hosted by the arab gulf states institute in washington, d.c. this is an hour and a half. >> good afternoon, everyone. my name is marcello arwab, president of the arab state gulf institute. i would like to welcome you today's program on financing terrorism, on the many aspects of the fight against terrorism, cutting off the financial flow is most critical. it is the oxygen that keeps these groups alive and allows them to recruit, control territory, plan and carry out violent operations on a global level. the issue of terrorist financing also obviously as a dissenter of the current crisis in the gcc and it remains a top priority for the u.s. as we seek to defeat islamic state and other terrorist groups. the u.s. and its gulf arab

partners have taken significant steps to stem the flow of funds to terrorist groups over the past 15 years. really a robust effort since 9/11. however, despite the various measures and regulations put in place, terrorist organizations continue to generate income from the region to finance their activities. what more can be done regionally and globally to stem the flow of money to violent extremists? we have a very distinguished panel with us today to answer that question and explore all of the issues related to it. i'm pleased to welcome our gust speaker juan zorata, david cohen and kate bauer as well as our own executive vice president ambassador steve flesh who will introduce the program and moderate the program. again, welcome and look forward to a good discussion today. thank you. >> thank you so much, marcelle.

good afternoon and welcome everyone. i'm pleased to be able to moderate this discussion and i'm very, very happy to have such distinguished colleagues with me to help enlighten us on this subject as marcelle said, one of critical interest and one of a timely nature at the moment given events in the region and here in washington as well. my introduction can be short. you can look for greater detail in the handy programs that were on your chair when you walked in, but allow me to please just briefly introduce kate bauer, who is the bloomingstein fellow at the washington state institute and a former treasury official that served as the department's atake shea in jerusalem and in the gulf region. to her right is david cohen, former deputy director of the central intelligence agency and better known to me in his role at treasury before he joined the cia when he was under secretary for terrorism and financial intelligence. david zoratay, chairman and co-founder of the financial

integrity network. i knew juan when he worked as deputy assistant to the president and deputy national security adviser for combatting terrorism from 2005 until 2009. again, further details available here, but for the sake of time at our disposal we will get on with the conversation. what i would like to be able to do is perhaps give each of our guests a chance to look at what the issue maybe in a larger sense or a larger framing sense may be here. i will ask them a question, they can all respond to it and focus on whatever issues or angles they see as most productive. i'm hoping we can get at it from different angles and develop a full picture of what we see in the gulf. we will do it in reversal pta bet cal -- alphabetical order. what is the extent of

financialing with the gulf states collectively bilaterally and is the cooperation at risk because of the deep fissures we steel developing among the states at the moment? >> thank you very much. i want to thank you and marcelle and the arab gulf states, the institute, for the invitation to be here. i count myself as fortunate to have learned and been in government when you both were serving. to have learned at your feet was a great honor, and to have learned with david and kate as well. so i'm privileged to be here. i'm probably the least of the experts here but i'm happy to contribute as i can. i think there's been a natural evolution to the counter terrorist, financing counterterrorism cooperation between the u.s. and our gulf allies, and it obviously started post 9/11 with a dramatic focus on a much more preventive framework for dealing with illicit funds and illicit support to terrorist organizations. in many ways the early days of

that cooperation was remedying or dealing with pre-9/11 framework for how the gulf was dealing with groups that were either tied to al qaeda or those that were supporting them. it is no secret and certainly it has been the subject of lots of conferences and reports as to how we dealt with sauldy ardi a dealing with the reality of deep pocket donors that were supportive of al qaeda prior to 9/11, charities which became a main topic of interest for the u.s. and our allies, and putting in place the tools and strategies to allow us to prevent groups like al qaeda from gaining support and financing from if gulf. that has been a story with many chapters to it, but the bottom line is the u.s. has relied very heavily on that cooperation over time, one that has matured

