25 Pace L. Rev. 233 (2004-2005)
Terrorism and Money Laundering: Illegal Purposes and Activities

handle is hein.journals/pace25 and id is 241 raw text is: Terrorism and Money Laundering:
Illegal Purposes and Activities'
Victoria B. Bjorklund
Jennifer I. Reynoso
Abbey Hazlett2
The independent commission investigating the Sept. 11 attacks said the
U.S. government hasn't made much progress in figuring out how al Qaeda
gets its financing.... Most... comes from wealthy individuals in the
Persian Gulf and corrupt Islamic charities, the panel said ....
I. Introduction
A significant number of U.S. charitable organizations and donors
generally seek to serve individuals and organizations situated beyond our
borders. In the aftermath of September 11, 2001, however, regulators
and the media have focused on the fact that overseas giving, like all
cross-border transactions, may potentially be diverted for terrorism and
money   laundering.    Executive and legislative actions taken     after
September 11 specifically prohibit providing support for terrorism or
organizations and individuals associated with terrorism. In addition, in
2002, the U.S. Treasury Department issued Anti-Terrorist Financing
Guidelines: Voluntary Best Practices for U.S.-Based Charities,4 which
are intended to provide practices which may reduce the risks that a
charity's funds will be diverted to terrorist purposes.
1. Copyright © 2004 Victoria B. Bjorklund. This paper was first presented by
Victoria B. Bjorklund on October 28, 2004 at a conference of the National Center on
Philanthropy and the Law entitled Diversions of Charitable Assets: Crimes and
Punishments. With the exception of a few minor citation changes, this paper has been
adopted as first presented at the National Center on Philanthropy and the Law conference.
2. The authors are, respectively, Partner, Associate, and Summer Associate in the
Exempt Organizations Group at Simpson Thacher & Bartlett LLP.
3. Glen R. Simpson, Terror-Fund Countermeasures Ripped, THE WALL ST. J, Aug.
23, 2004, at B2.
4. United States Department of the Treasury, U.S. Department of the Treasury Anti-
Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-Based Charities,
available at http://www.treas.gov/press/releases/docs/tocc.pdf (last visited Apr. 12,

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