Treasury Department News
Jan 16
PREPARED REMARKS OF STUART LEVEY UNDER SECRETARY FOR TERRORISM AND
FINANCIAL INTELLIGENCE ON THE DESIGNATION OF BANK SEPAH FOR FACILITATING
IRAN’S WEAPONS PROGRAM
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp220.htm
The world is by now well aware of Iran's defiance of the
international
community in pursuing its nuclear program and its sponsorship of
terrorist organizations that maim and murder innocent civilians.
What
may be less well-known is that the Government of Iran is
facilitating
its proliferation and terrorism activities through the world's
financial system, using its state-owned banks and an array of front
companies and other deceptive techniques specifically designed to
evade the controls of responsible financial institutions.
Over the past several months, we have been sharing information with
our foreign counterparts and key executives in the private sector
about these deceptive practices and discussing how best to safeguard
the international financial system against them.
As the evidence of Iran's deceptive financial practices has mounted,
financial institutions and other companies worldwide have begun to
reevaluate their business relationships with Iran. Many leading
financial institutions have either scaled back dramatically or even
terminated their Iran-related business entirely. They have done so
of
their own accord, many concluding that they did not wish to be the
banker for a regime that funds terrorism, defies the UN Security
Council in pursuing a nuclear program, and deliberately conceals the
nature of its business.
We have taken a number of steps to combat Iran's abuse of the
international financial system. In September, the Treasury took
action
against Iran's Bank Saderat, which Iran used to move millions of
dollars to terrorist organizations such as Hizballah, HAMAS, and the
Palestinian Islamic Jihad. Our action alerted the world's financial
community to Bank Saderat's role in funding terrorism and cut the
bank
off from the U.S. financial system altogether.
On December 23, 2006, the UN Security Council unanimously passed
Resolution 1737, requiring states to take a number of actions to
deny
Iran access to the materials and services that support its nuclear
and
ballistic missile capabilities.
Under the resolution, all governments are obligated to take a number
of steps to combat Iran's proliferation activities. Among other
things, the resolution requires states to deny Iran any financial
assistance, or the transfer of any financial resources or services,
related to the supply, sale, transfer, manufacture, or use of
prohibited items associated with Iran's nuclear and missile
programs.
It also contains an annex listing entities and individuals
responsible
for these programs, and requires states to freeze their assets and
those of entities owned or controlled by them.
In accord with these UN obligations, the Treasury today is
designating
Bank Sepah, the fifth largest Iranian state-owned bank, as a
supporter
of WMD proliferation. In particular, Sepah provides direct and
extensive financial services to Iranian entities responsible for
developing missiles capable of carrying weapons of mass destruction.
The Treasury is taking this action under our authority aimed at
combating proliferation, Executive Order 13382.
Bank Sepah has been a key provider of financial services to the
Shahid
Hemmat Industries Group (SHIG) and the Shahid Bakeri Industries
Group
(SBIG), two Iranian missile firms listed in the annex to the
Resolution 1737 for their direct role in advancing Iran's ballistic
missile programs. Bank Sepah also provides financial services to
SHIG's and SBIG's parent entity, Iran's Aerospace Industries
Organization (AIO), which has been designated as a proliferator by
the
United States for its role in overseeing all of Iran's missile
industries. AIO's Director is listed in the annex of Resolution
1737,
thereby requiring states to freeze his assets as well as the assets
of
entities under his ownership or control.
Since at least 2000, Bank Sepah has provided a variety of critical
financial services to Iran's missile industry, arranging financing
and
processing dozens of multi-million dollar transactions for AIO and
its
subordinates.
The bank has also facilitated business between AIO and North Korea's
chief ballistic missile-related exporter, KOMID. Also previously
designated by the Treasury, KOMID is known to have provided Iran
with
missile technology. The financial relationship between Iran and
North
Korea, as represented by the business handled by Bank Sepah, is of
great concern to the United States.
Finally, like certain other Iranian banks and entities, Bank Sepah
has
engaged in a range of deceptive practices in an effort to avoid
detection, including requesting that other financial institutions
take
its name off of transactions when processing them in the
international
financial system.
Our action today applies to all branches of Bank Sepah, including
those in Paris, Rome, and Frankfurt, its wholly-owned subsidiary in
London, and the Bank's chairman and director, as well as its more
than
290 branches based in Iran.
The United States urges all governments to comply with their
obligations under Resolution 1737 by taking appropriate action
against
all entities involved in Iran's nuclear or missile programs. The
Treasury will continue to monitor and act against any threats that
Iran and other rogue actors pose to the international financial
system.
U.S. INTERNATIONAL RESERVE POSITION
http://www.treas.gov/press/releases/200711617121925673.htm
Jan 15
TREASURY AND IRS ISSUE GUIDANCE ON NEW DISTRIBUTION PROVISIONS OF THE
PENSION PROTECTION ACT
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp223.htm
Washington, DC-
The Treasury Department and the IRS issued a notice today providing
extensive guidance on several Pension Protection Act rules relating
to
distributions from tax-qualified retirement plans.
The guidance addresses many questions on PPA provisions, including:
* interest rate assumptions for lump sum distributions
* hardship distributions from a 401(k) and similar plans
* early distributions from qualified plans to terminated public
safety employees
* rollovers from qualified plans to IRAs for non-spouse
beneficiaries
* distributions to pay for health insurance for retired public
safety officers
* earlier vesting of certain employer contributions
* new rules for the notice and consent period for distributions
The notice also clarifies several issues concerning the provision
permitting IRA owners age 70 ½ or older to directly transfer
tax-free,
up to $100,000 per year to an eligible charity. For example, a check
from an IRA made payable to an eligible charity but delivered by the
IRA holder still qualifies for tax-free treatment. IRAs held on
behalf
of beneficiaries, as well as IRAs held by the original owners, are
eligible to use this provision. Additionally, the $100,000 annual
limit applies separately for each spouse of a married couple. If
both
spouses have IRAs and are at least age 70 ½, the couple can transfer
a
combined total of $200,000.
Jan 12
U.S. INTERNATIONAL RESERVE POSITION
http://www.treas.gov/press/releases/20071817509109.htm
IRAN’S BANK SEPAH DESIGNATED BY TREASURY SEPAH FACILITATING IRAN’S
WEAPONS PROGRAM
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp219.htm
The Department of the Treasury today designated Bank Sepah, a
state-owned Iranian financial institution for providing support and
services to designated Iranian proliferation firms. Bank Sepah
International Plc, a wholly-owned subsidiary of Bank Sepah in the
United Kingdom, and Ahmad Derakhshandeh, Bank Sepah's Chairman and
Director, were also designated today.
"Bank Sepah is the financial linchpin of Iran's missile procurement
network and has actively assisted Iran's pursuit of missiles capable
of carrying weapons of mass destruction," said Stuart Levey,
Treasury's Under Secretary for Terrorism and Financial Intelligence
(TFI). "Our action today gives effect to the United Nation's call on
all nations to deny financial assistance to Iran's nuclear and
missile
programs, and we urge other countries likewise to fulfill this
serious
obligation."
Treasury's Office of Foreign Assets Control (OFAC) took this action
pursuant to Executive Order 13382, an authority aimed at freezing
the
assets of proliferators of weapons of mass destruction (WMD) and
their
supporters and isolating them financially. Designations under E.O.
13382 prohibit all transactions between the designees and any U.S.
person and freeze any assets the designees may have under U.S.
jurisdiction.
Additionally, the United Nation Security Council unanimously passed
Resolution 1737 on December 23, 2006, requiring governments
worldwide
to take steps to combat Iran's illicit conduct, including freezing
the
assets of named entities and individuals associated with Iran's
nuclear and missile programs, as well as the assets of entities
owned
or controlled by them. The resolution also requires states to
prevent
the provision to Iran of any financial assistance, or the transfer
of
any financial resources or services, related to the supply, sale,
transfer, manufacture, or use of prohibited items associated with
Iran's nuclear and missile programs.
Bank Sepah provides financial support and services to Iran's
Aerospace
Industries Organization (AIO), Shahid Hemmat Industries Group
(SHIG),
and the Shahid Bakeri Industries Group (SBIG), which were designated
by President George W. Bush on June 29, 2005, in the Annex to E.O.
13382.
AIO, a subsidiary of the Iranian Ministry of Defense and Armed
Forces
Logistics, oversees all of Iran's missile industries and is the
overall manager and coordinator of Iran's missile program.
Bank Sepah is AIO's bank of choice, and since at least 2000, Sepah
has
provided a variety of critical financial services to Iran's missile
industry, arranging financing and processing dozens of multi-million
dollar transactions for AIO and its subordinates, including SBIG and
SHIG.
Through its role as a financial conduit, Bank Sepah has facilitated
Iran's international purchases of sensitive material for its missile
program. In 2005, Bank Sepah financed a Chinese firm's sale of
missile
related items to Iran. Also in that year, AIO directed Sepah to
transfer well over half of a million dollars to a North Korean firm
associated with Komid, a North Korean entity designated for
providing
Iran with missile technology.
SHIG is responsible for Iran's ballistic missile program, most
notably
the Shahab series of medium range ballistic missiles based on the
North Korean-designed No Dong missile. The Shahab is believed to be
capable of carrying unconventional warheads and has a range of at
least 1500 kilometers. SHIG has received help from China and North
Korea in the development of this missile.
SBIG, an affiliate of Iran's AIO, is also involved in Iran's missile
program. Among the weapons SBIG produces is the Fateh-110 missile,
with a range of 200 kilometers, and the Fajr rocket systems, a
series
of North Korean-designed rockets produced under license by SBIG with
ranges of between 40 and 100 kilometers. Both systems are capable of
being armed with at least chemical warheads.
Bank Sepah is the fifth largest Iranian state-owned bank with more
than 290 domestic branches and a presence in Rome, Paris, Frankfurt,
and a wholly-owned subsidiary in London. According to the Banker's
Almanac, Bank Sepah's total branch assets were USD 13.9 billion as
of
early 2005.
Background on E.O. 13382
Today's action builds on President Bush's issuance of E.O. 13382 on
June 29, 2005. Recognizing the need for additional tools to combat
the
proliferation of WMD, the President signed the E.O. authorizing the
imposition of strong financial sanctions against not only WMD
proliferators, but also entities and individuals providing support
or
services to them.
In the Annex to E.O. 13382, the President identified eight entities
operating in North Korea, Iran, and Syria for their support of WMD
proliferation. E.O. 13382 authorizes the Secretary of the Treasury,
in
consultation with the Secretary of State, the Attorney General, and
other relevant agencies, to designate additional entities and
individuals providing support or services to the entities identified
in the Annex to the Order.