both in terms of how we deal with financial intelligence, which david can speak to better than anybody, what we have done in preventive terms to actually create systems that don't allow rogue capital to enter the system, at least theoretically. dealing with state sponsorship questions, making sure there's clarity that states should not find or create mechanisms to support terrorist groups, and then trying to find ways of jointly acting against targets that we have found to be supporting terrorist groups. so in the early days post 9/11, we had a number of joint designations with the kingdom of saudi arabia. that has followed in course. we've had continuous efforts in that same vain including with qatar in recent years thanks to the work of the u.s. treasury. so there has been an evolution to actually focus on this in a fundamental way, and the one thing i would say -- and this

goes to marcelle's point at the introduction -- these issues actually are more fundamental and more important now than ever before, not just because they form part of the political rift but because the issues of how groups like al qaeda, group like daesh, other successor groups are raising funds in a global network is more critical than ever before. there's been much in the literature about the folly of following the money or trying to deal with terrorist financing and i think it is the exact opposite. it is more fundamental to think how these types of groups gain support, are able to sustain themselves and actually are able to build their networks and global ambitions because of the financing that they have. that's why these issues are so important in the gulf today. in terms of the rift, it is clear to me from an american standpoint the rift is a burden

and a barrier to cooperation. we have bit our counter terrorist financing and counterterrorism play book around the idea that we need strong cooperative allies on the ground, not just in the bilateral context but in a regi regional context. when we have had the most success in this regard, and you know it well in your work in particular in yemen and elsewhere, where we had the most success has been when like minded allies are working together to gather intelligence and information, gather around a common strategy and mission, and then figuring out where there's a division of labor around the kinds of actions that need to be taken to deter, disrupt and dismantle terrorist financing network. to the extent that this rift doesn't allow that to happen, to the extent that it creates levels of mistrust, to the extent that it ruptures elements of information sharing, that is

all not good from an american perspective. i think anything we can do to try to repair the relationship, to try to focus on the mission of preventing terrorist financing is critical. lots of complications, of course, as to how you define terrorism. what we mean by terrorist financing, what we mean by state sponsorship, all of those issues are implicated by the rift, but i think fundamentally from an american perspective there's a need to have global, regional and in the case of the gulf states gcc level cooperation to deal with what is still a critical national and international security issue. >> thank you so much. you raised a couple of entrusting points we will get back to, one of which is the evolving financial model so many organizations are pursuing now as well as a collective gcc versus a bilateral cooperation and how that breaks down on the ground. with that in mind, let me go over to david and ask you, david, for your view on this.

>> thank you, steve. thank you, marcelle, for inviting me to be here, you know, as two former ambassadors who have done great work, i think it is worth at the outset noting how important it is that we have a strong and fully functioning and fully staffed state department. this is an advertisement for the treasury department or all former treasury officials, the work that we've been able to do in countering terrorist financing not to mention many other areas is enormously dependent on having a state department that's out there fully empowered and fully functioning. so -- can applaud. so just a couple of quick thoughts, picking up on what juan was saying.

the efforts to combat terrorist financing, i came to the treasury department in 2009 at a point where juan and his team with stuart levy and others at treasury had made enormous amount of progress in combatting what was post-9/11 is principal funding, which was funding coming out of saudi arabia. he said if he could snap his fingers and stop terrorist financing in saudi arabia it would make all of the difference, it actually did not make him popular with the ambassador to saudi arabia at the time. by the time i got there in 2009 the saudis shifted quite significantly in their perspective on this issue and in their willingness and ability to work with the u.s. i then had the opportunity to try to build on those efforts.

what we did in my ten-year treasury, which spanned from '09 to '15 was principally to work bilateral. i think this bears on the question of how important it is for there to be a unified gcc by and large with some very minor exceptions all of the efforts that we undertook were bilateral with the saudis, with the emirates, with the bahrainis and c qataris. the sharing of intelligence information which is critical to be able to identify who the terrorist and financiers are, how they're raising and moving their money, that also tended to be -- i think exclusively is probably the right word, they're exclusively bilateral. the only exception in my

recollection was we made some effort to enlist the saudis to work with us in sort of a t trilateral fashion with the can you waitis and qataris. i remember a couple of locations where we would be in saudi speaking with the folks who were most important in the finance ministry there on the terrorist financing issue, we tried to get them to -- essentially to put pressure with us on the qataris and the kuwaitis. that did not work so well. i think it was for a variety of reasons, but working in a trilateral fashion and working in the gcc more -- more broadly was not something that we really tried to -- tried to pursue.

