroad and through ILEAs in drafting anti-money  laundering and counter-terrorism financing statutes. Provides Resident Legal  Advisors to focus on developing counter-terrorism legislation that criminalizes  terrorist financing and achieves other objectives. Conducts regional conferences on  terrorist financing, including a focus on charitable organizations. Participates in  U.S. interagency assessments to determine countries’ criminal justice system  capabilities.
Coordinate and fund U.S. training and technical assistance provided by other U.S.  agencies to develop or enhance the capacity of a selected group of more than two  dozen countries whose financial sectors have been used to finance terrorism. Also  manage or provide funding for other anti-money laundering or counter-terrorism  financing programs for Department of State, other U.S. agencies, IlEAs,  international entities, and regional bodies. Leads U.S. interagency assessments of  foreign government vulnerabilities.
Provides law enforcement training for foreign counterparts and through ILEAs to  develop the skills necessary to investigate financial crimes.
Provides legal technical assistance to foreign governments by drafting legislation  that criminalizes terrorist financing. Provides resident advisors to provide technical  assistance to judicial officials in their home country.
Provides financial intelligence training and technical assistance to a broad range of  government officials, financial regulators, law enforcement officers, and others  abroad with a focus on the creation and improvement of financial intelligence units.  FinCEN’s IT personnel provide FIU technical assistance in two primary areas:  analysis and development of network infrastructures and access to a secure web  network for information sharing. Conducts personnel exchanges and conferences.  Partners with other governments and international entities to coordinate training.  Participates in assessments of foreign governments’ financial intelligence  capabilities.
Provides law enforcement training and technical assistance to foreign governments  and through ILEAs to develop the skills necessary to investigate financial crimes.
Provides financial regulatory training in Washington, D.C., and abroad for foreign  banking supervisors.
Office of Technical Assistance Provides a range of training and technical assistance including intermittent and  long-term resident advisors to senior-level representatives in various ministries and  central banks on a range of areas including financial reforms related to money  laundering and terrorist financing. Conducts and participates in assessments of  foreign government anti-money laundering regimes for the purpose of developing  technical assistance plans.
Participates in U.S. interagency assessments of countries’ counter-terrorism  financing and anti-money laundering capabilities. Provides technical advice and  practical guidance on how the international anti-money laundering and counter- terrorist financing standards should be adopted and implemented.
section_title: Comments from the Department of Justice
paragraphs: The following are GAO’s comments on the Department of Justices’s letter  dated September 29, 2005.
subsections: section_title: GAO Comments
paragraphs: 1.
Justice expressed concern that the draft report does not recognize the  significant role it plays in providing international training and technical  assistance in the money laundering and terrorist financing areas. The  report acknowledges the roles of multiple agencies, including Justice,  in delivering training and technical assistance to vulnerable countries.  Under the first objective we broadly describe the U.S. efforts to provide  training and technical assistance to vulnerable countries and note that  U.S. offices and bureaus, primarily within the departments of the  Treasury, Justice, Homeland Security, and State, and the federal  financial regulators, provide training and technical assistance to  countries requesting assistance through various programs using a  variety of methods funded primarily by the State and Treasury.  Moreover, appendix IV includes Table 2, which summarizes key U.S.  counter-terrorism financing and anti-money laundering training and  technical assistance programs for vulnerable countries and lists  contributions provided by Justice, as well as other relevant agencies.
2.
Justice expressed dismay that the report focuses on the interaction of  State and Treasury rather than the accomplishments of the TFWG.  While a number of comments suggested including information  indicative of the successes of agency efforts to address terrorist  financing abroad, much of this information is outside of the scope of  this report. However, we have made a number of changes in response  to these comments. First, we have added information on the  accomplishments of U.S. agencies to the report. Second, we have  adjusted our first objective to clarify that we are providing an overview  of U.S. agencies’ efforts to address terrorist financing abroad. Third, as  we note in other comments, we have adjusted the title of the report to  better reflect the focus of our work.
3.
