September 23, 2016 | The Hill
Fifteen years since pivotal executive order, STORM Act could help fight terror finance
Fifteen years ago today, President George W. Bush signed Executive Order 13224, the opening salvo in America’s new financial statecraft against terrorism.
With the nation still reeling from 9/11, the president’s judicious measure gave new counterterrorism powers to executive agencies and signaled for the first time that funders of terrorism would be systematically targeted. With the Senate now considering legislation to expand that order’s impact, it is worth reflecting on its legacy to decide where we go from here.
While E.O. 13224 authorized U.S. executive agencies to name and shame terror financiers, it does not specifically pressure the negligent governments that grant them safe haven.
Congress is looking at ways to fill gaps like these. One such piece of legislation is the STORM Act of 2016 (Stop Terrorist Operational Resources and Money), which would give the president new tools to penalize permissive jurisdictions for terrorist finance. The legislation has garnered endorsements from a surprisingly diverse core group of supporters: Sens. Robert Casey (D-Pa.), Johnny Isakson (R-Ga.), Elizabeth Warren (D-Mass.), and Marco Rubio (R-Fla.).
Juan Zarate, who served as Bush’s Deputy National Security Advisor for Combating Terrorism, explains the historic significance of E.O. 13224 in his memoir, Treasury’s War. [Note: Zarate is Chairman of FDD’s Center on Sanctions and Illicit Finance, where the author is a Senior Fellow].
Zarate called E.O. 13224’s “a new form of financial warfare.” By choosing to methodically target terrorists’ support networks, he noted that it makes it harder for them to collect and use funds, forces them to make difficult budgetary tradeoffs, and helps to deter other potential supporters. In addition, the punitive framework it established exposes terror funders by name to encourage the private sector and foreign governments to crack down on them as well.
Initially, the executive order blocked only 27 entities from holding assets in America or engaging in transactions with U.S. persons, focusing on al-Qaeda’s top leaders and several of its earliest partner organizations in places like Egypt, Pakistan, Lebanon, Libya, Algeria, the Philippines, and Uzbekistan. But more importantly, E.O. 13224 provided the Treasury and State Departments with invaluable new tools in the fight against terrorism.
Whereas past designations of this sort had been issued by the White House, E.O. 13224 deputized the Secretary of State to sanction terror operatives involved in attacks, in addition to authorizing the Treasury Secretary to sanction terrorism’s funders and financial fronts. Just last week, for example, Foggy Bottom acted under E.O. 13224 to sanction a top Hamas commander, and Treasury sanctioned two alleged financiers of the Islamic State based in Turkey.
The ultimate result of this reform has been hundreds of follow-on designations by executive agencies under E.O. 13224, which never could have happened if the White House monopolized this responsibility. The Obama administration has continued to make full use of this authority, turning E.O. 13224’s legacy into a bipartisan success story in the battle against terrorism.
Yet more still needs to be done.
One of the current framework’s biggest challenges has been that certain host countries do little to nothing after Washington sanctions actors on their territory as Specially Designated Global Terrorists (SDGTs) under E.O. 13224.
Throughout 2015, Turkey detained over 1,000 suspects accused of links to IS but prosecuted absolutely none for terror finance, according to State Department reporting. Qatar and Kuwait host numerous SDGTs accused by the U.S. of funding al-Qaeda, yet there is not a single documented instance of either state effectively convicting a local SDGT for terror finance.
Just this week, the terrorist group Jaish-e-Mohammad reportedly murdered 17 soldiers in India. The State Department revealed in June that Pakistan has “not taken sufficient action” against the Jaish, “which continued to operate, train, organize, and fundraise in Pakistan.”
As such, legislation like the STORM Act could give the White House new leverage to persuade these governments to clean up their act. But regardless of who wins the November election, our next president may be tempted to avoid using this designation in order to focus on other priorities. Rocking the boat with influential allies is politically and strategically daunting, even if it could boost national security in the long term.
Therefore, it could be even more effective to also require the next administration within a set period of time to determine whether or not Turkey, Qatar, Kuwait, and Pakistan qualify as permissive jurisdictions for terrorist finance.
Fifteen years into the new era of combating terror finance, we can and should work together to ensure that such negligence by U.S. allies is finally eliminated.
David Andrew Weinberg is a Senior Fellow with the Center on Sanctions and Illicit Finance at the Foundation for Defense of Democracies. He previously served as a Democratic Professional Staff Member at the House Committee on Foreign Affairs. Follow him on Twitter @DavidAWeinberg.