so i -- so the current situation in the gulf right now where you see what i think is a real potential for the gcc to splinter and for qatar to go its way and the saudis may go their way and with the other states sort of falling in line, think that itself isn't the problem. i think the bigger problem is you have qatar which had been making some progress in recent years in prosecuting terrorist financiers and being a little bit more forward leaning in its efforts no longer feeling that it is in the club, inside the tent, and we lose a little bit of the moralist equation that comes from a combined effort of folks in the gulf. that's what i'm worried about in the current situation, is that you'll -- the progress we have seen with the qataris in the last couple of years, which

has been hard won, lots of effort from treasury and from state and others to move the qataris along, that that will begin to recede. i will make one final point, we can pick up on it later, the other thing you all know happened recently in the gulf that i think has significant implications to the future of terrorist financing is the switch in crown prince. he has been ousted not only from his crown prince position but from minister of the interior. he was a stalwart partner of the united states in combatting terrorist financing and bringing saudi arabia to a point where it was doing quite a good job across the board in combatting terrorist financing. with him no longer in position in the interior ministry and no longer really in position in the

government, we have lost -- the united states has lost a key partner in this effort. i think that's -- that is something that we need to watch very carefully. you know, it was obviously not him by himself, but his position in that -- in that family, his position in that government was enormously important. on the other hand, mohamad ben salmon who doesn't have much of a track record in the terrorist financing arena but does promise some modernization in saudi arabia, both economic and, you know, potentially the role of the clerical establishment and the hard core wahhibi approach that you're all familiar with that the saudis have been promulgating around the world. if he is successful in moderating that to some extent, that could have a beneficial impact in terrorist financing, not just in saudi but more

broadly around the arab world. so why don't i stop there. >> great, thank you, david. we will get back to this question, dynamics between states, maybe even within states as our conversation proceeds. kate, over to you. you can assess for us the risk you see and opportunities, if there are any we haven't recognized. >> great. first, thank you to ambassador session for hosting this panel and inviting me to join. i am really joined to be up here with these who have been great friends and mentors over many years. i have to say, speaking out for the two of them, i have to agree with, you know, a lot of what they said. i think i'm going to find a couple of points to push on a little bit. i think that, you know, i agree with david that saudi arabia and the uae have sought for years to kind of galvanize qatari action

against the terrorist financiers that were operating and continue to operate in qatar, and they felt that there's a sense that the qataris don't share the same threat perception as saudi and the uae. this is in a way, this desire to pursuit at different times what were multi-lateral attempts, whether the trilateral attempts that david mention or in other iterations, gcc joint efforts to designate hezbollah as a terrorist organization and have implementing mechanisms that went along with that, commitments that were made at the camp david summit under the obama administration to pursue multi-lateral joint efforts on counter terrorist financing and iranian activity in the region, these desires to bring the gulf states together to try to get a more common threat perception

associated with this activity. the repeated kind of inability to do that is reflected in the current risk. so that's how it is a part of this current risk as well. i think that it is important to note that qatar has taken some action against terrorist financing, as david said as well, that they've taken action both against individuals. you know, they said u.n. listed individuals, that their assets have been frozen, that there's travel bans in place, and that there have been some prosecutions and also systematically they've passed legislation to better regulation securities, to better regulate fiber activity to criminalize certain types of fundraising or expression on social media. but that there are few signs of what specific actions they've taken under this legislation or really a lot of details about what prosecutions or other law enforcement efforts there have

been. i think that's wherein lies an opportunity out of the thrift and the role that saudi and uae partially through the list that they published a couple of weeks go after -- i think it was 49 individuals and a number of entities, herein i think lies an tu opportunity to continue to press qatar to continue to act against, first of all, the u.n. designated individuals, to act and make sure they're no longer able to actively finance or facilitate in qatar. i think one option, one good thing that qatar implemented or adopted an anti-terrorism entity and it is placed in the interior ministry, that this committee actually has the ability to designate terrorist financiers beyond what is at the u.n. and that provocation of such a list by qatar could help clarify some

