[Congressional Record (Bound Edition), Volume 149 (2003), Part 20]
[Senate]
[Pages 28516-28517]
[From the U.S. Government Publishing Office, www.gpo.gov]




(At the request of Mr. DASCHLE, the following statement was ordered to 
                       be printed in the Record.)


                 money laundering in syria and lebanon

 Mr. KERRY. Mr. President, while I support the enactment of the 
Syria Accountability Act, I am disappointed this legislation does not 
contain any provisions to stop the scourge of money laundering from 
Syria and Lebanon.
  Recently published reports state that $3 billion from Saddam 
Hussein's Iraqi regime are currently being held in Syrian-controlled 
banks in Syria and Lebanon and that these funds may have been used to 
finance attacks on American forces in Iraq. If these allegations are 
proven correct, then the actions by the government of Syria are 
intolerable and unacceptable and demand a strong response by the United 
States government to insure that funds stolen from the Iraqi people are 
not used to help insurgents attack American forces and destabilize 
Iraq.
  Unfortunately, Syria and Lebanon have had a long history of being 
involved in terrorism and money laundering. The Secretary of State has 
designated Syria as a state whose government repeatedly provided 
support for acts of international terrorism and has provided designated 
foreign terrorist organizations, such as Hamas and Hizballah, with 
sanctuary. The State Department in its March 2003 International 
Narcotics Control Strategy Report--INCSR--has classified Syria as a 
country to be monitored for potential money laundering.
  Lebanon remains one of the more sophisticated and well-capitalized 
banking sectors in the Middle East. With its tradition of bank secrecy, 
the extensive use of foreign currency, the influx of remittances from 
expatriated workers, and a lack of financial accountability and 
enforcement, Lebanon has developed a financial environment conducive to 
laundering the financial proceeds of international crimes such as

[[Page 28517]]

narcotics, counterfeiting and smuggling. The International Narcotics 
Control Strategy Report--INCSR--has designated Lebanon as a 
jurisdiction of primary money laundering concern. The Financial Crime 
Enforcement Network--FinCEN--has conducted an analysis of the 
Suspicious Activity Reporting System--SAR--related to Lebanon for the 
period of January 2002 through October 2003. The FinCEN analysis has 
revealed 286 SARs that could be linked to transactions associated with 
suspicious or fraudulent wire transfer activities between Lebanon and 
other countries. Many of these transactions were structured in an 
attempt to avoid reporting requirements. Two of the reports indicate 
possible terrorist activities.
  The United States has the largest and most accessible economic 
marketplace in the world. Foreign financial institutions and 
jurisdictions must have unfettered access to markets to effectively 
work within the international economic system.
  In 2000, I introduced legislation that became Section 311 of the USA 
PATRIOT Act which provides the federal government with the authority to 
leverage the power of United States financial markets to force 
countries like Syria and Lebanon to reform and enforce their counter-
money laundering and counter-terrorist financing laws. Section 311 
provides the Secretary of the Treasury with measures that are 
graduated, discretionary, and targeted, focusing on international 
transactions involving criminal proceeds, while allowing legitimate 
international commerce to continue unimpeded.
  Earlier this year, I sent a letter to President Bush asking him to 
direct the Secretary of the Treasury to identify both Syria and Lebanon 
as primary money laundering concerns under the authority provided in 
Section 311. I also asked that U.S. financial institutions be required 
to provide enhanced scrutiny of financial transactions from Syria and 
Lebanon to ensure funds linked to international terrorists do not 
originate from or pass through financial institutions in those 
countries on their way to the United States
  I also call on the President to develop an international strategy to 
stop the laundering of funds from Syria and Lebanon within the 
framework of the Financial Action Task Force--FATF, the European Union, 
the G-8, and other multilateral forums.
  I strongly believe that the United States must take any and all 
necessary measures to stop international terrorist organizations--such 
as Hamas and Hizballah--and former members of the Iraqi government who 
may be residing in Syria, Lebanon, and other countries in the area from 
supporting terrorist activities in Iraq and elsewhere.
  If the United States is to lead the world in the fight against 
terror, we must effectively use our own laws to cut off the flow of 
laundered funds from terrorist groups through the international 
financial system. The measured use of Section 311 authority against 
Syria and Lebanon provides the United States an opportunity to 
demonstrate leadership in the fight against international terrorism and 
money laundering. We cannot afford to fail in this endeavor.

                          ____________________