decisions on the fact that the banks ’ conduct was seemingly to remote from the actual terrorist attack that injured the plaintiffs .
In Paulos ’ eyes , such dismissals are “ greenlights ” to banks and others to keep money laundering . “ That ’ s the whole point of money laundering ! Those who facilitate these transactions want to stack layers upon layers , creating so many links in the chain , that by the time it the transaction it looks like something that it ’ s not ,” Paulos said .
“ Essentially , at the trial court level , these dismissals are rewarding money launderers for what they do ,” he continued , “ creating a convoluted chain to avoid liability , with the banks charging transactional fees at every step , and ultimately getting their high risk costumer ’ s money right where they want it .”
But recent decisions have placed the burden on Plaintiffs to establish that banks themselves are essentially the person pulling the trigger . “ It ’ s truly unfortunate . Congress passes legislation to give victims of terrorism the broadest possible means to hold those who supports terrorism , directly or indirectly , and no matter where they may be found , to account .” Paulos says , quoting JASTA , a law passed in 2016 over President Obama ’ s veto that codified civil causes of action for conspiracy and aiding & abetting terrorism . “ But instead , we have a couple of Courts in New York , blocks away from Wall Street , that have interpreted that same law to essentially make it even more narrow than it was before .”
Using Digital Currencies
The proliferation of digital currencies and seemingly anonymous payment methods poses new challenges for regulators in identifying and tracking illicit financial flows . Cryptocurrencies and online payment platforms provide a degree of anonymity and decentralized networks , making it difficult to trace transactions and identify the parties involved .
“ It really shouldn ’ t be surprising to anyone that cryptocurrencies are where terrorists are going ,” Paulos said .
When given the option to run a system of payment that can move money around the globe without such checks and balances , a terrorist operation will take this route — and this is what cryptocurrency offers .
“ As long as you can get your money out , you can move it around and use it for whatever you want ,” Paulos noted .
Cryptocurrency also offers anonymity , making it very attractive as a vehicle for illicit transactions . Unlike banks , which are required to know the beneficial owner of an account , cryptocurrency exists in anonymous digital “ wallets ” — and nobody knows to whom they belong .
Areas For Improvement
Since 9 / 11 , U . S . authorities have made substantial strides in mitigating key vulnerabilities that have been exploited by groups like Al-Qaeda and other terrorist organizations .
According to the 2022 NFTRA , through the cultivation of extensive knowledge regarding terrorism financing threats and weaknesses , the establishment of a robust legal and operational framework , and the bolstering of international partnerships and institutions , the United States has significantly undermined the financial and logistical support networks of various terrorist groups .
• FinCEN and U . S . law enforcement executed a synchronized effort to combat individuals or enterprises acting as unlicensed money transmitters , a tactic exploited by Al-Qaeda to finance operatives globally .
• The Treasury , in collaboration with its interagency and international partners , has actively engaged with charitable organizations to enhance their internal protocols and standards , reducing the susceptibility of exploitation by terrorist groups for fundraising or facilitation activities .
• The USA PATRIOT Act established a legal framework empowering the U . S . government to facilitate information sharing among financial institutions , aiding in the identification and reporting of terrorism financing activities . Recent amendments have further fortified this legal framework .
Nonetheless , those tasked with safeguarding the U . S . financial system encounter ongoing challenges in countering terrorism funding , as terrorists and their financiers continually adapt .
Potential areas for improvement and reform to prevent banks from funding terrorists include :
• Enhancing regulatory oversight through stricter enforcement of AML and counter-terrorism financing ( CTF ) regulations .
• Implementing advanced technology and data analytics to enhance detection capabilities
• Improving information-sharing mechanisms among financial institutions and regulatory authorities
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