In addition to the entities identified in the annex of E.O. 13382,
the
Treasury Department has designated 23 entities and two individuals
as
proliferators of WMD, specifically:
* Eight North Korean entities on October 21, 2005;
* Two Iranian entities on January 4, 2006;
* One Swiss individual and one Swiss entity tied to North Korean
proliferation activity on March 30, 2006; and
* Four Chinese entities and one U.S. entity tied to Iranian
proliferation activity on June 8, 2006.
* Two Iranian entities on July 18, 2006;
* Three Syrian entities on January 4, 2007; and
* One Iranian entity, one UK entity, and one individual tied to
Iranian proliferation activity on January 9, 2007.
REMARKS BY TREASURY SECRETARY HENRY M. PAULSON AT THE TREASURY
RIBBON CUTTING CEREMONY TREASURY DEPARTMENT CASH ROOM
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp223.htm
Good morning. Thank you all for being here.
It is truly a special occasion when the First Lady of the United
States visits the Treasury Department. Mrs. Bush, welcome – we are
delighted you're here. We appreciate the opportunity to show you our
historic building.
Thank you also to our Treasurer, Anna Cabral, and to the Chairman of
the Treasury Historical Association, Tom O'Malley, for speaking
earlier. And welcome to all the members of the Treasury Historical
Association who dedicate time and resources to preserving the
history
of the Department.
Thanks to Deputy Secretary Bob Kimmitt and his wife, Holly, who just
accompanied Wendy and the First Lady and me on a tour of the
building.
And great thanks to Richard Cote, our curator, for an expert history
of the building.
Today is a special day for the Treasury. And Mrs. Bush, we are
honored
to have you here for the official ribbon-cutting of the Treasury
Building and Annex Repair and Restoration Project.
Over the last decade, architects, historians, engineers, carpenters,
and many other contributors have worked to modernize the Treasury
building while remaining true to its historic character. Many of you
–
including Polly Dietz, the project manager, and Jim Thomas, our
facilities director – are on stage and in the audience – and you
deserve a round of applause.
Few buildings in Washington boast such a rich history as this one.
Today's Treasury building stands on the same spot as the very first
Treasury building in Washington in 1800.
Since then, the history of the Treasury building has been shaped by
our close proximity to our neighbor, the President.
Sometimes it would have been helpful to be a little further away.
For
instance, in 1814, as the British burned the White House, they
torched
the Treasury building for good measure.
The task of rebuilding Treasury fell to James Hoban, the original
architect of the White House.
In 1869, President Ulysses S. Grant held his inaugural ball here in
the Cash Room. Unfortunately, little attention was paid to the hats
and coats of partygoers, some of whom had to wait hours to retrieve
their possessions. Thus it became the first and last inaugural ball
held in the Cash Room.
But we've been much better about keeping track of money.
Up until the 1970s, members of the public could come into the Cash
Room and exchange notes and bonds of the United States government
for
cash. Currency was stored in this room and in the adjacent vaults.
However, I'm sorry to inform everyone here today that the only cash
you'll find in this room is in your wallets.
On our tour today, we saw two other magnificent rooms with
presidential history – the Salmon Chase suite and the Andrew Johnson
suite.
The Chase suite has been restored beautifully. Today the rooms look
much the same as they did when Abraham Lincoln and Salmon Chase met
there to discuss the financing of the Civil War.
After President Lincoln's assassination in 1865, the newly sworn-in
President Andrew Johnson wanted to allow an appropriate amount of
time
for Mrs. Lincoln and her family to move out of the White House.
Treasury Secretary Hugh McCulloch offered the new president his own
suite on the third floor, and President Johnson took him up on the
offer. He ran the federal government out of the Treasury building
for
eight weeks.
We share plenty of happy memories with the White House, too. In
fact,
the very first telephone line installed in the Treasury Building –
back in 1877 – connected Treasury with the White House.
And believe me, President Bush keeps the number handy.
Mrs. Bush, this is just part of the rich history shared by the
Treasury Department and the White House. It's a history we're proud
of. And through the active involvement of Treasury employees, as
well
as public and private donors, we intend to preserve the historical
integrity of our building for future generations.
Mrs. Bush's own work in support of historic preservation has been
demonstrated throughout her public life. She is also a highly
respected and effective voice on education and youth, and she is
active around the world on issues of economic development, the
rights
of women, and the eradication of diseases such as HIV/AIDS and
malaria. Everywhere Mrs. Bush travels, she represents the President
and the United States of America in a truly exemplary manner.
It is now my great pleasure and honor to introduce the First Lady of
the United States, Laura Bush.
U.S. FISCAL OUTLOOK IMPROVES SIGNIFICANTLY IN DECEMBER FISCAL YEAR TO
DATE DEFICIT DOWN; MONTHLY SURPLUS UP MORE THAN 300 PERCENT
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp224.htm
"Today's monthly Treasury statement shows that tax receipts have
reached a new record and that we are moving in the right direction
toward a balanced budget by 2012. This good news reflects the strong
state of our economy. The President's tax relief has helped make
this
possible by creating the conditions for sustained economic growth
and
job creation."
- Assistant Secretary for Economic Policy Phillip Swagel
Highlights:
The Fiscal Year to Date deficit ($80 billion) is down 33 percent
($39
billion) compared to the same period last year. The President's tax
relief has stimulated strong economic growth. This strong growth has
contributed to record-level receipts and the creation of more than
7.2
million jobs since August 2003. October to December receipts for FY
07 are at $574 billion, running 8 percent ($43 billion) higher
compared to the same period for FY 06.
December brought record-level monthly tax receipts ($260 billion)
and
a record-level surplus ($45 billion) for the month. The monthly
surplus was up 306 percent ($34 billion) compared to December 2005
($11 billion).
December 15 brought the largest ever single day corporate tax
receipts
($73 billion). This broke the previous record set in September 2006
($72 billion).
Maintaining low tax rates will help ensure continued economic
growth,
lift Americans living standards, and enable us to address our longer
term fiscal challenges from a position of economic strength.
Jan 4
PRESIDENT’S PROPOSAL TO BALANCE THE BUDGET BY 2012
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp214.htm
"Over the past few years, pro-growth economic policies have
generated
higher revenues. Together with spending restraint, these policies
allowed us to meet our goal of cutting the budget deficit in half
three years ahead of schedule. We did so without taxing the working
people. We kept taxes low."
– President Bush, January 3, 2007
"The President's tax cuts have laid the foundation for sustained
economic growth and job creation. A strong economy means higher
revenues to the Treasury. If we can keep our economy growing by
continuing with economic policies that keep taxes low and drive job
creation and productivity, while restraining spending, we can
achieve
a balanced budget by 2012."
-- Treasury Secretary Henry M. Paulson, January 3, 2007
Americans are keeping more of their hard-earned money because of the
President's tax cuts.
(*Figures are since June of 2001 and include the Economic Growth and
Tax Relief Act of 2001, the Job Creation and Worker Assistance Act
of
2002, and the Jobs and Growth Tax Relief Act of 2003.)
* Americans kept $1.1 trillion by the end of 2006.
* Americans will keep $2.4 trillion over the next ten years (with
permanent tax relief).
* Americans will keep $3.5 trillion total through 2016 (if
permanently extended).
The President's tax relief boosted economic growth which has
generated
higher and higher revenues for the federal coffers.
* Tax receipts were up 11.8 percent in FY06 on top of FY05's 14.6
percent increase.
* So far this fiscal year, receipts have grown another 8.8 percent
compared to the same period last year.
* Since FY03, when the President signed the most recent tax cuts
into law, revenues have increased 35 percent.
THREE ENTITIES TARGETED BY TREASURY FOR SUPPORTING SYRIA’S WMD
PROLIFERATION
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp216.htm
The U.S. Department of the Treasury today designated three Syrian
entities, the Higher Institute of Applied Science and Technology
(HIAST), the Electronics Institute, and the National Standards and
Calibration Laboratory (NSCL), pursuant to Executive Order 13382, an
authority aimed at freezing the assets of proliferators of weapons
of
mass destruction (WMD) and their supporters.
"Syria is using official government organizations to develop
nonconventional weapons and the missiles to deliver them," said
Stuart
Levey, Treasury's Under Secretary for Terrorism and Financial
Intelligence (TFI). "We will continue to take action to prevent
such
state-sponsored WMD proliferators from using the international
financial system."
All three entities meet the criteria for designation under E.O.
13382
because they are subordinates of the Scientific Studies and Research
Center (SSRC), which was designated by President George W. Bush in
the
Annex to E.O. 13382 issued on June 29, 2005. SSRC is the Syrian
government agency responsible for developing and producing
non-conventional weapons and the missiles to deliver them. SSRC
also
has an overtly promoted civilian research function; however, its
activities focus substantively on the development of biological and
chemical weapons.
Syria's Electronics Institute is responsible for missile-related
research and development, and HIAST is a Syrian educational
institution which provides training to SSRC engineers. The U.S.
Commerce Department's Bureau of Industry and Security in March 2005
added SSRC, HIAST, and NSCL to the Entity List, a public list of
entities whose activities pose a risk of diverting exported and
reexported items into programs related to weapons of mass
destruction,
among other sensitive activities. The Entities List also includes
entities for which U.S. foreign policy goals are served by imposing
additional license requirements on exports and reexports to those
entities.
Additionally, Japan has identified the SSRC, HIAST, and NSCL as
entities of proliferation concern. NSCL has also been identified by
South Korea as an entity of proliferation concern.
Designations under E.O. 13382 prohibit all transactions between the
designees and any U.S. person and freeze any assets of the designees
that are in the United States or in the possession or control of
U.S.
persons.
Background on E.O. 13382
Today's action builds on President Bush's issuance of E.O. 13382 on
June 29, 2005. Recognizing the need for additional tools to combat
the proliferation of WMD, the President signed the E.O. authorizing
the imposition of strong financial sanctions against not only WMD
proliferators, but also entities and individuals providing support
or
services to them.
In the Annex to E.O. 13382, the President identified eight entities
operating in North Korea, Iran, and Syria for their support of WMD
proliferation. E.O. 13382 authorizes the Secretary of the Treasury,
in consultation with the Secretary of State, the Attorney General,
and
other relevant agencies, to designate additional entities and
individuals providing support or services to the entities identified
in the Annex to the Order.
In addition to the entities identified in the annex of E.O. 13382,
the
Treasury Department has designated twenty-one entities and one
individual as proliferators of WMD, specifically:
* Eight North Korean entities on October 21, 2005;
* Two Iranian entities on January 4, 2006;
* One Swiss individual and one Swiss entity tied to North Korean
proliferation activity on March 30, 2006;
* Four Chinese entities and one U.S. entity tied to Iranian
proliferation activity on June 8, 2006;
* Two Iranian entities on July 18, 2006; and
* Three Syrian entities on January 4, 2007.
