How Banks Freeze Terrorist Founds With A Free, Public, .TXT

A text file. That’s what banks use to freeze the assets of terrorists, drug traffickers, and nuclear weapons dealers. A dot txt downloadable from the U.S. Treasury website.

Let’s find out how it works, and what to do if your credit report says you’re a terrorist…


OFAC!

The US government uses the Office of Foreign Assets Control (OFAC), created in 1950, to staunch the flow of banking transactions. OFAC’s primary asset freezing tool is the Specially Designated Nationals (SDN) list. This list is a database of foreign individuals and groups known for narcotics trafficking, WMD proliferation, and acts of terrorism.

And anyone can download it free from the OFAC website!

“All Financial Roads Lead to New York”

In a public Senate hearing on September 12, 2006, the director of OFAC, Adam Szubin, explained that nearly every financial transaction in the world passes through the US at some point. Section 326 of the 2001 Patriot Act mandates US banks to update their account holder software to jive with the SDN. Any transaction with a name matching a name on the SDN gets stopped and reported to OFAC. Easy-peasy.

Furthermore, Szubin said, countries often adopt OFAC sanctions to avoid doing business with international terrorists. Citing Kuwait and Latvia as two examples of countries voluntarily adopting SDN screening, Szubin declared that tOFAC’s list runs, “across the computer screens of banks around the world.”

However, to avoid OFAC, terrorist financiers can try circulating funds through a few non-SDN complaint countries and banks. Alternatively, they can look up their name on the SDN and make sure to use one not on the list.

On the SDN one finds terrorist celebrities like Saddam Hussein, various Al-Qaeda party members, and Osama Bin Laden. Each has a designation code. Bin Laden ranks a SDT and SDGT for “Specially Designated Terrorist” and “Specially Designated Global Terrorist.”

SDN CODES

 SDNT – Specially Designated Narcotics Trafficker
 SDNTK – Specially Designated Narcotics Trafficker Kingpin
 BPI-SDNTK – Blocked Property and Interests SDNTK
 SDT – Specially Designated Terrorist
 SDGT – Specially Designated Global Terrorists
 NPWMD – Non-Proliferation Weapons of Mass Destruction
 FTO – Foreign Terrorist Organization

(This could be incorporated into some kind of Myspace pass-along. What kind of terrorist are you?)

A Terrorist by Any Other Name

Credit reporting agencies also adopted OFAC measures. This helps prevent terrorists from refinancing their home. It can also mean a headache if your name is similar to one on the SDN.

On Sept. 5, 2006, The Arcata Eye news reported that a man who shared a similar name to one of Saddam Hussein’s less ambitious sons, Ali Saddam Hussein, was denied a home loan on the basis of the SDN match. The Arcatan’s name was “Hassan.”

A section in OFAC’s online FAQ, “What Is This OFAC Information On My Credit Report?” advises that if your credit report indicates an SDN match:

    This does not necessarily mean that someone is illegally using your social security number or that you have bad credit. It is merely a reminder to the person checking your credit that he or she should verify whether you are the individual on the SDN list by comparing your information to the OFAC information. If you are not the individual on the SDN list, the person checking your credit should disregard the OFAC alert, and there is no need to contact OFAC.”

If this a false match, you can request its removal by contacting the credit bureau(s) and reporting the false information, the same as any old piece of credit report misinformation.

Otherwise, if you have the misfortune to have a name similar to one on the SDN list, just hope that your lender has more of a backbone than Hassan’s. Or, change your name. — BEN POPKEN

Comments

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  1. Keter says:

    Moral of the story that the bad guys already know: Pay cash and avoid the hassles. ;o)

    I just can’t imagine a real drug trafficker would need a consumer loan, or a foreign terrorist organization would take out a home equity loan.

  2. MonsieurBon says:

    I think it’s probably OK for them to remove “HUSSAIN, Saddam” from the list now, what with him bein’ dead and all.

  3. Amy Alkon says:

    Perhaps somebody can help me with this question. I’ve become friends with a homeless guy named Gary Musselman. He’s a fantastic artist, and after I wrote a bit about him up on my blog, he started getting offers for his work from all over the world. They don’t come often enough, because he can’t properly advertise his work since he doesn’t have a bank account and can’t take PayPal.

    But, last week, most amazingly, a guy in France sent him $500! for two drawings. A guy who works at the Starbucks out of which the artist does his work most generously took the money through his PayPal account and gave Gary, the artist, the cash.

    I helped Gary get his Illinois birth certificate (a certified copy), and bugged him until he got a California non-driver ID via the DMV. We went last week to open a bank account for him (at Cal Fed in Santa Monica), and they refused to allow him to do it.

    They said, because of the Patriot Act, he needs two pieces of ID — that the birth certificate didn’t work. He had to have a credit card! (duh, I wonder why he doesn’t?), a gun permit (please! He’s working with markers, and the bank employees know him from Starbucks — he isn’t off with the swells at some gun range practicing his marksmanship!), etc.

    He’s really talented, and *this* close to being able to put his life back together again and earn a living from his art, and he’s harder working than many people who have roofs over their head. Can anybody offer any advice?

  4. Amy:

    This website is informative regarding the “Customer Identification Program” requirements of the Patriot Act:

    http://www.gcglaw.com/resources/financial/identification.h

    Specifically, if your friend can get a copy of a social security number (or taxpayer ID) of some sort then he’ll be in better shape along with his California state ID. Once everything is in order, I wouldn’t go back to that same bank though.

    The bank’s are within their power to implement harsher restrictions on people of whom they have a doubt as to their identity… so you’ll want to do everything in your power to make it seem like there shouldn’t be any doubt. Address of where he lives (use yours if need be), etc.. everything should be in straight order– and the words “homeless” should never leave your mouth.

    It should just be calm and casual, and with no indication that he ever lived a transient lifestyle or that he’s getting his life “in order”.

  5. Amy Alkon says:

    Thank you very much.

    As for not patronizing that bank, because he’s “unhoused,” and doesn’t have transportation, this is the best bank for him vis a vis where he hangs.

    Your advice is very good, and a great woman from Colorado sent me tips based on my posting here.

    About the ss card, they said that wasn’t enough. Unbelievable. I did pull something that suggests somebody without 12 forms of ID and a loan on a BMW can be verified through some stricter protocol.

    Really appreciate your input.

  6. Just last week some clueless manager tried quoting the patriot act requiring him to force me to offer a fingerprint for the purpose of cashing a check.

    I wasnt even opening an account and I produced a check stub, passport, drivers license, student id card, library card, identification badge from place of employment, hack license (cabbie for those who dont know what a hack license is), expired temporary id, and was told that they would not honor the terms of the cheque because the patriot act forbid it. Anyone else get that line? It seems as if there is an urban legend being passed around through bank management and they are basing their policies on hearsay.

    Because without my fingerprint, they could not prove who I said I was. I should have offered to photocopy all those documents for them. I even had my biological father there vouching for who I was. I must make a resolution to always carry a tape recorder.

  7. Amy Alkon says:

    I was wondering if there was a real standard or if it was crap. Very hard to find the passage online — although, to be fair, I’m on my column deadline plus a couple more at the same time, so I wasn’t looking for hours.

    I wonder if there’s some clear stating of that the law is somewhere out there?

  8. If it’s good enough for Google, there’s no reason the feds shouldn’t use flat files.

  9. Hasan:

    That’s awesome… :>