Category Archives: Treasury

Pay Your Bills Years in Advance, Negative Interest Rate

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Primer: 

The Federal Reserve System‍—‌also known as the Federal Reserve or simply as the Fed‍—‌is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded, and its structure has evolved. Events such as the Great Depression in the 1930s were major factors leading to changes in the system.[10]

The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate. Its duties have expanded over the years, and as of 2009 also include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed conducts research into the economy and releases numerous publications, such as the Beige Book.

Negative 0.5% Interest Rate: Why People Are Paying to Save

When you lend somebody money, they usually have to pay you for the privilege.

NYT’s: That has been a bedrock assumption across centuries of financial history. But it is an assumption that is increasingly being tossed aside by some of the world’s central banks and bond markets.

A decade ago, negative interest rates were a theoretical curiosity that economists would discuss almost as a parlor game. Two years ago, it began showing up as an unconventional step that a few small countries considered. Now, it is the stated policy of some of the most powerful global central banks, including the European Central Bank and the Bank of Japan.

On Thursday, Sweden’s central bank lowered its bank lending rate to a negative 0.5 percent from a negative 0.35 percent, and said it could cut further still; European bank stocks were hammered partly because investors feared what negative rates could do to bank profits. The Federal Reserve chairwoman, Janet Yellen, acknowledged in congressional testimony Wednesday and Thursday that the American central bank was taking a look at the strategy, though she emphasized no such move was envisioned.

But as negative rates — in which depositors pay to hold money in bank accounts — become a more common fixture, there are many unknowns about what these policies mean for finance, for the economy and even for the definition of money.

These are some of the key questions, and, where we have them, the answers.

So how do negative interest rates work?

It depends. In the cases of interest rate targets set by central banks like the E.C.B. and Swedish Riksbank, they set a negative target rate for banks, and banks in turn pass it along to their customers. The E.C.B., for example, currently has a negative 0.3 percent rate, meaning that when banks deposit money at the central bank overnight, they pay for the privilege.

Banks have different ways of passing the negative rates on to depositors, often framed as fees for keeping money in an account, which is basically negative interest rates by another name.

Bond markets reflect these negative rates, too, including for longer-term government debt. For example, if you bought a two-year Swiss government bond on Thursday, you would have needed to pay a price that resulted in a yield of negative 1.12 percent. Even 10-year Swiss bonds have a negative rate, a sign markets expect below-zero rates to persist in Switzerland for many years to come.

Generally companies that borrow money are viewed as riskier than governments, so they have to pay higher interest rates. Therefore negative-rate corporate debt is still rare. But it has happened, including with corporate bonds issued by the Swiss food giant Nestle.

But don’t people just withdraw cash rather than pay to deposit it at their bank or buy a government bond that will give them back less than they paid?

You’d think, right? This was exactly why economists had long thought that negative interest rates were impossible. It helps explain why central banks first turned to other tools, including quantitative easing, when they saw a need to ease monetary policy despite interest rates that were already near zero.

But it looks as if the convenience of keeping money in a bank account is worth a small negative interest rate or fees for most consumers and businesses, at least at the only slightly negative rates currently in place. Storing and providing security for cash may be more expensive than a small bank charge.

When initial experiments in Switzerland and Sweden didn’t result in mass withdrawals from the banking system, larger central banks in need of easier money moved gingerly in the same direction. They’ll stop when either their economies start to grow or they see more concrete evidence that negative rates are doing more harm than good.

How is this supposed to help the economy?

Pretty much the same way it always is supposed to help the economy when a central bank cuts rates. Lower rates encourage business investment and consumer spending; increase the value of the stock market and other risky assets; lower the value of a country’s currency, making exporters more competitive; and create expectations of higher future inflation, which can induce people to spend now.

We have decades of experience with central banks trying to manage the economy by, for example, cutting bank rates to 2 percent from 3 percent when there is an economic downturn. The shift to negative rate policies is, hypothetically at least, the same, but with a starting point of rates already around zero.

So does it work?

It’s hard to say with any certainty yet. At a minimum, it seems to have an effect of lowering the value of a currency, which makes export industries very happy. It’s less clear whether it can help create sustained economic growth, particularly when the hard-to-calculate downsides are factored in.

What are those downsides?

The global financial system is built on an assumption of above-zero interest rates. Going below zero could cause damage to the very architecture by which money and credit zoom through the economy, and in turn inhibit growth.

Banks could cease to be viable businesses, eliminating a key way that money is channeled from savers to productive investments. Money market mutual funds, widely used in the United States, could well cease to exist. Insurance companies and pension funds could face their own major strains.

In a speech last year, Hervé Hannoun, then the deputy general manager of the Bank for International Settlements, even argued that this could “over time encourage the use of alternative virtual currencies, undermining the foundations of the financial system as we know it today.”