of the actions or some of the unclear signals that you see when you really dig into what -- for example, the state department has said on one hand that qatar shut down a charity linked to al qaeda in syria in 2015, but then just this march in a designation released, designation of actually a kuwaiti individual, a financier that he was working with the individual who are run that qatari charity. so despite the fact that the charity has been shut down, that individual continues to finance -- or to facilitate terrorist financing activities. so i think that there's a lot of unclear signals and an opportunity to get some clarity on that. >> thank you very much, kate. let me for a moment just kind of open it up here a little bit more broadly and see if i can't bring in a little bit of what washington's thinking may be.

at least one other regional player that's on our minds as well, and marcelle noted in her introductory remarks there's a lot of interest in the white house on counter terrorist financing. it was interesting the other day the readout the white house issued after president trump spoke to regional leaders on july 2nd. there were five sentences and two mentions were made of his decisive focus on counter terrorist financing. so it is clearly on his mind. my question is we hear the rhetoric, do we detect a change in focus or policy on the ground that will distinguish this white house approach to counter terrorist financing from, say, his predecessor or others and to what extent do we see this targeting iran since iran is largely on the president's mind when he looks at the arab gulf and beyond there in the persian gulf area, what about that? do we see any shifts we can detect at the moment or is it still too early to know? i'll invite juan if you want to start with that.

>> to me it is incredibly refreshing because, remember, i started back before 9/11 at the treasury where it was heart to get a seat at the table when talking about these issues. and to see both through the bush administration, the obama administration and now the trump administration the centrality for terrorist financing, in many ways for those of you who are believers in this it is very heartening. the fact it was a part of the president's recent visit in saudi arabia, again a testament to these themes and issues. i think first and foremost, the fact it is a regional perspective, perhaps not all together different from the obama and bush administration, but the fact they came out of the box so strong and full throated around the issue of terrorist financing is significant because it does put a marker down this will be an issue that the administration, even if they don't have an articulated strategy yet, will have to contend with and grapple

with over time in some complicated ways. the other thing that i think is interesting is that -- and i have argued this for a long time. the focus on terrorist financing and illicit finance emerges very important, often thorny strategic and diplomatic issue. often things that have been happening but are forced to the surface because of the focus on terrorist financing. so how do we think of the muslim brotherhood? this is something we grappled with right after 9/11. something i mentioned in my book by the way, do we designate thi as a terrorist because of his support to the family of the suicide bombers. the decision at the time was we were going to look at the muslim brotherhood through a variety of lens to see where it was to see if they were supporting militant and terrorist causes, and where that occurred we weren't going to turn a blind eye.

we were going to go after it. the same goes with the question of wahahbi funding outside of the borders of the kingdom, and in places like central asia, southeast asia. those were questions that emerge willed not because we wanted to create tension with saudi arabia but because we were looking at the landscape through the lens of terrorist financing. how do you think about charity in places of extreme need, places like gaza, places like syria, places like east africa where we know terrorist groups have exploited those sources of funds but where we know we need charities to hit ground and help people in dire need. that's a fundamental question. the fundamental question now for how we think of gulf support. how do we think about state sponsorship? what does that mean and what does it mean from an iranian perspective. my hope, steve, is what you see emerging out of this sort of tension from the administration is not just dealing with the

tactical fault, the money dimensions of who is a terrorist, how do you agrrrest them, but how do you deal with this fundamental issues. again, the people you have on the inside like h.r. mcmaster, secretary mattis, dina powell who dealt with these issues before -- we worked with her before on some of these issues when she was at the state department -- i'm hopeful that means there will be a serious focus on the more fundamental issues tied to the question of terrorist financing. >> great. thank you. juan. david orr ka kate, any thoughtwt you saw from the administration? >> i think there's a signal in the rollout of this threat finance targeting center, which was one of the key deliverables of the summit in riyadh, that it is a signal both of the importance to the gulf states but also to this administration.