Justice notes that the report addresses a narrower issue than the title  implies. We agree. We have revised the title of the report to focus on our  key recommendation. 4. According to Justice, our report contains a critical flaw because it does  not recognize Justice as a key player nor does it place Justice on equal  standing with State and Treasury in the report’s recommendation and  Memorandum of Agreement concerning training and technical  assistance. Justice noted that it should be involved in all interagency  deliberations and decisions. The report acknowledges the roles of  multiple important agencies, including Justice, in delivering training  and technical assistance to vulnerable countries. The report  recommends that the Secretaries of State and the Treasury, develop and  implement an integrated strategic plan in consultation with the NSC  and relevant government agencies, of which Justice is one (see  comment 1). We continue to believe that the Memorandum of  Agreement should be limited to the Secretaries of State and Treasury.  State and Treasury both primarily fund and support U.S. government  anti-money laundering and counter-terrorist financing training and  technical assistance programs, and in Treasury’s case also provides  considerable training and technical assistance abroad through current  U.S. government employees and contractors. It is important that their  programs and funding be integrated to optimize results. Other agencies  are important stakeholders, as they are recipients of this funding and  support and should benefit from improved coordination between these  two agencies. Justice primarily receives funding from State and,  according to Justice, State has been supportive of Justice’s training and  technical assistance efforts.
5.
Justice states that contrary to the impression conveyed in the draft, it  fully respects the “honest broker role” that State plays as the TFWG  coordinator. We have added information from Justice to more  accurately portray Justice’s support of State as TFWG coordinator in  the Highlights page, Results in Brief, and body of the report.
subsections: section_title: Additional Comments from the Department of Justice
paragraphs: Justice provided information in its technical comments that we believe are  important to the key findings and recommendations in this report. While  we have addressed Justice’s technical comments as appropriate, we have  reprinted and addressed specific technical comments below. 1. “The draft Report reflects that “Justice officials confirmed that roles and procedures [of  the TFWG] were a matter of dispute.” The context suggests that DOJ [Department of  Justice] does not accept the leadership of the State Department. That is not an accurate  statement. DOJ strongly agrees that there needs to be a designated coordinator in this  TFWG process and supports that role being given to the State Department, which has been  an honest broker in the process and DOJ has abided by its procedures. DOJ agrees with the  observation that the Treasury Department does not accept the State Department’s  leadership or the procedures. . . .”   “Justice officials confirmed that roles and procedures were a matter of dispute.” It would  be more accurate to replace dispute with disagreement.”
GAO response: Justice made these two comments concerning the  statement in the draft report that “Justice officials confirmed that roles  and procedures were a matter of dispute.”  We added language to show  that Justice is supportive of State’s role as coordinator of TFWG efforts  and substituted the word “disagreement” for “dispute” when stating  that “Justice officials confirmed that roles and procedures were a  matter of disagreement.”
2. “The draft report references that AFMLS   stated that “the Department of State’s leadership role is limited to its chairmanship of  TFWG…” To be clear, this statement was not made to suggest that the TFWG be limited to  priority countries, but rather that differing standards on procedures (particularly with DOJ  leadership role in legislative drafting) for priority countries and vulnerable countries creates  problems.”
GAO response:  In response to this point, we removed the report’s  reference to AFMLS and noted that Justice officials told us that having  procedures and practices for TFWG priority countries that differ from  those for other vulnerable countries creates problems.
section_title: Comments from the Department of State
paragraphs: The following are GAO’s comments on the Department of State’s letter  dated October 3, 2005.
subsections: section_title: GAO Comments
paragraphs: 1. State noted in its comments that it does not believe the report  accurately portrays the overall effectiveness and success of the  Administration’s counter-terrorism finance programs. While a number  of comments suggested including information indicative of the  successes of agency efforts to address terrorist financing abroad, much  of this information is outside of the scope of this report. However, we  have made a number of changes in response to these comments. First,  we have added information on the accomplishments of U.S. agencies to  the report. For example, we added information on the number of needs  assessment missions conducted and the number of countries receiving  training and technical assistance. Second, we have adjusted our first  objective to clarify that we are providing an overview of U.S. agencies'  efforts to address terrorist financing abroad. Third, as we note in other  comments, we have adjusted the title of the report to better reflect the  focus of our work. 2. State commented that it has an integrated strategic plan which is  evidenced through classified NSC Deputies Committee documentation  and the Department of States’ Office of the Coordinator for  Counterterrorism’s Bureau Performance Plan. We reviewed the NSC  Deputies Committee documentation, which includes minutes, an  agreement, and conclusions-- all of which serve as the NSC guidance  for the TFWG. We also reviewed the performance plan, which includes  the Office of the Coordinator for Counterterrorism’s objectives and  performance measures for counter-terrorist financing programs and  provides some performance indicators, such as the number of  assessments and training plans completed. Although some aspects of a  strategic plan for delivering training and technical assistance are  included in these documents, we do not agree that this guidance and  performance plan includes the elements necessary to constitute an  integrated strategy for the coordination of the delivery of training and  technical assistance abroad. In addition to not having a fully integrated  strategy on paper, the NSC guidance lacks clarity, particularly regarding  coverage of non-priority countries. The guidance also lacks familiarity  and clear buy-in among the pertinent levels of agencies. As a result, the  documents did not guide the actions of the agencies in actual practice.  