AML/CFT: US reports on amounts of funds it blocks.
There is no doubt that terrorism requires, on the whole, remarkably little money to be effective. There is also no doubt that the vast amount of money which is going to be used for terrorism is unlikely to be identified - it's simply doing what money does: passing through bank accounts as it is received, held and spent. So we would expect the amount of money frozen by the USA to be small, right? Well it is small - but it shouldn't be.
OFAC's report TAR2010 published yesterday includes the following statement:
" The blocked asset amounts described below represent amounts frozen under U.S. sanctions programs that block all property and interests in property of designated or blocked parties in the United States or in the possession or control of a U.S. person (or, in the case of Cuba, a person subject to U.S. jurisdiction). The term “interest” is broadly defined in OFAC’s sanctions regulations in Chapter V of Title 31 of the Code of Federal Regulations. An interest in property may be direct or indirect and includes property interests short of full ownership. In many instances, the interest may be partial or contingent. "
Note "or in the possession or control of a US person." So that means that all US dollar accounts anywhere in the world are subject to this provision because, under US law, all US dollars in the banking system (not cash) are legally held in correspondent banking accounts in Manhattan, New York.
Even if the end-user account is with a local bank elsewhere in the world, that local bank has to have a dollar clearing account with a US correspondent and therefore the money, once in electronic form (i.e. not in a safety deposit box) is therefore in the possession or control of a US person.
The US has ensured, by its own rules and by the current generation of SWIFT forms, that end-user information is available to it via various reporting regimes. And so, the US has intelligence that, if drilled down, tells it who holds US dollars in a bank account anywhere in the world.
It is therefore astonishing, given the access that the USA has gained to private information relating to individuals regardless of whether they are US citizens or not, that its total assets frozen under the anti-terrorism designations as at 31 December 2010 is just USD17, 638.125. That is two million less than a year earlier.
An additional USD309 million is frozen (up from USD280 million) in the case of "state sponsors of terrorism." Of that, zero is held under the Syria sanctions, USD12.7m under the Sudan sanctions, USD48.7m under the Iran sanctions. It's Cuba that makes up the numbers with USD248.1 million in 2010. The surprise is that despite a public thawing of relations, that figure has gone up from USD223.7m a year earlier.
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