>> You know, let's make clear it wasn't
really just about cutting off funding to Al Qaeda but also in a way
influencing a the behavior of, of states and other entities.
Because the idea was you could impose a price to some regard
on states and corporations who were
perhaps if not directly funding but maybe enabling
Al Qaeda to, to gain access to financial channels.
So these tools extend, and it wasn't just about depriving and starving
the funding from Al Qaeda but actually influencing the actors around the world.
>> Absolutely right. And you, you hit the nail on the head.
I think.
There were three components to this
that were interesting and important strategically.
One was, we incentivized and made important to the private sector the
notion of reputational risk.
The fact that banks and non-bank financial
institutions did not want to be caught with terrorist
funds in their bank accounts, or having been,
you know, wired through their facilities, was an
incredibly important incentive for the private sector itself
to guard against these illicit financial flows, and
so they closed accounts on their own, they
stopped accounts, they reported things that were happening.
So that was very important.
In terms of countries, we had to shift the paradigm.
>> Right.
>> Recall that in the 1980s, for example, from the Arabian Gulf
There was a lot of financial sort of, input from our allies
into the Afghan Mujahideen, in the movement that was basically the precursor
to many of the elements of al Qaeda, and al Qaeda core.
We had to shift that paradigm to say look, this is no longer acceptable.
This is now a threat to you, a threat to us, and we've gotta find ways
of cutting off The, the traditional ways that
have largely funded this movement in the past.
That has to end.
And so that led to some very important financial diplomacy with countries like
Saudi Arabia, the UAE, and others in the Arabian Gulf and around the world.
Then finally it was a way of figuring out how to deter actors.
Without arresting them without you know threatening
kinetic activity, you know, if people have commercial
interests or financial interests they want to preserve
those so if those are put at risk,
that's one way of starting to impact, dissuade,
deter possible elements of the network that can
be convinced that it's not a good idea to be helpful to this Al Qaeda movement.
So all of that helped in shaping
the environment.
>> And students around the world will soon have an opportunity to be able
to read in more depth about this very important aspect of the war in general.
Tell us just a little bit about that. >> Thank you David I appreciate the plug
I'm publishing a book on September 10th 2013 called Treasury's
War, the Unleashing of a new Era of Financial Warfare, so it takes from
the discussion we're having here.
Talking about sort of the, the foundational
principles of this new paradigm post 9/11.
The use of treasury tools powers to go after Al Qaeda's financing.
And how that evolved into a whole new way of thinking about the use
of financial power and influence to go
after the financial underpinnings of America's enemies.
And so the book talks about not just that but how we thought about.
proliferation finance, how we thought
about dealing with international organized crime.
How these tools were used quite effectively, and
continue to be used against North Korea and Iran.
and frankly, the future of the use of these tools.
How China is, has learned from the US, how Russia has learned.
and what the future of financial warfare and influence may look like.
And so, hopefully the book illuminates
with some interesting stories, some great characters.
David, friends of yours and
mine that are in it, and I think it'll be
both entertaining and hopefully helpful to students around the world.
>> Well, I know this'll be an important contribution to the, to
the literature, some of which we're able to study this course and we'll
help fill out the full picture of all the different ways that this this enemy and
this problem of, of global terrorism and also proliferation weapons
of mass destruct destruction and things that
threaten, you know, everyone around the world.
is being is being waged.
Juan Zarate, you've been very, very generous with your time.
Not only talking to me but also trying to set up
this Google chat which I'm glad we were able to do.
>> I figured it out.
[LAUGH]
>> Figure it out. And I'm very grateful.
Thank you so much for sharing your expertise with us.
>> Thank you, David.
It's a pleasure to be with you and all the best to you and your students.