The designation announced today is part of the ongoing interagency
effort by the United States Government to combat WMD trafficking by
blocking the property of entities and individuals that engage in
proliferation activities and their support networks
HOYT TO BE SWORN INTO OFFICE WITH TREASURY CEREMONY
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp215.htm
Washington, DC--Treasury Secretary Henry M. Paulson will swear in
the
Department's General Counsel Bob Hoyt at a ceremony in Treasury's
Cash
Room on Friday, January 5 at 4:00p.m.
Treasury's General Counsel serves as the chief law officer of the
Department of the Treasury and a senior policy advisor to the
Secretary. In addition, he is responsible for the supervision of
approximately 2,000 lawyers within the Department's legal division.
Media without Treasury press credentials should contact Brittni
Aldridge at (202) 622-2960, or Brittni.Aldridge@do.treas.gov with
the
following information: full name, Social Security number, and date
of
birth.
Who
Secretary Henry M. Paulson
Deputy Secretary Robert M. Kimmitt
General Counsel Robert F. Hoyt
What
Swearing In Ceremony
When
Friday, January 5
4:00 p.m. EST
Where
Department of the Treasury
Cash Room
1500 Pennsylvania Ave., NW
Washington, DC
Dec 22
TREASURY, IRS ISSUE FINAL S-CORPORATION ESOP REGULATIONS
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp207.htm
Washington, DC- Treasury and the IRS issued final regulations today
under section 409(p) of the Internal Revenue Code with respect to an
employee stock ownership plan (ESOP) that holds stock of a
Subchapter
S corporation.
The final regulations are the culmination of a process that began
when
the Economic Growth and Tax Relief Reconciliation Act of 2001
enacted
section 409(p), which ensures that the special tax benefits afforded
to ESOPs that hold Subchapter S corporation stock do not extend to
cases in which the ownership is concentrated among a small number of
owners.
The regulations, effective for plan years that begin on or after
January 1, 2006, replace existing temporary regulations with various
modifications to reflect comments received.
Dec 21
TREASURY WELCOMES ENTRY INTO FORCE OF US-FRENCH INCOME, ESTATE TAX
PROTOCOLS
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp210.htm
Washington, DC- The Treasury Department today welcomed the entry
into
force of protocols to the income tax and estate tax treaties between
the United States and France. The protocols were signed in December
2004, and amend the existing income tax treaty concluded in 1994 and
the existing estate tax treaty concluded in 1978.
The protocol to the income tax treaty makes technical changes to
resolve several issues that have arisen under the treaty following
its
entry into force in 1995. The most important provision clarifies
the
manner in which the treaty will apply in the case of investments
made
into France by U.S. persons through partnerships and other
fiscally-transparent entities.
In general, this protocol will have effect, with respect to taxes
withheld at source, for amounts paid or credited on or after
February
1, 2007, and with respect to other taxes, for taxable periods
beginning on or after January 1, 2007. However, because the rules
benefiting U.S. residents investing through partnerships are
intended
to ensure that the treaty provides results that are consistent with
the intent of the negotiators of the 1995 treaty, those changes will
be applicable as of the effective dates of the 1995 treaty.
The protocol to the estate tax treaty was negotiated following
changes
in the U.S. estate tax law in 1988 that affected non-citizen spouses
of U.S. decedents. The protocol provides some estate tax relief in
the form of a marital deduction in the case of a French spouse of a
U.S. decedent where the estate is of relatively modest size. The
estate tax protocol also makes a number of technical changes to take
into account changes in each country's tax law since the estate tax
treaty entered into force in 1980.
Although the estate tax protocol generally will be effective with
respect to gifts made and deaths occurring after the exchange of
instruments of ratification, the relief provided with respect to
surviving non-citizen spouses and the pro rata unified credit will
be
effective with respect to gifts made and deaths occurring after
November 10, 1988 (the effective date of the 1988 legislative
changes).
Claims for refund asserting the benefits of the protocol that
otherwise would be barred by the statute of limitations must be made
within one year of entry into force of the protocol, however, and
all
claims for retroactive relief are subject to the rules regarding the
United States' ability to tax former citizens and long-term
residents.
The two protocols are an important step forward in keeping our
existing treaty network up to date and serve to strengthen an
already
strong relationship with an important treaty partner. They are the
latest manifestation of the close economic ties and deep friendship
between our two countries.
Dec 20
PRESIDENT BUSH SIGNS BILL TO MAKE HEALTH CARE MORE AFFORDABLE,
ACCESSIBLE
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp209.htm
Washington, DC- President George W. Bush signed the Health
Opportunity
Patient Empowerment Act of 2006 today, enhancing Americans' access
to
tax-advantaged health care savings. The law, part of the Tax Relief
and Health Care Act of 2006, provides new opportunities for health
savings account (HSA) participants' to build their funds.
"Health savings accounts are improving the way Americans obtain the
care they need. This bill makes HSAs more flexible and makes it
easier for participants to put money aside for their personal health
care funds," said Treasury Assistant Secretary for Tax Policy Eric
Solomon.
HSA provisions of the Act include:
Allow rollovers from health FSAs and HRAs into HSAs through 2011.
Employers can transfer funds from Flexible Spending Arrangements
(FSAs) or Health Reimbursement Arrangements (HRAs) to an HSA for
employees switching to coverage under an HSA-compatible health plan.
The amounts rolled over to HSAs from FSAs or HRAs are over and above
the amounts allowed as annual contributions. The maximum
contribution
is the balance in the FSA or HRA as of September 21, 2006, or if
less,
the balance as of the date of the transfer. The provision is
limited
to one distribution with respect to each health FSA or HRA of the
individual. If an individual does not remain an eligible individual
for the 12 months following the month of the contribution, the
transferred amount is included in income and subject to a 10 percent
additional tax.
Increase in annual HSA contribution. Previously, the maximum HSA
contribution was the lesser of the deductible of the individual's
HSA-eligible plan or a statutory maximum. The new rules make the
limit the statutory maximum contribution, regardless of the
individual's deductible. For 2007, the maximum contribution for an
eligible individual with self-only coverage is $2,850, and the
maximum
contribution for an eligible individual with family coverage is
$5,650. These limits are indexed for inflation.
Full HSA contribution regardless of month individual becomes
eligible.
Normally, the HSA contribution is pro rated based on the number of
months that an individual during the year a person was an eligible
individual. The new provisions provide an exception to this rule
that
will allow individuals who become covered under an HSA-eligible plan
in a month other than January to make the maximum HSA contribution
for
the year based on their coverage in the last month of the year.
This
eliminates a common barrier to switching to HSA-eligible coverage.
If
an individual does not stay in the HSA-eligible plan 12 months
following the last month of the year of the first year of
eligibility,
the amount which could not have been contributed except for this
provision will be included in income and subject to a 10 percent
additional tax.
One-time transfer from IRAs to HSAs. The new rules allow for a
one-time contribution to an HSA of amounts distributed from an
Individual Retirement Arrangement (IRA). The contribution must be
made in a direct trustee-to-trustee transfer. The IRA transfer will
not be included in income or subject to the early withdrawal
additional tax. The transfer is limited to the maximum HSA
contribution for the year, and the amount contributed is not allowed
as a deduction. Generally, only one transfer may be made during the
lifetime of an individual. If an individual electing the one-time
transfer does not remain an eligible individual for the 12 months
following the month of the contribution, the transferred amount is
included in income and subject to a 10 percent additional tax.
Certain FSA coverage treated as disregarded coverage. Under previous
law, if an FSA had a grace period following the end of the plan year
allowing participants to incur additional reimbursable expenses,
participants were treated as having disqualifying coverage, reducing
their HSA contribution for that year, even though they had switched
to
HSA-eligible coverage at the first of the year. The new rules
treat
certain FSA coverage during a grace period as disregarded coverage,
eliminating any resulting reduction in the HSA contribution for the
year. First, the coverage is disregarded if the balance in the
health
FSA at the end of the plan year is zero. Second, the coverage is
disregarded if the year-end balance is transferred directly to an
HSA
fom the FSA, as noted above.
Earlier indexing of cost of living adjustments. Previously, indexing
was based on a 12-month period ending on August 31. The new rules
change the base period to the 12-month period ending on March 31 and
require that adjusted amounts for a year be published by June 1 of
the
preceding year. This change will provide employers and health plans
with more time to design qualifying HSA-eligible plans and
individuals
with more time to make decisions about their health care for the
next
year.
Allow greater employer contributions for lower-paid employees.
Previously, employer contributions under the comparability rules had
to be the same amount or percentage of the deductible for all
employees with the same category of coverage. Consequently,
employers
could not contribute higher amounts to lower-paid employees. The
new
rules provide an exception to the comparability rules allowing
employers to contribute more to the HSAs of non-highly compensated
individuals. For this purpose, the definition of "highly
compensated
employee" is based on same definition used for qualified retirement
plans.
December 19
TREASURY DESIGNATES INDIVIDUAL SUPPORTING AL QAIDA, OTHER TERRORIST
ORGANIZATIONS
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp206.htm
The U.S. Department of the Treasury today designated Mohammed Al
Ghabra, a naturalized British citizen who provides material and
logistical support to al Qaida and other terrorist organizations.
"Mohammed Al Ghabra has backed al Qaida and other violent jihadist
groups, facilitating travel for recruits seeking to meet with al
Qaida
leaders and take part in terrorist training," said Adam Szubin,
Director of the Office of Foreign Assets Control (OFAC). "We must
act
against those who fund and facilitate al Qaida's agenda of violence
against innocents."
Al Ghabra has organized travel to Pakistan for individuals seeking
to
meet with senior al Qaida individuals and to undertake jihad
training. Several of these individuals have returned to the UK to
engage in covert activity on behalf of al Qaida. Additionally, Al
Ghabra has provided material support and facilitated the travel of
UK-based individuals to Iraq to support the insurgents fight against
coalition forces.
In addition, Al Ghabra has also provided material and logistical
support to other terrorist organizations based in Pakistan, such as
Harakat ul-Jihad-I-Islami (HUJI). While in Pakistan, Al Ghabra met
with Haroon Rachid Aswat, who is currently detained in the U.K. and
subject to a U.S. extradition request on terrorism charges.
Apart from the financial and logistical support activities that led
to
his designation, Al Ghabra maintains contact with a significant
number
of terrorists, including senior al Qaida officials in Pakistan. In
2002, Al Ghabra met with and stayed at the home of Faraj Al-Libi,
who,
until he was detained by Pakistani authorities in 2005, served as al
Qaida's Director of Operations. Al Ghabra is also in regular
contact
with UK-based Islamist extremists and has been involved in the
radicalizing of individuals in the UK through the distribution of
extremist media.
Al Ghabra also has strong links to the Kashmiri militant group
Harakat
Ul-Mujahidin (HuM), which has been designated a terrorist
organization
by the United Nations. Information shows that Al Ghabra himself has
undertaken jihadi training at a HuM training camp in Kashmir. Al
Ghabra intended to fight in Kashmir but was prevented from doing so
by
HuM as they needed individuals to return to the UK to raise funds.