i think along with that you've seen a pretty smooth transition in terms of the leadership of dif terrorism and intelligence division that david headed previously. so i think you have a team in the treasury building that's ready to work with the white house, that's ready to use these sorts of tools. but in a lot of fronts, you know, where sanctions more broadly, not just counter terrorist sanctions can be used, it is important to have the policy framework in place as well because these are tactical measures that need to be enacted in support of a broader policy. i think when you look at their -- how they might be applied in the context of iran or syria or other issues, there needs to be a focus on the policy framework as well. >> okay. thank you. >> i'll be somewhat less optimistic on this score.

i think what we have seen is an embrace -- a little bit of a victim of our own success, but the administration came in, they saw terrorist financing, they saw sanctions as a widely successful, easy to use tool, and they've embraced it. they understand it. the terrorist financing tracking sensor that was established with a lot of fanfare with the orb in riyadh was -- you know, was a big move. but i think it is -- i think there's reason to be concerned that what we have seen thus far with the administration is an embrace without the policy thought that goes behind it. i actually not surprisingly agree with both kate and juan on

the idea that having a policy framework is critically important, and that addressing terrorist financing issues should force you to address things like the role of wahabiism around the world. i think we have seen the administration giving an extraordinarily strong embrace of the saudis without a lot of nuance to how that embrace may -- may implicate issues that are potentially juundermining o our broader efforts. i think it very much remains to be seen what the administration embrace of the terrorist financing issue is one that speaks to a sort of broader policy framework that's going to be effective or is just grabbing on to something that was sort of

low hanging fruit. >> and if you -- >> can i feed off of that? >> yes. >> david raises a really important point. there is real danger in this rift obviously, and if it is persistent, if the scars are deep, if trust is sort of destroyed, there's a real problem. there is a silver lining though. it relates to kind of how washington relates to this issue because to the extent that the gulf countries are grappling with these questions on their own, or at least in this context -- now, this is messy and problematic, but to the extent they are setting out sort of demand for themselves. they've been putting out demands for the qataris. there's reflection back, so they're serious questions not only for the qataris to answer but for the kuwaitis that were subject to treasury action when david and kate were there, just as often as qatari nationals were subject to the actions.

kuwaiti charities and institutions were problematic. questions with its trade with iran with put in play. there's a dimension of silver lining here, and the ownership of these issues really for the first time by these countries -- because one of the consistent critiques we have had, most of the time if it is not a tactical paris attack or immediate issue, on these themes gulf allies have largely been reactive. they've waited for the u.s. to come with information, they've waited for an indictment to sort of be put out and information shared, they've waited for u.n. action. their request is, well, show us the information and then we will act. this may be a moment that we've all hoped for, which is at some point countries around the world have to take ownership and have to try not only to discover these issues on their own but deal with them locally and maybe

even regionally in a proactive way. i think the reflection back is really going to be a serious issue for all of the gcc countries, which is how are saudi arabia, uae, kuwait, bahrain, all dealing with the reality that they have challenges still with respect to terrorist financing, illicit financing, their structure, their financial intelligence, that is going to be a serious question. they've now set the bar not just for qatar but for themselves as well. >> could i add to that? >> i was moping you would. you're making my job really easy. >> i think this is an evolution that i saw during the time i spent in the gulf, 2013 to 2015. i'm going to speak more broadly than just terrorist financing, but i think there were so many dynamics that came into play at the same time. there was on the one handy think a recognition of the value of the sanctions by arab states, arab leagues took action against

syria and had arab league sanctions on syria. there was also kind of the tail end of the global financial crisis and the impact it had on -- i would say in the uae i saw in particular where you had kind of a consolidation of foreign policy in the abu dhabi that was more security minded. the uae benefitted from inflows after the financial crisis, as a result of the arab spring that kind of got its economy back running. c coupled with that the security mindedness and the money flowing through the uae was an awareness that, you know, it was great to have it but if you didn't know where it was coming from it could be proceeds of narcotic trafficking or it could be heads bo hezbollah companies working on procurement more broadly in the region. the other thing i think was somewhat relating is de-krriski

