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Tracking Terror Finances Will Be Tough

International terrorists' use of an age-old moneychanging system is so widespread, it will take a painstaking process of investigation and analysis before the sources of funding for their operations are unraveled and dismantled, a Persian Gulf financial markets expert says.
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"This is going to be a very long war, as the President (Bush) said. And you're going to have to look for patterns of (money) transfers," said Jean-Francois Seznec, a Columbia University professor of banking and finance, who is a specialist on Persian Gulf banking practices.

"My solution is to do a computer analysis and see if you can find patterns of transfers, starting from profiling of certain institutions, and that's very time consuming," he added. The analysis requires extensive cooperation among the US banks in interpreting the financial data linked to the various bank accounts in Florida, Boston and New York used by Mohamed Atta, the suspected ringleader of the September 11 attacks, and his accomplices.

"You may obtain a lot of support from the Saudi Arabian and Bahrain monetary agencies. If they can find the pattern they will want to make sure that these are stopped. And you could block the accounts of certain moneychangers here (in the United States)," said Seznec. Once the accounts are blocked, a major channel of funding terrorists' operations is severed, he added.

The secretive and trust-based money-changing system known as hawala in the Middle East and hundi in Pakistan is indicative of the manner in which the terrorists received cash to finance their low-cost but horrific operation of crashing commercial airliners into the World Trade Center and the Pentagon on September 11.

"You take some money, cash or check. If you want to have a better, faster, cheaper transaction you go to a moneychanger, a hawala. You give him the money, he gives you a draft with the person's name on it and you put it in the mail. It's perfectly legal," said Seznec, who worked for a number of years in the Gulf region's finance industry prior to teaching with the Middle East Institute of Columbia University's School of International and Public Affairs.

"It makes life a lot simpler. There's no questions asked, you have no reporting to do to anybody," Seznec said at a recent forum on Finance and Terrorism.

In the long run, the deeper issues of resentment by Arabs an Muslims against the United States need to be addressed. "There are many families in the Kingdom (of Saudi Arabia) who are extremely upset at the United States, and they are willing to give some money, to fight the United States, to humble the United States," he said.

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