Identifier Information
Mohammed Al Ghabra
DOB: June 1, 1980
POB: Damascus, Syria
Nationality: British
U.K. Passport: 094629366
Address: East London
United Kingdom (UK)
Mohammed Al Ghabra was designated today pursuant to Executive Order
13224, which is aimed at financially isolating terrorists, terrorist
facilitators, and financiers. This designation freezes any assets
Al
Ghabra may have under U.S. jurisdiction and prohibits all financial
and commercial transactions by any U.S. person and Al Ghabra.
Dec 16 2006
US GOVERNMENT RELEASES FY06 FINANCIAL REPORT
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp202.htm
Washington, DC- The Treasury Department and the Office of Management
and Budget today released the fiscal year 2006 Financial Report of
the
United States Government. The Financial Report, which complements
the
President's Budget to be released in February, details the U.S.
government's financial position and condition. The report also
provides information about significant future obligations by looking
at prospective Social Security and Medicare costs.
The revenue results were $2.4 trillion, nearly a 12 percent increase
over 2005 revenues. These Financial Report revenues are
approximately
the same as the 2006 year-end budget receipts because the accounting
basis for tax revenues is generally the same for financial reporting
as it is for budgeting.
"The President's economic agenda has produced a strong economy,
creating millions of jobs, spurring revenues and meeting the
President's deficit reduction goal well ahead of schedule," said
Secretary Henry M. Paulson. "This report also demonstrates the
urgency
of addressing Americans' retirement security. The health of today's
economy provides a strong foundation for addressing the long-term
fiscal challenges highlighted in the Financial Report."
As reported in the fiscal year-end budget results this fall, record
level tax receipts led to a narrowing gap between costs and revenues
for the federal government. Consistent with the improved budget
results, the Financial Report's 2006 $450 billion net operating
costs
are approximately $310 billion lower than the 2005 figure.
Despite this short-term progress, funding for current Social
Security
and Medicare participants will come up $44 trillion short in the
next
75 years at net present value, according to the report. Without
fundamental reform, the cost of these programs is projected to
triple
as a percentage of the U.S. economy by the year 2080.
"This report shows we are making progress getting our fiscal house
in
order in the near-term. But it also puts in stark terms the
necessity
of addressing the rapid increase in entitlement spending over time,"
said OMB Director Rob Portman. "The burden on future generations
will
be overwhelming if we don't face the unsustainable growth in
important
programs like Medicare, Medicaid and Social Security. This is our
biggest budgetary challenge and one that will require a bipartisan
solution."
The report states that gross operating costs of the federal
government
were $3.1 trillion, down $47 billion from 2005. The decrease was
partly due to a change in interest rate assumptions used in
actuarial
accounting methods for post-employment benefits in certain agencies.
As required by law, Treasury first issued the Financial Report
subject
to audit for fiscal year 1997 to increase public awareness of the
government's finances. For the past three years, Treasury has issued
the report on December 15, ahead of the statutory deadline of March
31.
The Department has delivered the report to all members of the
Congressional leadership, as required by law. OMB and the Department
are also taking the additional step this year of sending the report
to
all members of the U.S. House of Representatives and the U.S.
Senate.
As it moves to electronic distribution, Treasury has delivered the
report to tens of thousands e-mail subscribers and posted the report
on several government websites including
http://www.fms.treas.gov/fr/index.html.
TREASURY INTERNATIONAL CAPITAL DATA FOR OCTOBER
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp199.htm
Treasury International Capital (TIC) data for October are released
today and posted on the U.S. Treasury web site (www.treas.gov/tic).
The next release, which will report on data for November, is
scheduled
for January 17, 2007.
Net foreign purchases of long-term securities were $82.3 billion.
* Net foreign purchases of long-term U.S. securities were $102.0
billion. Of this, net purchases by foreign official institutions
were $25.3 billion, and net purchases by private foreign
investors
were $76.7 billion.
* U.S. residents purchased a net $19.7 billion in long-term
foreign
securities.
Net foreign acquisition of long-term securities is estimated to have
been $73.5 billion.
Foreign holdings of dollar-denominated short-term U.S. securities,
including Treasury bills, and other custody liabilities increased
$3.1
billion. Foreign holdings of Treasury bills increased $4.2 billion.
Banks' own net dollar-denominated liabilities to foreign residents
decreased $14.4 billion.
Monthly net TIC flows were $62.2 billion. Of this, net foreign
private
flows were positive $69.1 billion, and net foreign official flows
were
negative $6.9 billion.
INTRODUCTORY REMARKS BY SECRETARY HENRY M. PAULSON AT THE U.S.-CHINA
STRATEGIC ECONOMIC DIALOGUE
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp196.htm
Beijing, China- Good morning. It is a great pleasure to be here for
the inaugural meeting of the U.S.-China Strategic Economic Dialogue.
My colleagues and I are looking forward to productive discussions
with
Madame Wu and the distinguished members of the Chinese delegation.
We
thank President Hu, Premier Wen and Vice Premier Wu for hosting the
first Strategic Economic Dialogue in Beijing.
The Strategic Economic Dialogue is an opportunity to address
important
long-term issues that are central to our economic relationship with
China while also providing an opportunity to address the most
pressing
short-term issues. China and the US have a shared economic interest
and we look forward to listening carefully to our Chinese
counterparts
as well as putting forward our ideas and viewpoints. Our discussions
will focus on China's successful integration into the global economy
and on ensuring that both nations benefit from our growing trade
relationship.
Three broad goals will guide our discussions today and throughout
the
Dialogue.
First we will focus on the importance of maintaining sustainable
growth without large trade surpluses. We will consider ways to
achieve
balanced growth, and talk about the importance of currency
flexibility
in the short-term and a path to freely tradable currency in the
medium-term.
Second, we will emphasize the importance of continuing to open
markets
to trade, competition, and investment. Within that discussion, we
will
highlight the importance of the rule of law, including property
rights
- as well as the importance of transparency in regulations and
standards, which are crucial to businesses both domestic and
foreign.
And the third main pillar of our discussions will be energy and the
environment. The United States and China are the world's leading
energy consumers. We are committed to developing the use of cleaner,
more abundant energy sources and we will talk about the best ways to
do that.
Today with the first meeting of the Dialogue, we are initiating a
long-term effort to address strategic economic issues. Our goal is
to
make progress on pressing needs, while advancing on a number of
fronts
by laying the foundation for long-term cooperation.
My great thanks to Madame Wu and this group of distinguished Chinese
leaders for hosting us in this grand venue. We are very much looking
forward to today's discussions.
U.S. INTERNATIONAL RESERVE POSITION
http://www.treas.gov/press/releases/200612111238246343.htm
REMARKS OF TREASURY SECRETARY HENRY M. PAULSON BEFORE THE OFFICE OF
THRIFT SUPERVISION NATIONAL HOUSING FORUM
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp193.htm
Washington, DC -Good morning. Thanks, John, for your introduction,
and
thanks to you and your team for hosting today's forum. One of the
things which I quickly learned after coming to Washington is that we
really have a first-rate team in the Department – throughout all our
bureaus. And it is gratifying for me to see some of the outstanding
work being accomplished by the Treasury Department.
I have with me today two members of our Domestic Finance team. Some
of
you may know them already. Bob Steel is the Undersecretary for
Domestic Finance and Emil Henry is Assistant Secretary for Financial
Institutions. Bob and Emil have a wealth of experience in the world
of
finance and they will be involved in some of the key discussions
relating to the housing industry.
At Treasury, we are charged with keeping America on the path of
long-term sustainable growth. And increasingly that task requires a
global outlook. Tomorrow I will head to China to participate in the
first meeting of our Strategic Economic Dialogue. Several Cabinet
Secretaries and agency heads will be in the delegation. And we'll be
joined by Ben Bernanke of the Fed.
The Strategic Economic Dialogue is a forum for discussing China's
successful integration into the global economy and making sure that
China stays on the path of market-based reform. We'll be discussing
the importance of a sustainable growth in China which improves the
balance of trade. We will discuss ways to continue opening China's
market to trade, competition, and investment. And we'll discuss our
common interest in increasing energy efficiency and strengthening
environmental stewardship.
The benefit of the Strategic Economic Dialogue is that we can meet
with senior Chinese leaders who have responsibility for a range of
subjects and consider these questions comprehensively. Rather than
going issue by issue, we can look at all the items on the agenda and
have conversations that really try to move the ball forward in many
different areas: Currency, rule of law, intellectual property – all
the issues that have become a familiar part of our relationship with
China.
I'm looking forward to the trip. I think it will be a good
discussion
that lays the groundwork for important progress down the line. Our
outlook with China has to be long-term. There is a tendency in
Washington to want immediate answers, but a relationship this
important will have consequences for our economy and for our nation
over generations. The work we do this week and in future meetings
should all be with an eye toward building a cooperative relationship
for many years.
More and more, the people of China are realizing the benefits of a
market-based economy. And as long-time practitioners of market
economics, Americans have a lot of expertise to offer. From the
founding of our country, Americans have worked to achieve big
dreams,
to improve their lives and the lives of their children. They've
looked
to the market to find a good job, to finance their entrepreneurial
ideas, and of course to realize the epitome of the American Dream:
homeownership.
Homeownership is a goal that unites Americans across racial, ethnic,
and income lines. President Bush is particularly pleased that
minority
homeownership rates have increased in recent years, as overall
homeownership levels have reached new heights. And throughout the
Administration, we continue to look for ways to increase access to
capital and financing, so that people who work hard and save can one
day walk across the threshold of their very own home.
The value of mortgage products in the United States has grown
significantly. As of September, outstanding mortgage debt totaled
roughly $ 12.8 trillion – an increase of more than $5 trillion since
the beginning of the decade. And today's mortgage-backed securities
marketplace features substantial liquidity. The daily trading
average
of Agency Mortgage Backed Securities is nearly $244 billion, up from
$38 billion a decade ago.
Fostering a robust mortgage lending industry and mortgage securities
marketplace is an essential mission of the Treasury Department.
The housing sector makes significant contributions to our economy.
Residential construction accounts for about five-and-a-half percent
of
GDP, or three-quarters of a $1 trillion in spending. And it directly
accounts for about 3 percent of total employment in the U.S.
Activity in the housing sector helped to drive our recovery out of
the
recession of 2001. From 2003 to 2005, housing activity added about
half a percentage point to overall GDP growth each quarter.
This year, activity in the sector has slowed down. But the overall
health of our economy continues to be strong.