and what you saw is the idea of global banks for a number of reasons because of large enforcement actions were pulling back from jurisdictions or lines of business saw perceived to be higher risk. you saw it in the gulf, and exchange houses was another big one that's a very important aspect of many gulf financial systems because of remittance loads that flow through them. you saw the -- that financial centers and there's, you know, it is a very bank region, there's a little bit of competition between doha and dubai and others to be the regional financial center. their need to maintain these international relationships that they were putting upward pressure on regulators, at the same time the security mindedness of a number of governments were coming around to the value of this as well. so i think that you do see, as juan said, there was a period

there's been an ownership of illicit finance and a need to deal with it by these countries. >> thank you, kate. i'm going to trial to draw in one other thread. that's the financial action task force. david, you've had a lot of experience at treasury with that. i would like to ask you to describe for us if you can the extent of the cooperation that has had, the engagement with the gulf states and is it bilateral, is there a regional aspect, gcc aspect that can take advantage of? how does it shape up and what does it look like? >> for those that are not in the financial weeds, i will take a quick look at the financial action task force. it is a group of countries that came together to establish principles of how governments ought to regulate the financial

sectors and how financial institutions ought to behave to combat money laundering and terrorist financing. it worked through a mutual evaluation process. the members of the organization get together and say, you know, next year we're going to evaluate the uaes or saudis or u.s., actually went through a mutual evaluation recently. their regulatory structure, their enforcement structure, their political structure against these recommendations that fatf has. it works essentially through embarrassment and the issues were reported at the end of the evaluation and you get a score on how well you have done. and if you don't do very well, the fatf will make recommendations on things you should do better and can even recommend that, you know, in extreme cases that counter measures be enact by other countries around the world to protect themselves against the

risks of illicit finance from that jurisdiction. it has been an enormously effective tool for raising around the world the equality of the effort against illicit finance, both money laundering and terrorist financing. in the gulf there are these regional fatf organizations, including one that is affiliated with the main faft. they do mutual evaluations within the gulf region in north africa. it has, you know, the saudis coming in the gulf and saudi [ inaudible ]. the saudis went through one relatively recently, and it has the effect of spotlighting the weak nesses and encouraging

improve -- one of the things we tried to do outside of mutual evaluation episode is to go to these countries and say, here is where your deficiencies are against the fatf recommendations and you need to do better. with kuwait and qatar in particular, part of what we used to do at treasury or they're still doing at treasury is to go to regulators in these jurisdictions and say, here is where you're deficient. that has -- you know, it has had middling success in getting i would say the kuwaitis and qataris to get better. in just one place i digress. in 2014 after a lot of internal debate i -- i gave a speech on terrorist financing where we

called out the qataris and kuwaitis for terrorist financing. that was -- that was done in part out of a judgment that our private engagement for those kind of fees, and private engagement including saying, here is how you're measuring off against the fatf standard, had not achieved over time and calming them out publicly outside of the normal fatf evaluation process, but calling them out in a more bilateral fashion, but a public fashion, for them to act. because doing it privately had [ inaudible ]. hard to know exactly what that exactly accomplished other than i think there.

but i think always after that. but that's another way to use the recommendation as a way to try to encourage better efforts. >> juan, please. >> to add to that, i was fortunate enough to lead our delegation to the inauguration of the middle east/north africa fatf, the regional body david mentioned. it may be one of the last times we talked to the syrians directly there in bahrain, but i think fatf has been enormously successful because you had a group of like minded jurisdictions whether it was fatf proper or regional bodies that are committed at least in theories to find laws and recommendations and being willing to be submitted to evaluation by foreign experts. countries big and small, u.s. all the way to macau are being

