The 24-hour news cycle provides a constant reminder of the threats posed by the Islamic State in Iraq and Syria (ISIS) and Al-Qaeda affiliated groups. Unlike many other terrorist groups, however, ISIS has considerable financial resources at its disposal. On Oct. 23, 2014, the Under Secretary of Treasury for Terrorism and Financial Intelligence, David Cohen, noted that ISIS raises tens of millions of dollars a month.1 As Cohen emphasized, “[W]e at the Treasury Department are intensifying our focus on undermining [ISIS's] finances.”
The U.S. government has indicated that it will use all tools at its disposal to cut off ISIS’s financial network and act against entities, including financial institutions, that are conduits to fund terrorist activities. Indeed, since Sept. 11, 2001, financial institutions have faced increased scrutiny for their often-unwitting role in terrorist financing. The myriad of laws and regulations that govern this area require diligence to avoid potential criminal and civil liability. This article outlines the applicable laws and regulations, discusses recent civil and criminal action in this area, and offers suggestions to try and avoid the crosshairs of government authorities and private litigants.