Our rate of growth for the last several years, particularly in the
housing industry, had not been sustainable. As you all know, we have
had a correction in the housing industry and we are in the process
of
transitioning to a more sustainable growth rate. Fortunately we have
a
diverse economy and consumer spending, the service sector, and
corporate profits remain strong. And I believe that our economy
remains strong. Unemployment is low, jobs are being created – more
than seven million new jobs since August 2003 – and wages are
rising,
which means more Americans are realizing the benefits of our strong
economy.
Your discussions throughout the day will help us to formulate a
forward-looking strategy for a vital part of the American economy.
From the Treasury perspective, we want to make sure that we have the
right guidance in place to help people access home financing without
taking unnecessary risks. Expanding opportunities for more people to
buy a home is a good thing. But we do not want Americans to become
over-extended and see their dream end in foreclosure.
These are important conversations that will have a real impact on
people's lives. I appreciate your work to help more Americans
achieve
the dream of homeownership, and I look forward to learning about
your
views. Thanks again to OTS for bringing this forum together. And
thank
you all very much.
PREPARED REMARKS OF STUART LEVEY UNDER SECRETARY FOR TERRORISM AND
FINANCIAL INTELLIGENCE BEFORE THE US-MENA PRIVATE SECTOR DIALOGUE ON
COMBATING MONEY LAUNDERING AND TERRORIST FINANCING
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp192.htm
New York, NEW YORK– Thank you for inviting me to speak today. It is
a
true honor to be here with the financial leaders of the Middle East,
North Africa, and United States, both public and private sector
alike,
and I want to thank everyone for making the trip to attend this
important conference. I also want to thank the Union of Arab Banks
and
the other sponsors of the US-Middle East & North Africa (MENA)
Private
Sector Dialogue for their vision in creating this critical and
unique
opportunity, as well as the Federal Reserve Bank of New York for its
leadership in hosting and helping to organize this important event.
As I stand here today, the world remains a dangerous place, and
while
terrorism continues to present an ongoing and very real and deadly
threat, we are also faced with other threats to our collective
international security – including those from state sponsors of
terrorism such as Iran and Syria, as well as the threats posed by
proliferators of weapons of mass destruction, kleptocrats, narcotics
traffickers, and other illicit actors. While we have made important
progress since September 2001, we still have a long way to go to
ensure that we utilize all the elements of our national and
institutional power against them.
That is why this conference and others like it are so important.
The
threats we face share two characteristics that make them vulnerable
to
the collective efforts of the people in this room: (1) each of them
depends on an underlying financial network that we can exploit, (2)
each of them operates without regard to international political
boundaries in part by using a financial system that itself is truly
global and knows no boundaries. While these criminal and terrorist
networks are susceptible to our collective efforts, we will not
defeat
them unless we truly do act collectively: both by deepening the
partnerships among our governments and by strengthening partnerships
between governments and private sector leaders like those assembled
here. As we kick off this critical conference, I would like to
touch
on some of the advances we have made and also explain how I believe
we
can improve our collective efforts.
Within governments around the world, one of the most important
advances we have made is the new role being played by officials with
responsibility for the global financial system. Counterterrorism
and
security policy has traditionally been the responsibility of foreign
ministries, defense officials, law enforcement bureaus and
intelligence agencies, rather than finance ministers and central
bankers. Yet today, we are seeing finance officials working
side-by-side with officials in security ministries to meet the
government's first responsibility: ensuring the safety of its
citizens. More and more, officials in finance ministries and central
banks around the world recognize that it is not enough to stimulate
investment, promote open markets, and so forth. For our economic
efforts to succeed, for us all to reap the benefits of the global
financial system, we must keep it secure from those who threaten its
integrity.
This trend is certainly apparent here in the United States. As our
government took stock of its tools to combat terrorism after 9/11,
it
became clear that the Treasury Department had distinctive
authorities
and capabilities to apply against these international security
threats. The Treasury quickly assumed a new role in U.S. national
security policy as we began to apply these unique authorities in
creative ways. One result was the creation of the office I oversee,
the Office of Terrorism and Financial Intelligence.
The intelligence component of our efforts is particularly important.
For the first time in U.S. history – and likely the first time
worldwide – we set up an Office of Intelligence and Analysis within
the Treasury Department to bring the knowledge of the intelligence
community to bear on the evolving threat of illicit finance. Having
such a capability within the Treasury is a tremendous innovation
because we are able to focus our attention on the financial networks
that underlie terrorist and other threatening organizations. These
money trails don't lie, making financial intelligence uniquely
reliable as it allows us to map out these networks, uncover
previously
unknown connections, and, ultimately, apply pressure to these
networks.
Our use of financial enforcement authorities together with other
governments around the world has had a demonstrable impact – with
respect to both systemic vulnerabilities and against specific
targets
of key concern. As we have seen in the terrorism context, they give
us
a concrete way in which to target directly those individuals and
entities we know are bad actors. We have established international
standards and controls through the Financial Action Task Force,
developed FATF-Style Regional Bodies, and partnered with the
International Financial Institutions. On several occasions, the
United Nations has called upon us in Security Council Resolutions to
apply financial measures against threats such as al Qaida, the
former
regime of Saddam Hussein in Iraq, other rogue regimes like that of
Charles Taylor, and proliferators of weapons of mass destruction
such
as North Korea.
But we can do better. For example, finance ministries and central
banks must develop and implement effective programs to combat these
threats, including targeted financial sanctions regimes. We must
monitor the financial activities of known terrorists and
proliferators
and prohibit their access – and that of their support networks – to
the financial system. We must also go beyond simply designating
individuals and entities that have been named by UN and proactively
identify terrorist supporters that threaten our societies, hold them
publicly accountable, isolate them financially and commercially, and
ensure that all of their activities, whether seemingly legitimate or
illicit, are shut down.
Over the past two years, we have learned a number of lessons about
how
best to use financial tools to apply financial pressure and isolate
terrorists, proliferators, and others whose goal it is to undermine
our security. As a result, we are relying more and more on what we
call "targeted" measures, aimed at specific actors engaged in
illicit
conduct. And, as I will describe, we are working in greater
partnership with the private sector. Rather than fighting against
their interests and tendencies, we have found a way to form somewhat
of a natural alliance.
These kinds of measures have several advantages over broad-based
sanctions programs. First, because they single out those
responsible
for supporting terrorism, proliferation, and other criminal
activities, rather than an entire country, they are more apt to be
accepted by a wider number of international actors and governments.
We do not face political hurdles when we try to persuade others to
act
against particular individuals and entities based on their conduct
as
we do when we seek action against a whole nation or regime.
Second, the deterrent and indirect effects of these types of
measures
are sometimes just as significant as their direct result. Take
terrorist financing as an example. The terrorist operative who is
willing to strap on a suicide belt is not susceptible to deterrence,
but the individual donor who wants to support violent jihad may well
be. Terrorist financiers typically live in polite society with all
that entails: property, occupation, family, and social position.
Being
publicly identified as a financier of terror and being cut off from
the world's financial system threatens an end to that "normal" life.
I firmly believe that one of the positive, if immeasurable, effects
of
our terrorist financing efforts is that many would-be donors have
been
dissuaded from funding terrorism.
The most important lesson we have learned is that we have a natural
alliance with those of you in the private sector – an alliance that
we
need to strengthen through conferences like this one. Indeed, when
it
comes to targeted measures aimed at specific actors and entities
that
seek to exploit the financial system, we share common interests and
objectives with the private financial community: You want to
identify
and avoid dangerous or risky customers who could harm your
reputations
and business, and we want to inform of you of those risks with a
view
to ensuring that they are effectively addressed. As governments, we
have a responsibility to promote these partnerships with the private
sector and provide you with the information you need to help protect
the financial system from abuse. Such a partnership allows banks to
make informed decisions about the business they choose to do and the
business they choose to avoid.
We are working hard to develop and enhance ways to share this type
of
information with the private sector so that financial institutions
and
others are able to apply their resources and controls effectively.
We
are also working to better assist the sector in reporting the
critical
information required to advance our international security
interests.
As I have traveled and met with banking officials around the world,
I
have seen more and more financial institutions wanting to play a
central role in fighting illicit finance, from partnering with their
respective governments to share information, or complying with
OFAC's
various sanctions programs though under no legal obligation to do
so,
or making conscious decisions to cut off business with known
terrorists and rogue regimes.
Why do they do that? There are two reasons: The primary reason is
that, regardless of the underlying law in any particular country,
most
bankers truly want to avoid facilitating proliferation, terrorism,
or
crime. These are responsible corporate citizens and they frankly
just
don't want to be part of any bad conduct. Second, avoiding these
risks is simply good business. Banks need to manage risk in order
to
preserve their corporate reputations. Keeping a few customers that
have been identified as terrorists or proliferators is not worth the
risk of facing public scrutiny or a regulatory action that may
impact
on their ability to do business with the United States or the
responsible international financial community. More and more, I
believe that private financial institutions are realizing that these
efforts – while they do impose some costs – are ultimately good for
business. Banks that meet and exceed international standards for
anti-money laundering practices, are known to reject illicit
business,
and firmly root these issues of integrity in their corporate
cultures
are increasingly attractive partners for international investors and
for clients exposed to multiple legal jurisdictions.
All of these considerations are especially strong for those
operating
in the Middle East and North Africa. You are at a cross-roads, and
the business and policy decisions made by government regulators and
financial institutions in the region will play a critical role in
protecting the world's financial system from abuse. There has
already
been significant progress in the region, as several countries have
made strides in developing and implementing anti-money laundering
and
terrorist financing regimes. The creation of the MENA-FATF and the
commitment of its members to work towards compliance with the
comprehensive set of international standards is another important
achievement. The work of that organization will translate into
stronger controls, greater transparency in the financial system,
and,
in turn, a more attractive venue for business.
We need to build on these successes by ensuring that all MENA
countries adopt comprehensive money laundering and terrorist
financing
legislation and regulation, as well as the infrastructure and
expertise to maintain and grow such systems. And we need your
leadership to increase the vigilance of the private sector on all of
these issues.
Sadly, we still face grave threats from all corners of the globe,
and
each day I worry about those who are intent on committing violent
terrorist acts or otherwise threatening our way of life. Both
governments and the private sector alike must do everything in our
power to combat these threats to our national and economic security.
Bankers and governments are natural allies in this effort. We all
live and work in an environment that knows no borders. It is truly
a
global financial system and we all have a responsibility to protect
it. I look forward to working with you in that partnership, both at
this conference and in the future.
TREASURY DESIGNATIONS TARGET TERRORIST FACILITATORS
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp191.htm
The U.S. Department of the Treasury today designated five
individuals
for providing financial support to al Qaida and other terrorist
organizations, as well as facilitating terrorist activity. The
individuals were designated pursuant to Executive Order 13224 and
added to the Treasury's list of Specially Designated Global
Terrorists.
"These individuals support every stage of the terrorist life-cycle,
from financing terrorist groups and activity, to facilitating deadly
attacks, and inciting others to join campaigns of violence and hate.
