Terrorist Financing:

Better Strategic Planning Needed to Coordinate U.S. Efforts to Deliver Counter-Terrorism Financing Training and Technical Assistance Abroad

GAO-06-19: Published: Oct 24, 2005. Publicly Released: Nov 29, 2005.

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Terrorist groups need significant amounts of money to organize, recruit, train, and equip adherents. U.S. disruption of terrorist financing can raise the costs and risks and impede their success. This report (1) provides an overview of U.S. government efforts to combat terrorist financing abroad and (2) examines U.S. government efforts to coordinate training and technical assistance. We also examined specific accountability issues the Department of the Treasury faces in its efforts to block terrorists' assets held under U.S. jurisdiction.

U.S. efforts to combat terrorist financing abroad include a number of interdependent activities--terrorist designations, intelligence and law enforcement, standard setting, and training and technical assistance. First, the U.S. government designates terrorists and blocks their assets and financial transactions and supports similar efforts of other countries. Second, intelligence and law enforcement efforts include operations, investigations, and exchanging information and evidence with foreign counterparts. Third, U.S. agencies work through the United Nations and the Financial Action Task Force on Money Laundering to help set international standards to counter terrorist financing. Fourth, the U.S. government provides training and technical assistance directly to vulnerable countries and works with its allies to leverage resources. The U.S. government lacks an integrated strategy to coordinate the delivery of counter-terrorism financing training and technical assistance to countries vulnerable to terrorist financing. Specifically, the effort does not have key stakeholder acceptance of roles and procedures, a strategic alignment of resources with needs, or a process to measure performance. First, the Department of Treasury does not accept the Department of State leadership or the State-led Terrorist Financing Working Group's (TFWG) procedures for the delivery of training and technical assistance abroad. While supportive of the Department of State's role as coordinator of TFWG efforts, the Department of Justice officials confirmed that roles and procedures were a matter of disagreement. Second, the U.S. government does not have a clear presentation and objective assessment of its resources and has not strategically aligned them with its needs for counter-terrorist financing training and technical assistance. Third, the U.S. government, including TFWG, lacks a system for measuring performance and incorporating results into its planning efforts. The Treasury faces two accountability issues related to its terrorist asset blocking efforts. First, Treasury's Office of Foreign Assets Control (OFAC) reports on the nature and extent of terrorists' U.S. assets do not provide Congress the ability to assess OFAC's achievements. Second, Treasury lacks meaningful performance measures to assess its terrorist designation and asset blocking efforts. OFAC is in the process of developing more meaningful performance measures aided by its early efforts to develop an OFAC-specific strategic plan. Officials stated that OFAC's new performance measures will be completed by December 1, 2005, and its strategic plan will be completed by January 1, 2006; however, they did not provide us with documentation of milestones or completion dates.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: On April 6, 2006, hearings were held by the House Committee on Financial Services, Subcommittee on Oversight and Investigations, in response to GAO?s matter to Congress in GAO-06-19 that it consider requiring the Secretary of State and the Secretary of the Treasury submit an annual report to Congress on the status of the development and implementation of the integrated strategic plan and Memorandum of Agreement. During the hearing,the Comptroller General of GAO testified and was asked a number of questions regarding GAO's matters to Congress. Committee members asked the Comptroller General about the conditions under which legislation would be needed, as well as the necessary facets of a strategic plan.

    Matter: In view of congressional interest in U.S. government efforts to deliver training and technical assistance abroad to combat terrorist financing and the difficulty in obtaining a systematic assessment of U.S. resources dedicated to this endeavor, Congress may wish to consider requiring the Secretary of State and the Secretary of the Treasury to submit an annual report to Congress on the status of the development and implementation of the integrated strategic plan and Memorandum of Agreement.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with the National Security Council (NSC) and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that designates leadership and provides for stakeholder involvement.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with the National Security Council (NSC) and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that designates leadership and provides for stakeholder involvement.

    Agency Affected: Department of State

  3. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that includes a systematic and transparent assessment of U.S. government resources.

    Agency Affected: Department of State

  4. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that includes a systematic and transparent assessment of U.S. government resources.

    Agency Affected: Department of the Treasury

  5. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that delineates a method for aligning the resources of relevant U.S. agencies to support the mission.

    Agency Affected: Department of State

  6. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that delineates a method for aligning the resources of relevant U.S. agencies to support the mission.

    Agency Affected: Department of the Treasury

  7. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that provides processes and resources for measuring and monitoring results, identifying gaps, and revising strategies accordingly.

