Governments, Not Banks, Should Monitor Charities for Terror Ties, Says Ex-IMF Official

By Brian Orsak and Matt Squire

Financial institutions shouldn't be held responsible for identifying charities linked to terrorists, said a former International Monetary Fund agent who helped draft international counter-terrorism financing principles. Preliminary results of a World Bank study show that financial institutions don't have enough resources to uncover transaction patterns that would suggest links to terrorists, said Richard Gordon, a professor at Case Western Reserve University in Cleveland, who conducted the study. In most terrorist cases, money is passed through charities in small amounts, said Gordon, speaking Tuesday at an anti-money laundering compliance conference in Washington, D.C. Because monitoring a charity's transaction patterns won't effectively...