The civilized world must stand united in isolating these
terrorists,"
said Stuart Levey, Treasury's Under Secretary for Terrorism and
Financial Intelligence.
This designation freezes any assets the designees may have under
U.S.
jurisdiction and prohibits all financial and commercial transactions
by any U.S. person with the designees. In addition, in accordance
with
U.N. Security Council Resolution 1624, the U.S. Government condemns
those who incite others to acts of terrorism and violence.
Identifying Information
Najmuddin Faraj Ahmad
Name: Najmuddin Faraj Ahmad
AKAs: Mullah Krekar
Fateh Najm Eddine Farraj
Faraj Ahmad Najmuddin
DOB: 7 JULY 1956
Alt. DOB: 17 JUNE 1963
POB: Olaqloo Sharbajer Village, Al-Sulaymaniyah Governorate, Iraq
Citizenship: Iraq
Address: Heimdalsgate 36-V, 0578 Oslo, Norway
Krekar Provides Support to Ansar al-Sunnah
Najmuddin Faraj Ahmad, a.k.a. Mullah Krekar (Krekar), founded in
December 2001 the Kurdish terrorist group Ansar al-Islam (AI), now
known as Ansar al-Sunnah (AS), and served as AI's first leader.
As of spring 2005, a non-governmental organization founded by Krekar
sent money to terrorist organizations and actively recruited
European
citizens into terrorist organizations. Branches of the NGO were, as
of
spring 2005, overtly and covertly gathering money and recruiting
personnel for AS. Krekar has visited Germany several times and
during
these trips conducted fundraising for AS and performed logistical
activities. Information shows that in January 2006, Krekar may have
routed funds through associates in Bulgaria and Iraq to support AS
in
Iraq.
As of fall 2005, AS reportedly had established at least two sniper
teams in Iraq; the founder of these teams claimed to be Krekar's
representative in Iraq. Krekar also traveled regularly from Norway
to
the Iraqi Kurdish area. During one of his longer stays in northern
Iraq, Krekar appears to have recruited and trained combatants.
Other Information
Apart from the instances of direct facilitation of terrorist groups
which form the basis for his designation, Krekar has exhorted others
to violence and supplied religious justifications for murder. In a
2004 interview, Krekar supported holy war in Iraq and identified
legitimate targets, stating "Not just the officers, but also the
civilians who help the Americans. If anyone so much as fetches them
a
glass of water, he can be killed. ... Everyone is a target. If an
aid
organization gives the Americans as much as a glass of water, they
will become a target."
Hamid Al-Ali
Name: Hamid Al-Ali
AKAs: Dr. Hamed Abdullah Al-Ali
Hamed Al-`Ali
Hamed bin `Abdallah Al-`Ali
Hamid bin Abdallah Ahmed Al-Ali
Hamid `Abdallah Ahmad Al-`Ali
Abu Salim
Hamid `Abdallah Al-`Ali
DOB: 20 JANUARY 1960
Citizenship: Kuwait
Hamid Al-Ali is a Kuwait-based terrorist facilitator who has
provided
financial support for al Qaida-affiliated groups seeking to commit
acts of terrorism in Kuwait, Iraq, and elsewhere.
Al-Ali Provides Support for al Qaida in Iraq
Evidence shows that Al-Ali's efforts include providing support for
terrorist organizations, including those in Iraq. Along with Jaber
Al-Jalamah and Mubarak Mushakhas Sanad Al-Bathali, also designated
today, Al-Ali recruits jihadists in Kuwait for terrorist activity
including for al Qaida in Iraq. Al-Ali has provided financial
support
for recruits, including paying for their travel expenses to Iraq.
Al-Ali Provides Funds for al Qaida-Associated Terrorist Cells in
Kuwait
Al-Ali was a religious leader and financier for a Kuwait-based
terrorist cell that plotted to attack U.S. and Kuwaiti targets in
early 2005. The al Qaida-associated terrorist cell appears to have
been under his supervision. Al-Ali reportedly visited the group's
terrorist camps in Kuwait, providing funds supporting acts of
terrorism.
In addition to financial support and recruiting services, Al-Ali
also
provided opportunities for potential recruits to obtain explosives
training in 2004. He also used his website to provide technical
advice
for making explosives, chemical, and biological weapons.
Other Information
Separate from the financial and other services in support of
terrorist
groups for which Al-Ali is being designated, he has issued fatwas
legitimizing suicide operations. One such fatwa sanctions "the
permissiveness, and sometimes necessity, of suicide operations, on
the
condition of crushing the enemy ... or causing moral defeat to the
enemy, to obtain victory." According to this fatwa, "in modern
time(s)
this can be accomplished through the modern means of bombing, or by
bringing down an airplane on an important site that causes the enemy
great casualties."
Jaber Al-Jalamah
Name: Jaber Al-Jalamah
AKAs: Jabir `Abdallah Jabir Ahmad Al-Jalamah
Jabir Abdallah Jabir Ahmad Jalahmah
Jaber Al-Jalahma
Abu Muhammad Al-Jalahmah
Abu Muhammad
Jabir Al-Jalhami
`Abdul-Ghani
DOB: 24 SEPTEMBER 1959
Nationality: Kuwaiti
Passport #: 101423404
Jaber Al-Jalamah is a Kuwait-based terrorist facilitator who has
provided financial and logistical support to the al Qaida network in
Afghanistan, Iraq and Kuwait. Al-Jalamah has also provided recruits
for these efforts.
Al-Jalamah Recruits and Provides Financial Support for al Qaida in
Iraq
As of 2006, Al-Jalamah supports activities and operations against
coalition forces in Iraq. As early as 2004, Al-Jalamah was
coordinating a recruitment effort to send fighters and funds to al
Qaida in Iraq. He facilitated travel for men he recruited and for
men
recruited by Kuwaiti imams. Al-Jalamah sent three kinds of people
into
Iraq: suicide bombers, anti-coalition fighters, and couriers who go
to
Iraq to provide funds for anti-coalition fighters.
Al-Jalamah has sent a significant number of men to join al Qaida in
Iraq. These operatives carried funds collected by Al-Jalamah for
provision to the terrorist group. Trusted associates were sometimes
given thousands of dollars to transport from Kuwait into Iraq.
Al-Jalamah Provides Support for al Qaida Associates in Kuwait,
Afghanistan and Pakistan
As of 2004, Al-Jalamah was considered the leader of a group of
terrorists in Kuwait, some of whom he recruited for activity in
Afghanistan. Al-Jalamah collected and funneled money to al
Qaida-associated individuals in Kuwait, providing thousands of
Kuwaiti
dinars to al Qaida-associated operatives on a regular basis,
including
to Muhsin al-Fadhli. Al-Fadhli is listed at the UN 1267 Sanctions
Committee.
Soon after September 11, 2001, Al-Jalamah sent supplies to
Afghanistan
for use by trainees. In mid-2001, Al-Jalamah sent a Kuwaiti
individual
to Afghanistan where he attended the al Qaida-associated al-Faruq
training camp. Al-Jalamah gave the Kuwaiti money to transfer to al
Qaida. Al-Jalamah also sent recruits and supplies to al Qaida camps
in
Afghanistan. In the late 1990s/early 2000s, Al-Jalamah also visited
the al-Faruq training camp, supplying global-positioning systems,
laptop computers, and a video camera.
Al-Jalamah's role with al Qaida includes dealing personally with
Usama
bin Laden. Al-Jalamah went to Afghanistan three times in the late
1990s/early 2000s to provide bin Laden large sums of money. During a
2001 meeting, bin Laden agreed to set up a training camp especially
for Kuwaitis in Afghanistan. This plan was reportedly never put into
action.
Al-Jalamah Provided Support for an Attack against Americans
Al-Jalamah was involved in the planning of the January 21, 2003, al
Qaida-linked terrorist attack on two U.S. civilian contractors in
Kuwait. He provided support and assistance to one of the
perpetrators.
Mubarak Mushakhas Sanad Al-Bathali
Name: Mubarak Mushakhas Sanad Al-Bathali
AKAs: Mubarak Al-Bathali
Mubarak Mishkhis Sanad Al-Bathali
Mubarak Mishkhas Sanad Al-Bathali
Mubarak Mishkhis Sanad Al-Badhali
Mubarak Mishkhas Sanad Al-Bazali
Mobarak Meshkhas Sanad Al-Bthaly
DOB: 1 OCTOBER 1961
Passport: 101856740 Kuwait
Citizenship: Kuwait
Mubarak Mushakhas Sanad Al-Bathali is a Kuwait-based terrorist
facilitator. He also serves as a fundraiser and recruiter for the al
Qaida network. Al-Bathali has spoken at several mosques in Kuwait to
raise funds for provision to al Qaida operatives. As of 2006,
Al-Bathali continues to facilitate travel for extremists planning to
fight in Iraq and Afghanistan.
Al Bathali Provides Support to the al Qaida Network
Al-Bathali has raised funds in Kuwait for terrorist organizations
for
years. In 2004, Al-Bathali gathered several hundred Kuwaiti dinars
each week for terrorist organizations, including al Qaida, Ansar
al-Islam and Lashkar E-Tayyiba. In 2003 and 2004, Al-Bathali
provided
funds to al Qaida in Iraq through intermediaries. In 2002-2003,
Al-Bathali contributed $20,000 to Ansar al-Islam through contacts in
Syria. In 2001, Al-Bathali sent a courier to carry approximately
$20,000 to an al Qaida finance manager in Pakistan. Prior to this,
in
1999, Al-Bathali met with several top al Qaida members and gave them
roughly $100,000.
Other Information
In 2002, Al-Bathali traveled to Saudi Arabia to meet with several
radical leaders who were involved with al Qaida to discuss jihad and
arrange for the transfer of funds to him.
In 2003, Al-Bathali reiterated his objectives of recruiting Muslim
youth in the Arabian Gulf, especially in Saudi Arabia and Kuwait, to
support the fighters in Iraqi Kurdistan. This support was to include
collecting donations for Muslim fighters and distributing CDs about
Ansar al-Islam.
In January 2003, Al-Bathali and Al-Jalamah met with an individual
who
was involved in the shooting of two U.S. contractors outside of Camp
Doha, Kuwait, and discussed financing his militant training
operations.
