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CNN LIVE EVENT/SPECIAL

America's New War: Terrorist Money Trail

Aired October 1, 2001 - 06:42   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Osama bin Laden is a shadowy figure, and following the money trail to the suspected terrorist mastermind can be even more elusive.

CAROL LIN, CNN ANCHOR: Boy, that's especially true in Asia, where CNN's Lisa Barron reports the money trail often goes underground and under the table.

(BEGIN VIDEOTAPE)

LISA BARRON, CNN CORRESPONDENT (voice-over): In an area of the world where money can move in many mysterious ways, the United States may find good intentions are not enough to pinch off the flow of funds to terrorism.

In Asia, money-laundering laws often are lax, and under-the-table transactions are common. Take the Philippines as one example.

GLENDA GLORIA, AUTHOR, "THE CRESCENT MOON": As far as money laundering is concerned, that would be the worst case, would be the Philippines. And we're not just talking here of terrorists from the Middle East. Money is being laundered here by public officials.

BARRON: Until now, the lack of a law against money laundering has prevented the Philippines from even investigating potentially shady transactions. Hong Kong may offer more hope.

SAMUEL PORTEOUS, M.D. KROLL ASSOCIATES: Hong Kong is a financial hub for Asia, so to the extent there's terrorist activity and funds moving through the region, it's very likely they're coming through Hong Kong. Bin Laden has been said to have outlets in the Philippines, Indonesia, and Malaysia.

BARRON: Hong Kong officials say the territory is ready to freeze any of bin Laden's or his associates' assets it finds once new regulations are drawn up in October.

(on camera): But regulations can't govern the underground banking system prevalent in South Asia and the Middle East. It's called the hawallah (ph), a trust-based system involving local brokers in different countries. Money never crosses borders. Instructions to pay and receive do.

BARRY RIDER, INSTITUTE OF ADVANCED LEGAL STUDIES: The only agency, really, in the world that's had any great success is the directed revenue intelligence in India. Now, and frankly, there's not the expertise in traditional law enforcement agencies to pursue these inquiries.

BARRON: Extraordinary times, say experts, require extraordinary measures.

STEPHEN VICKERS, PRICE WATERHOUSE COOPERS: And this is, in fact, an attempt to cut off the oxygen, as it were, to organizations. So that bridge, I think, needs to probably be attacked from two ends. One is the traditional follow-the, follow-the-money, money end, and the other is through the investigative end and intelligence aspect.

NEIL MALONEY, HILL AND ASSOCIATES: Intelligence is a key to it, intelligence and long-term planning and long-term targeting of the right people. But it takes -- it's a very expensive process to go through, and you need to put -- it's not a question of when you think of an undercover operation, sending somebody in and that's it, and it comes back a month later with all the evidence. It doesn't work like that.

BARRON: But with the cooperation and the will, say experts, it's possible to make significant advances in the economic war on terrorism, hopes that from these ashes, the evil acts perpetrated here will never again come to be.

Lisa Barron, CNN, Hong Kong.

(END VIDEOTAPE)

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