European Union Acts To Crackdown On Terror Financing Networks

by Stefania Bianchi

(IPS) -- The European Union unveiled new proposals July 26 aimed at cutting off funding for terrorist networks.

Under the plans banks will be required to register the name, address and account number of everyone making money transfers in the European Union's (EU) member states.

That information would not normally be disclosed, but would be made available to police seeking to prevent money laundering, or to investigate or prosecute those behind terrorist funding.

The new requirement would apply to even the smallest amounts of money, and would include all transfers made from abroad into the EU and from the EU to accounts outside Europe. A simpler version of the regime will apply to money transfers within the EU, so as not to endanger the Union's efforts to build a single market for payments.

If those sending money -- individuals or institutions -- refuse to provide the required data, banks and other money remitters will ultimately be obliged to reject such transfers, or end links with these customers. Banks will be obliged to retain transfer data for at least five years.

The European Commission, the EU executive, says the new measures will assist the appropriate law enforcement authorities in detecting, investigating and prosecuting terrorists and other criminals and tracing their assets.

Internal market commissioner Charlie McCreevy said the new measures aim to increase the traceability of money flows by increasing the obligation for banks to alert law enforcement agencies of irregular payments that may then lead to prosecution of money laundering or terrorist financing.

"The fight against terrorism requires a sustained and focused effort on many fronts. One of these is to cut off the funding for terrorist actions," he said in a statement Tuesday.

"Only one month after the final adoption by the Financial Action Task Force (set up by the OECD, the Organization for Economic Cooperation and Development), of an international standard on money transfers, the Commission shows, with the adoption of this proposal, its determination to fully participate in the international effort to combat terrorism," he added.

McCreevy said he hoped the measure will quickly be endorsed by the European Parliament so it can become law across the EU in 2007.

"The objective is to cut off funding for terrorists, to make the environment increasingly harsh for terrorist financiers," added Commission spokesperson Michael Mann, presenting the plans to media representatives.

The proposed new regulation is part of the EU's 'plan of action to combat terrorism', and comes shortly after the London attacks in which suicide bombers killed 56 people and injured some 700.

It apparently would not apply to state terrorism, like the various U.S. wars and counterinsurgency campaigns that are often fatal to thousands.

The attacks sparked renewed criticism of the EU's record in fighting terrorism, as well as fresh pledges to step up joint work on terrorism and to meet missed commitments made after last year's Madrid bombings.

Ministers from the EU's 25 member states agreed earlier this month to increase their intelligence-sharing and to bolster efforts to cut off terrorists' financing networks. The Commission also threatened to expose those countries slow to put agreements in place.

Britain, which currently holds the EU's six-month rotating presidency, has given its backing to the proposals, and discussions on implementation will begin shortly.

Since the London bombings earlier this month, Britain has made the war on terror its top priority, in place of earlier plans to overhaul the bloc's common agricultural policy.

British Prime Minister Tony Blair wants to streamline the EU response to terror by enhancing intelligence-sharing, harmonising telephone and email data retention, and by overhauling the post of EU anti-terrorism coordinator which was introduced last year.

Individual countries have also launched joint actions to fight terrorism.

French Prime Minister Domonique de Villepin and Tony Blair agreed July 25 to cooperate more closely in fighting terrorism following the London bombings. They agreed to exchange names of suspected Islamic extremists, as well as information about how to protect vulnerable targets.

Paris and London are also keen to push forward legislation to retain communications data from telephone calls and e-mails for longer, before it gets the final go-ahead at the European level.