U.S. Sens. Jack Reed (D-RI), Mark Warner (D-VA), Mike Rounds (R-SD), and Mitt Romney (R-UT) are taking steps to disrupt and eradicate the illicit financial networks of terrorist organizations.
The senators introduced the Terrorism Financing Prevention Act (S. 3441) would broaden the U.S. Treasury Department’s sanctions powers to cover more terrorist groups and provide Treasury with more resources to address crypto funding. Specifically, it would expand the sanction authority to cover all U.S.-designated Foreign Terrorist Organizations (FTOs), including Hamas, and other foreign parties that are controlled by or act on behalf of those FTOs. Currently, these sanctions are imposed only in limited circumstances, primarily on the terrorist group Hezbollah following passage of the Hizballah International Financing Prevention Act in 2015.
“The Terrorism Financing Prevention Act will make sure that the Treasury Department has the tools necessary to enforce our sanctions against Hamas and other terror groups,” Warner said.
Under the terms of the bill, the Treasury is required to identify any foreign bank or foreign digital asset transaction facilitator that knowingly facilitates transactions with an FTO or related party. Once these actors are identified, the bill requires imposition of sanctions on them, restricting either their use of U.S. correspondent bank accounts, or barring their digital asset or other transactions with U.S. persons — in the case of a digital asset transaction facilitator.
“It is critical that the Department of the Treasury has the necessary counter-terrorism tools to combat modern threats,” Rounds said. “The Terrorism Financing Prevention Act takes commonsense steps toward rooting out terrorism by sanctioning foreign financial institutions and foreign digital asset companies that assist them in committing these heinous acts. Cutting off funding for terrorist organizations at the source will save lives.”
Further, the bill contains a key provision from the Crypto-Asset National Security Enhancement and Enforcement Act that the senators previously introduced together. This provision gives FinCEN authority to restrict transactions with “primary money laundering concerns” that do not involve a U.S. correspondent bank account. It will provide FinCEN with appropriate tools to address threats involving digital assets and non-traditional finance networks.
“It is critical to bolster the Treasury Department’s tools to protect our national and economic security. With this bill, we are forcing foreign financial institutions and foreign crypto firms to choose between doing business with terrorist organizations or maintaining access to the U.S. financial system,” Reed said.
The Terrorism Financing Prevention Act also authorizes the resources the Treasury Department needs to carry out these programs.
“The October 7 attacks on Israel perpetrated by Hamas have made it more urgent and necessary for the U.S. to counter the role that cryptocurrency plays in the financing of terrorism. Our legislation would expand financial sanctions to cover all terrorist organizations—including Hamas—and it would equip the Treasury Department with additional resources to counter terrorism and address emerging threats involving digital assets,” Romney said.