Is the Federal Reserve going to do this in the United States?

Janet Yellen doesn’t think so. But in two days of congressional testimony this week, she also didn’t rule it out.

For one thing, the United States economy, and particularly its labor market, looks to be in stronger shape than that of many others around the world. So the Fed expects to be in interest-rate raising mode this year (though exactly how fast is very much in question). But even if the economy does take a turn for the worse, there’s no certainty that negative rates are the path the Fed would take.

There is a question of whether that would even be legal. It’s not clear if the language of the Federal Reserve Act allows negative bank rates (J.P. Koning, a financial commentator, runs through the legal issues here). Ms. Yellen said in testimony this week that the legality of negative rates “remains a question that we still would need to investigate more thoroughly.”

She also said that “it isn’t just a question of legal authority.”

“It’s also a question of could the plumbing of the payment system in the United States handle it?” she said. “Is our institutional structure of our money markets compatible with it? We’ve not determined that.”

Financial markets do not now price in meaningful odds of negative rates in the United States. Want one modest clue that negative rates can’t be ruled out, though? In its annual stress test of major banks, the Fed asked the firms to figure out what would happen to their finances in a “severely adverse” scenario that included a sharp rise in unemployment and a rate of negative 0.5 percent rate on short-term Treasury bills — in other words, what you’d expect to see if there were a recession and the Fed cut rates well below zero.

Ms. Yellen noted that the rates on Treasury bills could go negative even in the absence of a policy shift by the Fed, as has happened a few times in the past.

So what are some of the weird things that could happen in a world in which negative rates become routine?

The policies in Europe and Japan are still relatively new and involve rates only slightly below zero. But if the policies become long-lasting, or negative rates go much lower, there are a lot of mind-bending ways it could affect routine transactions.

For example, would people start prepaying years’ worth of cable bills to avoid having money tied up in a money-losing bank account? How about property taxes? Would companies and governments put in place new policies prohibiting people from paying their bills too early?

Or consider this: Many commercial transactions now take place with some short-term credit attached — for example, a company that gets a 60-day grace period to pay bills from its suppliers. Would that flip, and suddenly suppliers would prohibit upfront payment and insist that their customers wait 60 days to pay?

Might new businesses sprout up that allow people to securely store thousands of dollars in bundles of $100 bills, or could people buy physical objects as stores of value that the banks can’t charge a negative interest rate on?

“Negative interest rates in Japan is blowing my mind,” said Jose Canseco, the provocative retired baseball player not normally known for his economic musings, on Twitter. And the truth is, he’s not the only one.

Facts: Mexico to U.S. Immigration

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Unaccompanied Alien Children Charged in Execution-Style Murder, Media Calls Them “Baby-Faced Boys”

It appears that the recent execution-style murder of a Massachusetts man was committed by two Central American teens that came to the U.S. as Unaccompanied Alien Children (UAC) under President Obama’s open border free-for-all. Tens of thousands of illegal immigrant minors—mostly from El Salvador, Guatemala and Honduras—have entered the country through the Mexican border since the influx began in the summer of 2014 and the administration has relocated them nationwide.

News reports indicate that the 17-year-olds charged in the gruesome Massachusetts killing entered the U.S. recently as UAC’s and both have ties to MS-13, according to authorities cited by various outlets. They lived in Everett and one of the teens, Cristian Nunez-Flores, moved to Massachusetts from his native El Salvador a year and a half ago which is when the influx of Central American minors began. His parents remain in El Salvador, according to a local news article. The other gangbanger’s name is Jose Vasquez Ardon and he too is a recent arrival from Central America. Prosecutors say the teens, described in a local news article as “baby-faced boys,”shot a 19-year-old in the head. Both are being held without bail for obvious reasons. A must read summary here.

*** Meanwhile***

5 facts about Mexico and immigration to the U.S.

PewResearch: Pope Francis is expected to make immigration a major theme of his visit to Mexico. By traveling northward across Mexico, he intends to symbolically retrace the journey of Mexican and Central American migrants traveling to the United States. After the pope leaves Mexico City, his route will begin in the southern state of Chiapas, which shares a long border with Guatemala, and end in Ciudad Juárez, located across the U.S.-Mexico border from El Paso, Texas, a longtime entry point to the U.S.

U.S. immigration from Latin America has shifted over the past two decades. From 1965 to 2015, more than 16 million Mexicans migrated to the U.S. in one of the largest mass migrations in modern history. But over the past decade, Mexican migration to the U.S. has slowed dramatically. Today, Mexico increasingly serves as a land bridge for Central American immigrants traveling to the U.S.

Here are five facts about Mexico and trends in immigration to the U.S.