evaluated. to david's point with enormous impact, it is the shaming dimension but also the market effects. case point about derisking, the private sector very much looks at these evaluations and asse assessments to under the level of integrity. how good are they at dealing with money laundering and terrorist financing? do they have institutions in place to handle these tugrisks. it is a process enormously effective and it gets the attention of government, that's why it has been a tool of choice for the u.s. government to be able to push governments to improve. it's also why fatf look i haded countries like north korea and iran and put them on a black list for deficiencies in their terrorist financing systems and money laundering, and it is why those countries and iran in

particular is so dead set in getting off the list and dealing with what are the market base and jurisdiction counter measures against the country and against their reinterest graduation into the financial system until they take these steps. a final note on fatf because i think it is going to grow more important, not less, in the future and it is important for the audience to understand. fatf has taughted a new process of evaluation around the question of effectiveness. the effectiveness questions ha can you show me you have a wall put in place against terrorist, do you know how to file reports against terrorist, and we have graduated to the place where you have to have those things in place, but is your system working? is it preventing illicit capital

from entering the system. that's leading to a lot of soul searching in countries. it is leading to a lot of improvements in a rapid way for those countries now being subject to this assessment, and it is also leading to more enforcement action. you are seeing more countries on their own, not prompted by the u.s., they're on their own begin to find banks, hold institutions accountable, bring prosecution precisely to demonstrate to the international community their system can work, it does work and here is the evidence. that's an important process i think is worth keeping in mind. again, the gulf countries have admitted to these principles and these rules that are global principles, both through the mina fatf and the fatf process well. >> thank you. juan. >> i want to turn to kate for a minute because i want to take

advantage of yofield work. you were on the ground. can you describe for us how extensive is the network of u.s. engagement? how many countries were you covering when you were out there? are you all over the gulf? were you a one woman band who had to go from country to country to figure out what the individuals are going to be doing? >> thank you for the question. it is a great question, because i think what we do at the treasury, not just as attache but juan and david as senior officials, that kind of sanctioned diplomacy and engagement with central banks and with their counter park, it is cun of unknown. but in juan's book, the treasury department has a small core of attaches. i think usually about 10 to 12 in the world, so it is very small.

and where the attaches are placed is usually determined by what the priorities are. you know, they're not necessarily seen as permanent positions so as priority shifts resources will be shifted because it is so small and zero sum. the attache program in the gulf was set up i believe in 2008. the first attache was sent out and was in abu dhabi with a depp any in riyadh shortly after. it was augmented i think around 2010, the position in riyadh was made a full attache and the position in abu dhabi took on covering kuwait and qatar as well. then in 2013, which was when i arrived, i was responsible for the gcc minus saudis. and with the deputy in abu dhabi, when i left there was an attache placed in doha with responsibility for qatar and kuwait, which is something i

pushed for, you know, since a lot of the value of having someone forward deployed is the ability to be available and follow up. and it was, yeah, a lot of travel over a couple of years, even though those are short flights. the one to doha was because you land technically before you take off coming from abu dhabi. it is a 45-minute flight. nonetheless, the value in having someone there a lot of times is the ability to be available and to develop, you know, rapport with the counterpart and to the conference on technical issues. i would say throughout the gulf we've had very good relationships with our counterpart in finance ministries and in central banks. again, really connect on those technical levels. the attaches work on policy matters. they work on sanctions implement ak implementation, promoting best practices and standards such as the fatf standard.

in the gulf there's a little technical assistance involved as well, although it is done more so elsewhere where you have lower resource countries would be where the treasury would commit more resources to technical issues. the idea being higher resources, countries can find technical assistance through commercial means or on their own. but it is an important job i think in terms of having that ongoing engagement and being able to facilitate the higher level -- i saw david a lot when i was out in the gulf and needed to know who he should meet with and prepare all the sides. i think it is something facilitated as i mentioned before the number of joint designations which have been done over the years when it is a clear of demonstration of where interests, you know, are. it is a very good public demonstration of how we can find where interests coincide and work together, but there's a lot

