Monitoring of Banks Transactions Old News

While Bush and the White House have come unglued with the New York Times report of international bank monitoring the information has been public for years (they don't seem upset with the Wall Street Journal which reported the same thing). From Counterterrorism Blog: Reports of US Monitoring of SWIFT Transactions Are Not New: The Practice Has Been Known By Terrorism Financing Experts For Some Time By Victor Comras Yesterday’s New York Times Story on US monitoring of SWIFT (Society for Worldwide Interbank Financial Telecommunication) transactions certainly hit the street with a splash. It awoke the general public to the practice. In that sense, it was truly new news. But reports on US monitoring of SWIFT transactions have been out there for some time. The information was fairly well known by terrorism financing experts back in 2002. The UN Al Qaeda and Taliban Monitoring Group , on which I served as the terrorism financing expert, learned of the practice during the course of our monitoring inquiries. The information was incorporated in our report to the UN Security Council in December 2002. That report is still available on the UN Website. Paragraph 31 of the report states: “The settlement of international transactions is usually handled through correspondent banking relationships or large-value message and payment systems, such as the SWIFT, Fedwire or CHIPS systems in the United States of America. Such international clearance centres are critical to processing international banking transactions and are rich with payment information. The United States has begun to apply new monitoring techniques to spot and verify suspicious transactions. The Group recommends the adoption of similar mechanisms by other countries.” Suggestions that SWIFT and other similar transactions should be monitored by investigative agencies dealing with terrorism, money laundering and other criminal activity have been out there for some time. An MIT paper discussed the pros and cons of such practices back in 1995. Canada’s Financial Intelligence Unit, FINTRAC,, for one, has acknowledged receiving information on Canadian origin SWIFT transactions since 2002. Of course, this info is provided by the banks themselves. While monitoring SWIFT-handled transfers is a useful tool in identifying and tracking certain suspicious transactions, its importance should not be overstated. The information in SWIFT’s hands is no better than the information which it is provided by the banks handling the transactions at both ends. And there is already an obligation on banks in the US and Europe to report all “suspicious transactions” The problem is that FINCEN and the corresponding FIUS in other countries have simply been overwhelmed by the enormous amount of transactions that are reported to them (see my earlier blog) Another problem is that European Banks are just getting around to providing (and requiring) information, such as names, account numbers and addresses of originators and recipients of transactions channeled or handled by them through SWIFT or other international transfer facilitators (see my earlier blog). And most banks outside of Europe, the United States and other OECD countries, still do not require, or verify, such information. The fact is that there is really very little privacy today when it comes to the international transfer of funds. That is why criminal networks, money launderers and terrorist groups have increasingly turned to Hawalas and cash couriers for such transactions. June 23, 2006 09:35 PM Original Here I remember watching a documentary on Hawalas and cash couriers for such transactions years ago myself.