Defence secretary Geoff Hoon has spelled out in greater detail how financial bodies, tax officials and accountants will be in the front line of the economic crackdown on Osama bin Laden, his Al Quaida, the Taliban and other terror groups.
Addressing parliament last week ahead of the attacks on Afghanistan, Hoon claimed government measures would ‘ensure that no bank or financial institution, national or international, will be able to offer a hiding place for terrorist funds without fear of prosecution’.
Hoon spoke out at the end of the second emergency session of parliament since the attacks on the World Trade Centre and the Pentagon and made it clear that in some cases there will be real-time monitoring of transactions by the police – possibly via online links into organisations data systems.
At last week’s truncated Labour party conference in Brighton, home secretary David Blunkett said the immediate anti-terror legislation will include ‘making it an offence for financial institutions not to report transactions that they know or suspect to be linked to terrorist activity’. That goes further than the anti money laundering provisions under current law, which also apply to accountants.
It will mean that not only is there a duty to report obvious facts but a duty to look and report suspicions – which may have to be accompanied by ‘reasonable person’ provisions to make them workable, although these have yet to be spelled out.
Hoon told MPs the measures ‘will include police monitoring of accounts that may be used for terrorism’.
In addition, there will be police powers to seize cash throughout the country and do so at the outset of an investigation instead of at its conclusion. He made no mention of compensation where suspicions turn out to be ill-founded.
And he revealed that existing restraints on the Inland Revenue and Customs & Excise exchanging any ‘relevant information’ with the security services and law enforcement agencies will be lifted.
He told MPs there will also be ‘tougher obligations on banks and financial institutions to report transactions that they suspect may be related to terrorism’ and ‘supervision of the implementation of the money laundering regulations by bureaux de change and money transmitters,’ which the authorities have long suspected of being a gaping hole in money laundering rules.
Meanwhile there are steps, too, within the European Union where the European Parliament has voted to support a freeze on financial assets of suspected terrorist organisations across the EU.
For more on money laundering, see page 7.