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Global Implications of U.S. Anti-Terrorism Law
October 29, 2001
Summary
In an effort to dismantle the financial underpinnings of international terrorism, the United States is cracking down on global money laundering. But stricter international controls on banking and greater scrutiny in the financial sector could backfire, triggering corruption scandals around the globe. Greater transparency and enforcement will also prompt terrorist groups, drug traffickers and criminal organizations to strengthen cooperation and establish more informal laundering networks.
Analysis
U.S. President George W. Bush on Oct. 26 signed into law a sweeping anti-terrorism bill, which will tighten controls on banking and financial networks and expand the investigation into money-laundering rings believed to be used by the perpetrators of the Sept. 11 attacks. By making it tougher to launder illicit funds through Western institutions, Washington is attempting to dismantle the financial underpinnings of international terrorism.
But placing greater controls on U.S. banks -- and by extension, their foreign counterparts -- could drastically alter the landscape of international finance. A U.S.-led investigation into global money laundering could uncover corruption in businesses and governments around the world. The measures will also drive those involved in illegal activity deeper underground.
Both outcomes could have far-reaching effects. Stricter banking regulations will complicate international financial transactions, for example. Greater demands for transparency in the United States could prompt foreign banks to seek alternatives to U.S. financing and cut into the U.S. banking sector's global market share. Companies such as Citibank and Bank of America will be forced to comply with new banking laws that their foreign counterparts may resist, and this would drive a wedge between the U.S. and foreign financial markets.
(The Rest of the Story)
(c) 2001 Stratfor, Inc.
Dan
Global Implications of U.S. Anti-Terrorism Law . . .