3. State commented that “if the country team, interagency and host  government agree on an implementation plan, TFWG determines the  necessary funding for State to obligate to each agency with the  appropriate expertise.” State added that it carefully monitors and can  account for all of the funding Congress has appropriated for training  programs coordinated through the TFWG, as provided in a classified  report. Our report did not specifically address TFWG-reported  obligations and expenditures, as this information focusing on priority  countries was classified. Our report focused on the lack of  transparency in the overall amount of funds available for all counter- terrorism training and technical assistance programs within State and  the Treasury. Because funding is embedded with anti-money laundering  and other programs, the U.S. government does not have a clear  presentation of the budget resources that State and Treasury allocate  for training and technical assistance to counter-terrorist financing as  differentiated from other programs. Although various officials told us  that funding for counter-terrorism financing training and technical  assistance is insufficient, the lack of a clear presentation of available  budget resources makes it difficult for decision-makers to determine  the actual amount that may be allocated to these efforts.  4. We do not agree with State’s comment that TFWG has been very  diligent in developing methods to measure its success. As of July 2005,  the U.S. government, including TFWG, did not have a system in place to  measure the results of its efforts to deliver training and technical  assistance and to incorporate this information into integrated planning  efforts. Our report acknowledges that an interagency committee was  set up to develop a system to measure results and other efforts were  undertaken to track training and technical assistance; however,  according to agency officials, these efforts have not yet resulted in  performance measures.  5. Based on our review of NSC and other documents provided by State,  the U.S. government lacks an integrated strategy to coordinate the  delivery of training and technical assistance. The classified document  serving as an interagency agreement lacks clarity as well as familiarity  and buy-in from all agencies and levels of leadership within TFWG,  particularly Treasury. The NSC guidance was agreed to at the deputy  level, and we found that many of the working level staff were not  familiar with the guidance or the interpretation of the guidance and  Treasury staff clearly did not have the same interpretation as State  staff. 6. State noted that there are established methods to resolve disputes that  arise through the interagency process and it is rare that the TFWG  process cannot resolve issues. While there are guidelines for resolving  disputes, in practice there are long-standing disagreements that have  not been resolved. Based on discussions with agency officials and  review of documentation, our report provides examples of long- standing disagreements that have not been resolved such as the use of  contractors and procedures for conducting assessments of country’s  needs for training and technical assistance.  7. State commented that it is the primary responsibility of the TFWG to  coordinate all training and technical assistance and notes the existence  of formal supporting documents. State commented that while it does  not believe additional formal documents are necessary, if a  Memorandum of Agreement concerning counter-terrorism financing  and anti-money laundering training and technical assistance were to be  developed, State commented that it should include all agencies  involved in providing training and technical assistance. Our review as  well as Treasury’s technical comments clearly shows that Treasury  does not accept State’s position that TFWG’s primary responsibility is  to coordinate all counter-terrorist financing training and technical  assistance abroad. Treasury limits this role to priority countries. Based  on our review of NSC and other documents provided by State, the U.S.  government lacks an integrated strategy to coordinate the delivery of  training and technical assistance. The classified document, which  according to State serves as an interagency agreement, lacks clarity,  familiarity, and buy-in from all levels of leadership within TFWG,  particularly Treasury. State and Treasury both fund and support U.S.  government anti-money laundering and counter-terrorist financing  training and technical assistance programs, and Treasury also provides  considerable training and technical assistance abroad through  contractors and U.S. government employees. It is important that their  programs and funding are integrated to optimize results. Other agencies  are important stakeholders as they are recipients of this funding and  support and would benefit from improved coordination between these  two agencies. 8. State comments that our recommendation to the Secretary of the  Treasury regarding Treasury’s annual Terrorist Assets Report to  Congress was incomplete because it makes no mention of State’s role  in blocking assets. Specifically we recommend that Treasury provide  more complete information on the nature and extent of asset blocking  in the United States in its annual Terrorist Assets Report to Congress.  We did not incorporate the Secretary of State into this recommendation  because the scope of our request for our third objective focused solely  on the accountability issues Treasury faces in its efforts to block  terrorists’ assets. State also expressed disappointment that our report  did not include details on State’s role in terrorist designations. While  our report provides an overview of how U.S. government agencies use  designations to disrupt terrorist networks, we recognize that State has  an important role and added language to provide more detail on State’s  role in targeting individuals, groups, or other entities suspected of  terrorism or terrorist financing.