Mohamed Moumou
Name: Mohamed Moumou
AKAs: Mohamed Mumu
Abu Shrayda
Abu Amina
Abu `Abdallah
Abou Abderrahman
DOB: 30 JULY 1965
Alt. DOB: 30 SEPTEMBER 1965
POB: Fez, Morocco
Citizenship: Morocco
Citizenship: Sweden
Passport: 9817619, Expires 14 DECEMBER 2009 (Sweden)
Address: Storvretsvagen 92, 7 TR. C/O Drioua, 142 31 Skogas, Sweden
Address: Jungfruns Gata 413, Postal Address Box: 3027, 13603
Haninge,
Sweden
Address: London, England
Address: Dobelnsgatan 97, 7 TR C/O Lamrabet, 113 52 Stockholm,
Sweden
Address: Trodheimsgatan 6, 164 32 Kista, Sweden
Mohamed Moumou's extremist activities date back to the mid-1990's,
when he traveled to Afghanistan to participate in the al Qaida-run
Khalden terrorist training camp. A Moroccan national with Swedish
citizenship, Moumou was the uncontested leader of an extremist group
centered around the Brandbergen Mosque in Stockholm, Sweden.
Moumou's
leadership derives from connections to senior al Qaida leaders, some
of whom he had met in Afghanistan and Pakistan in the late-1990s.
Moumou reportedly served, at some time in the past, as Abu Mus'ab
al-Zarqawi's representative in Europe for issues related to chemical
and biological weapons. Moreover, Moumou reportedly maintains ties
to
al-Zarqawi's inner circle in Iraq.
TREASURY TARGETS HIZBALLAH FUNDRAISING NETWORK IN THE TRIPLE FRONTIER
OF ARGENTINA, BRAZIL, AND PARAGUAY
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp190.htm
The U.S. Department of the Treasury today designated nine
individuals
and two entities that have provided financial and logistical support
to the Hizballah terrorist organization. The designees are located
in
the Tri-Border Area (TBA) of Argentina, Brazil, and Paraguay and
have
provided financial and other services for Specially Designated
Global
Terrorist (SDGT) Assad Ahmad Barakat, who was previously designated
in
June 2004 for his support to Hizballah leadership.
"Assad Ahmad Barakat's network in the Tri-Border Area is a major
financial artery to Hizballah in Lebanon," said Adam Szubin,
Director
of the Office of Foreign Assets Control (OFAC). "Today's action aims
to disrupt this channel and to further unravel Barakat's financial
network."
This designation was taken pursuant to Executive Order 13224, which
is
aimed at shutting down the financial flows supporting terrorism.
Designations prohibit transactions or dealings between U.S. persons
and the named individuals and entities and also freeze any assets
they
may have under U.S jurisdiction.
Identifying Information
Muhammad Yusif Abdallah
Muhammad Yusif Abdallah is a senior Hizballah leader in the TBA and
an
important contributor of funds to Hizballah, notably hosting a
fundraiser for the terrorist group in the TBA in 2004. Abdallah has
personally carried money for Hizballah, serving as a courier of
Hizballah funds from the TBA to Lebanon. He has traveled to Lebanon
to
maintain connections to the Hizballah hierarchy and has met with
members of Hizballah's security division. Likewise, Abdallah has
also
received money from Hizballah to support the Hizballah network in
the
TBA.
Abdallah is an owner and manager of the Galeria Page building in
Ciudad del Este, Paraguay, a shopping center with several businesses
owned by Hizballah members. He reportedly pays a percentage of his
income to Hizballah based on profits he receives from Galeria Page.
In
addition to his Hizballah-related activities, Abdallah has also been
involved in the import of contraband electronics, passport
falsification, credit card fraud, and trafficking counterfeit U.S.
dollars.
Hamzi Ahmad
Barakat
Hamzi Ahmad Barakat is a member of Hizballah in the TBA suspected of
trafficking in narcotics, counterfeit U.S. dollars, arms, and
explosives. He has owned and held the position of general manager of
Casa Hamze, a store in the Galeria Page shopping center that has
employed Hizballah members and has served as a source of funding for
Hizballah. Hamzi Ahmad Barakat and SDGT Assad Ahmad Barakat are
brothers and have been partners at Casa Hamze.
Hatim Ahmad Barakat
Information passed from the Barakat network to Hizballah in Lebanon
goes mainly through two individuals: SDGT Assad Ahmad Barakat and
his
brother Hatim Ahmad Barakat. Hatim Ahmad Barakat has traveled to
Chile
to collect funds intended for Hizballah, and as of early 2003, he
was
reported to be a significant shareholder in at least two businesses
in
Iquique, Chile believed to generate funds in support of Hizballah.
Hatim Ahmad Barakat traveled frequently to Iquique, Chile and is
possibly managing or assisting a group of suspected Hizballah
members.
Hatim Ahmad Barakat reportedly oversees the sending of funds from
Iquique to Hizballah in Lebanon.
Hatim Ahmad Barakat has maintained business relationships with
senior
Hizballah leaders in the TBA and is deeply involved in Assad Ahmad
Barakat's business affairs, having co-owned several companies with
him. Hatim Ahmad Barakat co-owned SDGT Casa Apollo with brothers
Assad
and Hamzi Ahmad Barakat.
Muhammad Fayez Barakat
Muhammad Fayez Barakat is responsible for the Barakat network's
finances in the TBA, and in this capacity he arranges the transfer
of
money from the TBA to the Middle East. As recently as July 2006,
Muhammad Fayez Barakat collected money on behalf of Hizballah in the
TBA, hosting fundraisers for Hizballah in the region and sending
money
to the terrorist group in Lebanon. Muhammad Fayez Barakat has also
provided financial assistance to his cousin, SDGT Assad Ahmad
Barakat.
Muhammad Tarabain Chamas
Muhammad Tarabain Chamas is a member of Hizballah in the TBA,
specifically Hizballah's counterintelligence element in the TBA and
provides Hizballah with security information on residents there.
Muhammad Tarabain Chamas is the private secretary for senior TBA
Hizballah leader Muhammad Yusif Abdallah and the principal
administrator of the Galeria Page building in Ciudad del Este,
Paraguay. In addition to maintaining close contacts with TBA
Hizballah
members, Muhammad Tarabain Chamas maintains daily contact with
Hizballah members in Lebanon and Iran and has transported funds from
Hizballah members in the TBA to Hizballah in Lebanon.
Saleh Mahmoud Fayad
Saleh Mahmoud Fayad has served as a counterintelligence operative
for
Hizballah in the TBA, and as of late July 2006, collected money on
behalf of Hizballah in the TBA. In 2000, Saleh Mahmoud Fayad
reportedly traveled to Lebanon and Iran and met with senior
Hizballah
leadership.
Sobhi Mahmoud Fayad
Sobhi Mahmoud Fayad has been a senior TBA Hizballah official who
served as a liaison between the Iranian embassy and the Hizballah
community in the TBA. He has also been a professional Hizballah
operative who has traveled to Lebanon and Iran to meet with
Hizballah
leaders. Fayad received military training in Lebanon and Iran and
was
involved in illicit activities involving drugs and counterfeit U.S.
dollars. Sobhi Mahmoud Fayad has also served as Assad Ahmad
Barakat's
executive assistant.
Sobhi Mahmoud Fayad was sentenced to a six and a half year prison
sentence in Paraguay for tax evasion. During his trial in 2002, the
counterterrorism unit of the Paraguayan National Police described
Sobhi Mahmoud Fayad's money transfers to a Hizballah-controlled
charity in Lebanon.
Ali Muhammad Kazan
According to information available to the U.S. Government, Ali
Muhammad Kazan possibly succeeded Assad Ahmad Barakat as the leader
in
the political structure of Hizballah in the TBA. He also reportedly
served as a commanding member of counterintelligence for Hizballah
in
the TBA. As of August 2006, Ali Muhammad Kazan helped raise more
that
$500,000 for Hizballah from Lebanese businessmen in the TBA. Since
2001, he traveled frequently to Lebanon to receive guidance and
instructions from Hizballah leaders, including a message from
Hizballah Secretary General Hassan Nasrallah. Ali Muhammad Kazan
also
maintained close commercial ties to SDGT Assad Ahmad Barakat.
Farouk Omairi
Farouk Omairi is a principal member of the Hizballah community in
the
TBA and served as a coordinator for Hizballah members in the region.
Farouk Omairi has been a key figure in the procurement of false
Brazilian and Paraguayan documentation and has assisted individuals
in
the TBA with obtaining Brazilian citizenship illegally through the
submission of false documentation. Farouk Omairi was also involved
in
narco-trafficking operations between South America, Europe, and the
Middle East.
Casa Hamze
Casa Hamze is an electronics company located at the Galeria Page
shopping center in Ciudad del Este, Paraguay. The store is owned by
Hizballah member Hamzi Ahmad Barakat and has employed Hizballah
members in the TBA. Money was reportedly sent from Casa Hamze to
Hizballah.
Galeria Page
Galeria Page, a shopping center in Ciudad del Este, Paraguay, serves
as a source of fundraising for Hizballah in the TBA and is locally
considered the central headquarters for Hizballah members in the
TBA.
Galeria Page is managed and owned by TBA Hizballah members,
including
members of the Barakat network. Local Hizballah members operate
businesses within Galeria Page and funds generated from these
businesses support Hizballah. Muhammad Yusif Abdallah, a manager of
Galeria Page, paid a regular quota to Hizballah based on profits he
received from Galeria Page. Shops in the building have also been
involved in illicit activity, including the sale of counterfeit U.S.
dollars.
OPENING STATEMENT OF PHILLIP L. SWAGEL, NOMINEE, ASSISTANT SECRETARY
FOR ECONOMIC POLICY BEFORE THE SENATE FINANCE COMMITTEE
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp189.htm
Chairman Grassley, Ranking Member Baucus, and Members of the
Committee, thank you for the opportunity to appear before you today.
I
am honored to be President Bush's nominee to be Assistant Secretary
of
the Treasury for Economic Policy, and I thank the President and
Secretary Paulson for their confidence in me.
I am especially grateful to my family for both their encouragement
and
their forbearance in permitting me to seek to return to government
service. I would also like to thank my mother, Deanna Epstein, for a
lifetime of support, and my stepfather, David Epstein, for his
continued encouragement--and for his courage 25 years ago in
marrying
into a family with three teenage boys. I can only hope and believe
that my late father, Michael Swagel, would have been pleased and
proud
at this day.
In my professional career, I have had the good fortune to work with
talented colleagues and to learn from supportive mentors at the
Federal Reserve, the International Monetary Fund, and the Council of
Economic Advisers. If confirmed, I will be fortunate to work with
the
dedicated Treasury professionals led by Secretary Paulson and will
contribute my professional experience to the Administration's
efforts
to tackle the economic challenges facing this country.
Much of my economic research has focused on the impact of
international influences and technological and demographic change on
the U.S. economy. I am mindful of the effects that these changes can
bring about and the economic challenges facing Americans. If
confirmed
as Assistant Secretary for Economic Policy, I will be especially
aware
of the importance of ensuring that the prosperity of our nation
benefits all Americans.
Thank you again Mr. Chairman for the privilege of appearing before
this Committee. If confirmed, I can assure you I will work closely
and
enthusiastically with the Members of this distinguished committee. I
would be pleased to respond to your questions.