    Agency Affected: Department of State

  8. Status: Closed - Implemented

    Comments: In May 2007, the Director of the Office of Strategic Policy for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury (Treasury) testified before the U.S. Senate Homeland Security and Government Affairs Committee and discussed interagency strategy to combat terrorist financing and support. In subsequent conversations, officials from the Departments of State and Treasury discussed with GAO the existence of an integrated strategy to combat terrorist financing which defined roles and responsibilities for relevant parties. Thus, GAO considers this recommendation closed as implemented. For further information, please contact Loren Yager at 202-512-4347.

    Recommendation: To ensure that U.S. government interagency efforts to provide counter-terrorism financing training and technical assistance are integrated and efficient, particularly with respect to priority countries, the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, should develop and implement an integrated strategic plan for the U.S. government that provides processes and resources for measuring and monitoring results, identifying gaps, and revising strategies accordingly.

    Agency Affected: Department of the Treasury

  9. Status: Closed - Not Implemented

    Comments: The Departments of State and Treasury were unable to provide documentation that they have produced a formal Memorandum of Agreement addressing all the elements included in GAO's recommendation.

    Recommendation: To ensure a seamless campaign in providing counter-terrorism financing training and technical assistance programs to vulnerable countries, the Secretaries of State and the Treasury should enter into a Memorandum of Agreement concerning counter-terrorism financing and anti-money laundering training and technical assistance. The agreement should specify: (1) the roles of each department, bureau, and office with respect to conducting needs assessments and delivering training and technical assistance; (2) methods to resolve disputes concerning the Office of Technical Assistance's use of confidentiality agreements in its contracts when providing counter-terrorism financing and anti-money laundering assistance; and (3) coordination of funding and resources for counter-terrorism financing and anti-money laundering training and technical assistance.

    Agency Affected: Department of State

  10. Status: Closed - Not Implemented

    Comments: The Departments of State and Treasury were unable to provide documentation that they have produced a formal Memorandum of Agreement addressing all the elements included in GAO's recommendation.

    Recommendation: To ensure a seamless campaign in providing counter-terrorism financing training and technical assistance programs to vulnerable countries, the Secretaries of State and the Treasury should enter into a Memorandum of Agreement concerning counter-terrorism financing and anti-money laundering training and technical assistance. The agreement should specify: (1) the roles of each department, bureau, and office with respect to conducting needs assessments and delivering training and technical assistance; (2) methods to resolve disputes concerning the Office of Technical Assistance's use of confidentiality agreements in its contracts when providing counter-terrorism financing and anti-money laundering assistance; and (3) coordination of funding and resources for counter-terrorism financing and anti-money laundering training and technical assistance.

    Agency Affected: Department of the Treasury

  11. Status: Closed - Not Implemented

    Comments: The Terrorist Assets Report for 2012 included information on the value of assets blocked in 2011 and 2012, thus allowing some comparison of the differences between years. However, it does not include information on when and why assets were unfrozen or the achievements and obstacles faced by the U.S. government.

    Recommendation: To ensure that policy makers and program managers are able to examine the overall achievements of U.S. efforts to block terrorists' assets, the Secretary of the Treasury should provide in its annual Terrorist Assets Report to Congress more complete information on the nature and extent of asset blocking in the United States. Specifically, the report should include such information as the differences in amounts blocked between the years, when and why assets were unfrozen, the achievements and obstacles faced by the U.S. government, and a classified annex if necessary.

    Agency Affected: Department of the Treasury

  12. Status: Closed - Not Implemented

    Comments: Treasury did not develop an OFAC-specific strategic plan by January 1, 2006.

    Recommendation: As part of the Treasury's ongoing strategic planning efforts, the Secretary of the Treasury should complete efforts to develop an OFAC-specific strategic plan by January 1, 2006, to guide and assess its asset blocking efforts.

    Agency Affected: Department of the Treasury

  13. Status: Closed - Not Implemented

    Comments: OFAC did not prepare meaningful performance measures to guide its asset blocking efforts by December 2005. Subsequent GAO reporting in September 2009 (GAO-09-794) recommended improving the Office of Terrorism and Financial Intelligence's performance measures. In response to that recommendation, GAO found that in fiscal year 2011 the Office of Terrorism and Financial Intelligence (which includes OFAC) developed improved performance measures to cover its activities, including asset blocking.

    Recommendation: In addition, as part of the Treasury's ongoing strategic planning efforts, the Secretary of the Treasury should complete efforts to develop meaningful performance measures by December 1, 2005, to guide and assess its asset blocking efforts.

    Agency Affected: Department of the Treasury

 

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