9.
In response to agency comments, we have revised the title of the report  to focus on our key recommendation. 10. The scope of our second objective was to examine U.S. efforts to  coordinate the delivery of training and technical assistance to  vulnerable countries. The effort does not have key stakeholder buy-in  on roles and practices, a strategic alignment of resources with needs, or  a system to measure performance and incorporate this information into  its planning efforts. According to agency officials, the lack of effective  leadership leads to less than optimal delivery of training and technical  assistance to vulnerable countries. Without a system to measure  performance, the U.S. government and TFWG cannot ensure that its  efforts are on track. 11. Although this report is based on unclassified information, GAO  reviewed all unclassified and classified information provided by State  in support of TFWG efforts. We believe that findings, conclusions, and  recommendations accurately portray the interagency process.  Moreover, we reviewed and incorporated additional information  provided by State subsequent to issuing our draft to the agencies for  comment to ensure that all available information was assessed.
section_title: Comments from the Department of the Treasury
paragraphs: The following are GAO’s comments on the Department of the Treasury’s  letter dated October 5, 2005.
subsections: section_title: GAO Comments
paragraphs: 1. Treasury notes in its comments that the report falls short in describing  the comprehensive efforts of the U.S. government efforts to combat  terrorist financing abroad. While a number of comments suggested  including information indicative of the successes of agency efforts to  address terrorist financing abroad, much of this information is outside  of the scope of this report. However, we have made a number of  changes in response to these comments. First, we have added  information on the accomplishments of U.S. agencies to the report. For  example, we added that Treasury has coordinated bilateral and  international technical assistance with the FATF and the international  financial institutions, such as the World Bank and International  Monetary Fund, to draft legal frameworks, build necessary regulatory  and institutional systems, and develop human expertise. Second, we  have adjusted our first objective to clarify that we are providing an  overview of U.S. agencies' efforts to address terrorist financing abroad.  Third, as we note in other comments, we have adjusted the title of the  report to better reflect the focus of our work. 2. Treasury suggests that the title of the draft report be modified to be  consistent with the primary focus of the report. We agree and have  revised the title of the report to focus on the key recommendations.  3. Treasury states that the report does not accurately characterize  Treasury’s role in managing the U.S. government’s relationship with  international financial institutions. We recognize that Treasury plays an  important role and added more examples of Treasury’s relationship  with international financial institutions as provided in Treasury’s  technical comments. For example, we added Treasury’s relationship  with an intergovernmental body --the Financial Action Task Force-- in  setting international standards for anti-money laundering and counter- terrorism financing regimes. In addition, we added mentions of  Treasury’s relationship with the Asian Development Bank, IMF and the  World Bank.  4. Treasury comments that the report focuses on the difficulties and  differences arising from the interagency process to coordinate training  and technical assistance to combat terrorist financing abroad and fails  to give due credit for the successes that have been achieved through  unprecedented interagency coordination. Our report concludes that the  U.S. government lacks an integrated strategy to coordinate the delivery  of training and technical assistance because key stakeholders do not  agree on roles and practices, there is not a clear presentation of what  funding is available for counter-terrorism financing training and  technical assistance, and a system has not been established to measure  performance and incorporate this information into its planning efforts.  Our report notes that, according to agency officials, the lack of  effective leadership leads to less than optimal delivery of training and  technical assistance to vulnerable countries. However, we have  included some interagency accomplishments such as numbers of  assessments in our description of training and technical assistance  efforts under objective 1. To best provide evidence of the effectiveness  of the U.S. government efforts, the U.S. government should continue to  develop a system to measure performance and incorporate this  information into its planning efforts.
5.
