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