more examples that are never made public because i think one thing is, you know, you can't necessarily judge the effectiveness tv counter terrorist financing by designation. there's a lot of reasons designations don't happen and one is because we're able to work quietly. they would disrupt whatever activity we want to see disrupted. >> one of the reasons i asked the question was at one point in this conversation at the gcc, has revealed itself that i think the state department might have suggested that treasury imbed officials within qatar central bank or the finance ministry to procure greater visibility in financial transactions. seems like it is a great idea to me, but is there any fly in the pointment th

ointment or is there a reason we should not consider this? >> i think there's already a treasury presence on the ground there. i would say i am not sure it is necessary to have someone in the central bank of qatar. i think one of the important things that countering terrorist financing is an all government effort because the vulnerabilities are not exclusively in the financial sector. in fact, the state department said in their report on qatar one of the problematic things is the ability of individuals to by pass the formal financial sector. so it involves, you know, working with ministry of interior, customs often, border control, you know, various elements to identify -- a lot of times one of the big challenges in kind of operationalizing counter terrorist financing is seeking what is an intelligence lead and making it -- especially

if it is in -- you know, it is a domestic issue, into a law enforcement action. and so that is not, you know, exclusively or primarily a central bank responsibility, but what the central bank does when it houses the central intelligence unit as it does in qatar, that is an important element of it. because it is getting the financial intelligence community to get information from banks about suspicious activities and that can be very important lead information in that whole process. so there's a role but i don't think it is the most important, and perhaps in qatar perhaps not where that person needs to be but there's already a person on the ground. >> i want to go back to something juan alluded to earlier on and that's kind of the evolving financial model some of the terrorist organizations around the world, certainly in the middle east and syria to a fashion and isil if you will have been using. they themselves have been financing for a long time, using

smuggling of oil and average ti antiquities and kidnappings. how big a threat is that now to arab gulf states to avoid becoming the conduit to where they will look most usefully? >> it is a great question because one of the dangers in particular of the steering conflict is that you have a resurrection of the external sources of funding for internal causes and proxy wars. and the use of charities which, you know, was such a focus post-9/11 was largely kind of managed and handled, has now been resurrected. the idea of key pocket donors willing to support different causes because they're more effective, for example, fighting forces against assad, that's a problem. you're absolutely right. the terrorist and militant groups, the ones we worry about that have regional and global

aspirations have accordion like financial -- they'll take whatever opportunities they're given and, you know, in the '90s you had a much more hierarchy donor base driven financing model for al qaeda. it used that to help build franchises and then to help support them. what you had in the post-9/11 era, given the pressure put on these organizations, given the fracturing and metastasizing of the movement has been a more localized set of economies and industries that the terrorist groups have taken advantage of. al qaeda has made a fortune in the industry of kidnap-for-ransom. al-shabaab in east africa has run an economy out of exporting charcoal, importing sugar. that's why the u.n. sanctions -- sanctions on the export of coal

out of east africa. that's why. they have always used the remittances and taxes off check point. daesh had used access to oil and antiquities, massive populations in the urban environments to their source, run economies, not to me the whole oil industry from production to delivery. so these organizations will take whatever opportunities we give them in terms of resources and space, and i think one of the dangers to your point, steve, is as that space shrinks they're going to need and want other sources. so that will look a lot like things that we've seen in the past. there's going to be elements of criminality attached to it. there's going to be smuggling still of oil in the case of middle east-based organizations. they're going to use resources that are at their command. you know, you've seen it with other terrorist groups,

non-islamic extremist groups like in india, they used mining industry to their advantage. these are groups that have innovative and have grown more sophisticated, and to the extent they have sophisticated support networks they're able to adapt. that's why constricting their support networks becomes so important, constricting their ability to reach across borders, cutting off their access to capital and resources is critical. again, as i said at the start it is why these issues are even more important now than ever because as we try to constrict daesh you don't want the son of daesh to have access to new resources whether it is external donors or resources. that's why we need the gulf countries to be focussed on this. >> david, again, i agree with

juan. just in isis in particular, you know, it grew out of aqi. aqi's financial model was the traditional al qaeda model of raising money from donors. when isis, isil grew, took over territory it had an easier way of raising funds, which was to extort the population that it had taken over.