GLOBAL - Freezing money of terrorist organisations has failed worldwide. But, Rob ten Wolde, managing director, staff managerial advice, of independent administrator AZL in Heerlen asks whether should the search continue.
Rob ten Wolde: “Not only were the Dutch pension funds and insurers shocked by the terrorist attacks in the US, but after the event they were also shocked by the torrents of circulars from their supervisor.
“These circulars were the logical consequence of a worldwide attempt to prevent financial institutions, among them insurers and pension funds, from being involved in financing terrorism.
“This move was initiated by resolutions of the United Nations Security Council and consequently applied to regulations at European Union level, said Wolde.
“They said that, on the basis of a ‘freeze list’, it should be investigated whether El-this or Al-that occur in pension records. And if so, their financial assets should be immediately frozen. The financial institutions should also report a ‘hit’ to the financial and judicial authorities.
“In addition, a ‘watch list’ has been made available with other names of persons and organisations. Although any legal foundation for freezing their assets is lacking, they show at least ‘a greater integrity risk’, according to the criminal investigation departments and the intelligence services.”
“In 2001 approximately 270 names were passed on. These names correspond with those on the aforementioned lists. Names, though, which recalled foreign football players in the pay of Dutch clubs are rather unlikely to display terrorist activities. So these couple of hundred hits certainly did not result in catching any culprits.
“That everybody is taking things seriously is shown by the fact that any violation of the European regulation has been made punishable as an economic offence. President Bush even announced that if any financial institution fell short of the measures required, their assets and transactions would be blocked. One moment you are an unsuspecting pension fund or insurer, the other you are a terrorist organisation.
“Demands for information by the supervisor always have to have a legal foundation. Since the supervisor can still go his own way, the authority to ask for information is always related to a particular purpose. Like guaranteeing that a pension commitment will always be met. But, the comprehensive authority could not possibly be related to that purpose. “In this case new legislation swiftly had to be made in order to give the Dutch supervisor excessive facilities to find out about the financing of subversive activities. Now even rules can be made for operational management concerning its administrative organisation and internal surveillance. In the mean time Osama bin Laden is still on the run.
“There was bound to be a rise of the supervisor’s implementation costs. In my country these costs are divided among all the pension funds and insurers. Since then, these institutions have received cost assessments which were 29% higher than last year! Part of the motive concerned the extension of activities in the field of integrity monitoring and the added role in the shape of spotting and preventing the financing of terrorism. In his preface to the 2001 annual report the chairman heaved the commonplace sigh that it is even true of the supervisor that after September 11 things will never be the same again. In another circular he tellingly gives shape to the increase of international interweaving in the pension and insurance sectors, which in this connection has rightly been established, by referring to a new regulation imposing restrictive measures on Zimbabwe. Zimbabwe? Yes, Zimbabwe! And … the search
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