In its comments, Treasury states that the report’s third objective on  accountability issues appears somewhat incongruous in a report  dedicated to U.S. counter-terrorism training and technical assistance.  Our requesters asked us to address specific issues related to U.S.  efforts to combat terrorist financing abroad, including accountability  issues Treasury faces in its efforts to block terrorists’ assets held under  U.S. jurisdiction, particularly with regard to the Treasury’s annual  Terrorist Assets Reports. 6. We reviewed the revised text provided by Treasury for our report’s third  objective on accountability issues the Department faces in its efforts to  block terrorists’ assets held under U.S. jurisdiction. We noted that we  already cover many of Treasury’s points in our report. However, in  some cases we incorporated technical information to help clarify the  challenges the department faces in assessing the impact of terrorist  designation activities. In addition, we updated the report to reflect the  most current status of Treasury’s efforts to establish performance  measures for OFAC. Additionally, we acknowledge that the language in  the mandate for the Terrorist Assets Reports did not explicitly design  the reports as an accountability measure of the Office of Foreign Assets  Control’s effectiveness in identifying and blocking terrorist assets;  however, nothing in the statutory language or in the congressional  intent underlying the mandate precludes Treasury from compiling and  reporting information in the manner in which we have suggested in this  report. Furthermore, we believe that inclusion of comparative  information and additional explanation regarding significant shifts  between years will enhance program reporting and congressional  oversight.
subsections: section_title: Additional Comments from the Department of the Treasury
paragraphs: “The second paragraph of this section states, “First, although the Department of State  asserts that it leads the overall effort to deliver training and technical assistance to all  vulnerable countries, the Department of Treasury does not accept State in this role.”  This  statement should be clarified to reflect that while Treasury does acknowledge State’s role, it  believes that State’s function is necessarily one of coordination. State’s role in this process is  not to actually “deliver” assistance. Rather, Treasury believes that State’s role is  coordinating each USG agency’s personnel and expertise to allow them to deliver the  needed training in commonly agreed upon priority countries. Treasury also acknowledges  that the draft report is helpful in pointing out that this coordination can and should be  improved to facilitate more effective delivery of assistance in priority countries.” “The first paragraph contains the following statement “According to the Department of  State, its Office of the Coordinator for Counterterrorism is charged with directing,  managing, and coordinating all U.S. government agencies’ efforts to develop and provide  counter-terrorism financing programs.” This statement is inaccurately overbroad, as  Treasury (and likely other government agencies) has developed numerous counterterrorist  financing programs to advance the core strategic aims identified in the 2003 NMLS [National  Money Laundering Strategy]. It is more accurate to say that the department of State  coordinates the USG provision of CFT  technical  assistance and training to priority countries.” “Substitute  with the following language: ‘However, the TAR   was not mandated or designed as an accountability measure for OFAC’s effectiveness in  assisting U.S. persons in identifying and blocking assets of persons designated under  relevant Executive orders relating to terrorism. The report, as mandated, was intended to  provide only a snapshot view in time of terrorist assets held in the United States by  terrorist countries and organizations.’” “Substitute  with the following language: ‘OFAC officials have advised that OFAC’s  new performance measures are expected to be completed by December 1, 2005, and its  new strategic plan is expected to be completed by January 1, 2006.’” “In the second paragraph, the following language: “We also recommend that the Secretary of  Treasury provide more complete information on the nature and extent of asset blocking in  the United States in its Terrorist Assets Report to Congress and establish milestones for  developing meaningful performance measures on terrorist designations and asset blocking  activities…..”  Should be replaced with the following language:  . . . .“We also recommend Congress consider discontinuing the requirement that Treasury  produce the annual Terrorist Assets Report to Congress. The report, based upon the input  of numerous government agencies, provides a snapshot of the known assets held in the  United States by terrorist-supporting countries and terrorist groups at a given point in  time. These numbers may fluctuate during each year and between years for a number of  policy-permissible reasons. The amount of assets blocked under a terrorism sanctions  program is not a primary measure of a terrorism sanctions program’s effectiveness, and  countries that have been declared terrorist supporting, and whose assets are not blocked  by a sanctions program, are already wary of holding assets in the United States.’”
GAO response: We noted Treasury’s position on this recommendation  in our report. However, we continue to believe that the annual Terrorist  Assets Report, with the incorporated changes, would be useful to  policymakers and program managers in examining their overall  achievements of the U.S. efforts to block terrorists’ assets.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Christine Broderick, Assistant  Director; Tracy Guerrero; Elizabeth Guran; Janet Lewis; and Kathleen  Monahan made key contributions to this report. Martin de Alteriis, Mark  Dowling, Jamie McDonald, and Michael Rohrback provided technical  assistance.