OPENING STATEMENT OF ANTHONY RYAN, NOMINEE, ASSISTANT SECRETARY FOR
FINANCIAL MARKETS BEFORE THE SENATE FINANCE COMMITTEE
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp188.htm
Chairman Grassley, Ranking Member Baucus, and members of the Finance
Committee, thank you for inviting me to appear before you today. I
am
honored that President Bush has nominated me to serve as the
Assistant
Secretary of the Treasury for Financial Markets, and I am especially
grateful for Secretary Paulson's trust and confidence. I am also
indebted to my family – from my parents who instilled in me strong
values, to my wife Ann, and to our four children who have all
supported my decision to serve.
If confirmed, I look forward to working with Secretary Paulson,
Under
Secretary Steel and the rest of the Treasury team, along with others
in the Administration and Congress, on the myriad of issues
impacting
our financial markets.
Our financial markets play a seminal role in helping our economy
achieve sustainable growth. We possess the largest, most liquid and
most efficient financial markets in the world. We must build on this
foundation and continue to ensure our financial markets not only
remain strong, but gain in strength. If confirmed, I would very much
look forward to contributing to that effort.
U.S. Treasury obligations are respected around the world as they
reflect the safety and soundness of our markets, as well as the
quality of our economy. As stewards, I believe we have an obligation
to our citizens to manage the government's fiscal matters most
effectively. The collective results impact every American – directly
and indirectly. If confirmed, I would work to fulfill that
obligation
by implementing sound policy, addressing the strategic issues and
responsibly managing the specific functions within the office.
Over the past 20 years, I have had the opportunity to directly
participate in the financial markets, either investing or advising
many institutional pension clients, endowments, and mutual fund
boards. Having managed multi-asset class portfolios, traded in
capital
markets around the world, and worked with many global investors, I
have developed a broad perspective and appreciation for the U.S.
financial markets, the institutions which regulate them and the
aggregate role they play in facilitating our economic growth and
savings.
Successfully managing our financial matters requires a collaborative
effort. For that to occur, we must recognize the critical importance
of communication. If confirmed, I would seek to ensure a
constructive
dialogue with members of this Committee and your staffs, as well as
others – including those in the global marketplace. The Treasury
Department, under the leadership of Secretary Paulson, is very
committed to fulfilling its mission, and if confirmed, I would
welcome
the opportunity to contribute to the Treasury Department's
longstanding tradition of excellence.
I appreciate the time that members of this Committee have taken to
consider my nomination, and I would be happy to answer any
questions.
OFAC AND NEW YORK STATE BANKING DEPARTMENT TO EXCHANGE INFORMATION ON
BANK COMPLIANCE
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp187.htm
The U.S. Department of the Treasury's Office of Foreign Assets
Control
(OFAC) and the New York State Banking Department today announced the
signing of a Memorandum of Understanding (MOU) that outlines
procedures for the exchange of sanctions compliance and enforcement
information between the two agencies.
The MOU is the first such agreement patterned on a template
developed
by OFAC and the Conference of State Bank Supervisors (CSBS). The
procedures specified in the MOU will facilitate the sharing of
information on sanctions violations and other deficiencies, whether
those deficiencies are found by OFAC or during examinations
conducted
by state banking regulators.
"The signing of this MOU will enhance cooperation between our
agencies
as we work together to safeguard the financial system from illicit
conduct and assure that it is not used to finance terrorism,
narcotics
trafficking, or to otherwise circumvent U.S. sanctions," said OFAC
Director Adam Szubin. "I look forward to building on the important
step we have taken with New York by executing similar agreements
with
other states and territories."
"The information-sharing procedures agreed upon in this MOU will
enable more efficient detection and prevention of crimes conducted
through our financial system," said Superintendent Diana Taylor. "It
will enhance our work with OFAC to ensure the safety and soundness
of
financial institutions in New York State and throughout the world."
In mid-October, CSBS President and CEO Neil Milner strongly urged
all
state banking departments to adopt the model MOU. "Our goal is to
obtain signatures from all 50 states to cement this relationship
with
OFAC," he said.
OFAC is the U.S. Government's primary administrator and enforcer of
economic and trade sanctions based on U.S. foreign policy and
national
security goals against terrorists, weapons proliferators,
narco-traffickers, and rogue regimes.
The New York State Banking Department is the regulator for all
state-chartered banking institutions, virtually all of the United
States offices of international banking institutions, all of the
State's mortgage brokers, mortgage bankers, check cashers, money
transmitters and budget planners. The aggregate assets of the
depository institutions supervised by the Banking Department are
more
than $1.5 trillion. NYSBD press releases and other information are
available at www.banking.state.ny.us.
The MOU document is available on OFAC's Web site at
http://www.treas.gov/offices/enforcement/ofac/civpen/OFACNYMOU.pdf,
and on the New York State Banking Department's Web site at:
http://www.banking.state.ny.us/pr061204.pdf.
U.S. INTERNATIONAL RESERVE POSITION
http://www.treas.gov/press/releases/20061241425214517.htm
FIFTH ROUND OF NEW MARKETS TAX CREDIT COMPETITION OPENS FOR $3.9
BILLION IN INVESTMENT
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp186.htm
Washington, DC- The U.S. Department of the Treasury announced today
the opening of the fifth round of competition for tax credits on
$3.9
billion in investments under the New Markets Tax Credit (NMTC)
Program. The NMTC Program attracts private-sector capital investment
into the nation's urban and rural low-income areas to help finance
community development projects, stimulate economic growth and create
jobs.
Under this round of the NMTC Program $3.5 billion in allocations
authority is available under the general round and an additional
$400
million specifically for recovery and redevelopment in the Hurricane
Katrina Gulf Opportunity Zone.
The NMTC Program, established by Congress in December of 2000,
permits
individual and corporate taxpayers to receive a credit against
federal
income taxes for making qualified equity investments in investment
vehicles known as Community Development Entities (CDEs). The credit
provided to the investor totals 39 percent of the cost of the
investment and is claimed over a seven-year period. Substantially
all
of the taxpayer's investment must in turn be used by the CDE to make
qualified investments in low-income communities. Successful
applicants
are selected only after a competitive application and rigorous
review
process that is administered by Treasury's Community Development
Financial Institutions (CDFI) Fund.
"I continue to be very impressed with the performance of the
organizations awarded to date using the NMTC Program", said CDFI
Fund
Director Arthur A. Garcia. "Not just by the pace with which they are
raising capital, but also because they are going beyond the
requirements of the program by making investments in the most
distressed of low-income communities and doing so with better market
rates and terms." To date, 149 of the allocatees from the first
three
rounds have already raised $5.1 billion in equity from investors –
credits on $8 billion of expected investments was awarded over these
three rounds. Through the first four rounds of the NMTC Program, the
CDFI Fund has made 233 awards totaling $12.1 billion in tax credit
allocation authority.
Guidance and application materials on the fifth round of the NMTC
Program are available on the CDFI Fund's website at
www.cdfifund.gov.
The allocation application deadline is February 28, 2007.
The CDFI Fund will be conducting several Application Workshops on
the
NMTC Program around the country in December. The purpose of these
workshops is to describe how the NMTC Program works, including how
to
apply for certification as a CDE and how to apply for an allocation
of
NMTCs in the upcoming round. To learn more about this training or to
register, please visit the CDFI Fund's website at www.cdfifund.gov.
TREASURY NAMES MATTHEW ABBOTT DEPUTY ASSISTANT SECRETARY
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp182.htm
Washington, DC - The Treasury Department announced today the
appointment of Matthew T. Abbott as Deputy Assistant Secretary for
Federal Finance. The Deputy Assistant Secretary reports to the
Assistant Secretary for Financial Markets and oversees Treasury
financing, debt management, and regulatory issues in the capital and
government securities markets.
Abbott served as the Senior Adviser to the Under Secretary for
Domestic Finance from 2005-06, providing counsel on key policy
matters. Prior to that position he was Senior Adviser to the
Assistant
Secretary for Financial Markets. Abbott worked in the fixed income
division of Credit Suisse First Boston from 1999 to 2004.
A native of Boston, Massachusetts, Abbott graduated from the College
of the Holy Cross in 1993 with a B.A. in Economics and Accounting.
He
earned his M.B.A. from Northwestern University's Kellogg School of
Management in 1999. Before entering graduate school, he served in
the
10th Special Forces Group (Airborne) and was honorably discharged as
a
Captain in the United States Army.
US TREASURER TO VISIT TEXAS TO REACH OUT TO UNBANKED BORDER
COMMUNITIES MORE THAN TWICE AS LIKELY TO LACK MAINSTREAM FINANCIAL SERVICES
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/hp183.htm
U.S. Treasurer Anna Escobedo Cabral and Treasury Deputy Assistant
Secretary for Financial Education Dan Iannicola, Jr. will visit
Edinburg, TX on Monday and Tuesday, December 4-5, to participate in
a
regional conference to reach the unbanked. Treasury will host
financial literacy events throughout the day to help families take
control of their finances, save for retirement and understand the
importance of establishing credit.
Approximately 10 million or more unbanked households in America do
not
have accounts at mainstream financial institutions and must pay
extraordinarily high fees for basic financial services. An
estimated
23 percent of families living in rural U.S.-Mexico border
communities
are unbanked, more than twice the national average.
Members of the press should contact Brittni Aldridge at 202-622-2591
to attend any events.
Schedule of Press Events for Monday, Dec. 4:
8:00 a.m. CST
Treasury Deputy Assistant Secretary Dan Iannicola Jr.
Financial Education Lesson with Freddy Gonzalez Elementary Students
Freddy Gonzalez Elementary School
2401 South Sugar Road
Edinburg, TX
9:00 a.m. CST
U.S. Treasurer Anna Escobedo Cabral
Media Availability
University of Texas Pan-American
Administrative and Academic Support Annex
2412 South Highway 281
Edinburg, TX
9:30 a.m. - 4:30 p.m. CST
U.S. Treasurer Anna Escobedo Cabral
Treasury Deputy Assistant Secretary Dan Iannicola Jr.
National Credit Union Administration Chairman JoAnn Johnson
Financial Literacy and Education Commission's
Southwest Regional Conference on Reaching Unbanked People
University of Texas Pan-American
Administrative and Academic Support Annex
2412 South Highway 281
Edinburg, TX
5:30 p.m. CST
Treasury Deputy Assistant Secretary Dan Iannicola Jr.
Office of Congressman Hinojosa's Community Event on Personal
Financial
Education
Administrative and Academic Support Annex
2412 South Highway 281
Edinburg, TX
Schedule of Press Events for Tuesday, Dec. 5:
9:00 a.m. CST
Luz Figuereo, Treasury Office of Financial Education
Financial education lessons with La Villa high school students
La Villa High School
200 West Highway 107
La Villa, Texas