1Mexico increases deportations of Central AmericansMexico is stopping more unauthorized Central American immigrants at its southern border. The Mexican government said in 2014 that it would increase enforcement at its southern border in response to an increased flow of Central Americans traveling through Mexico to reach the U.S. In 2015, the government there carried out about 150,000 deportations of unauthorized immigrants from El Salvador, Guatemala and Honduras, a 44% jump over the previous year. These three Central American countries alone accounted for nearly all (97%) of Mexico’s deportations in 2015.

2Despite increased enforcement by Mexico, many unauthorized Central Americans are still reaching the U.S. via Mexico. At the U.S.-Mexico border, the number of families and unaccompanied children apprehended by U.S. Customs and Border Protection officials is again rising, though it’s too early to tell how 2016 will compare with prior years. From Oct. 1, 2015, to Jan. 31, 2016, 24,616 families and 20,455 unaccompanied children – the vast majority of them from Central America – were apprehended at the southwestern U.S. border, double the total from the same time period the year before. Apprehensions of unaccompanied children rose to record levels in fiscal 2014, then decreased by 42% in fiscal 2015.

3More Cubans are also traveling through Mexico to reach the U.S. The number of Cubans migrating through Mexico to reach the U.S. spiked dramatically last year after President Barack Obama said the U.S. would renew ties with the island nation. In fiscal 2015, 43,159 Cubans entered the U.S. via ports of entry, a 78% increase over the previous year. Two-thirds of these Cubans arrived through the U.S. Border Patrol’s Laredo Sector in Texas. (Cubans who pass an inspection can enter the U.S. legally under the Cuban Adjustment Act of 1966.)

4Fewer Mexicans are migrating to the U.S. today than in the past. In fact, more Mexicans left than came to the U.S since the end of the Great Recession. Between 2009 and 2014, 870,000 Mexican nationals left Mexico to come to the U.S., down from the 2.9 million who left Mexico for the U.S. between 1995 and 2000. Of those moving back to Mexico, many cite family as the reason for their return. About 1 million Mexican immigrants and their U.S.-born children moved from the U.S. to Mexico between 2009 and 2014, and 61% said they had done so to reunite with family or to start a family, according to the 2014 Mexican National Survey of Demographic Dynamics.

5More Mexicans now say life is about the same in the U.S. and Mexico. In 2015, 33% of Mexican adults said life in the U.S. is neither better nor worse than life in Mexico, up from 23% who said this in 2007. Still, about half of Mexican adults believe life is better in the U.S. and 35% of Mexicans said they would move to the U.S. if they had the opportunity and means to do so, similar shares as in 2009.

It was not a Hardware Issue, it was a Cyber Intrusion, IRS

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IRS Confirms It Was a Victim of an Automated Attack

The attack, which occurred in January, targeted the electronic filing PIN application form on the IRS.gov Website. Experts said there are lessons to be learned.

eWeek: The U.S. Internal Revenue Service (IRS) is gearing up for another busy tax season, and it appears that hackers are getting ready, too. On Feb. 9, the IRS confirmed that it was the victim of an automated attack in January that targeted the electronic filing PIN application form on the IRS.gov Website.According to the IRS, attackers made use of personal information, including Social Security numbers, that was stolen from other non-IRS Websites. The attackers then used that information in an attempt to generate fraudulent E-File PIN numbers on IRS.gov. With a PIN number, an attacker could have potentially been able to file a tax return or gain access to other taxpayer information.The IRS investigation has found that 464,000 unique Social Security numbers (SSNs) were used in the attack, with 101,000 being successfully able to access the E-File PIN. The IRS is emphasizing that it has halted the attack and is contacting those who are affected.”No personal taxpayer data was compromised or disclosed by IRS systems,” the agency stated. “The IRS also is taking immediate steps to notify affected taxpayers by mail that their personal information was used in an attempt to access the IRS application.”

In May 2015, the IRS reported that its Get Transcript service was attacked. Get Transcript enables users to get information about their tax account transactions. As is the case with the new attack against the E-File PIN, the Get Transcript service attack involved user information that was stolen from third-party sites. The success rate for the Get Transcript attackers, however, was higher than it was for the E-File PIN attackers, where 100,000 out of 200,000 hack attempts were successful.

Security experts contacted by eWEEK are not surprised that the IRS is once again reporting an attack against its systems. The fact that the IRS.gov site was attacked with SSNs stolen from other third-party sites is, however, somewhat ironic.”One of the most successful ways hackers steal citizens’ Social Security numbers is through fraudulent phishing emails or phone calls that appear to be from the IRS,” Darren Guccione, CEO and co-founder of Keeper Security, told eWEEK.

Hackers know the public is terrified of being identity-theft victims and exploit this fear well, often by telling someone they’ve been a victim already and asking for their Social Security number, Guccione noted.Lance James, chief scientist at Flashpoint, commented that one of the big concerns he sees with the latest IRS attack is the continued reliance on Social Security numbers. “We need to rethink what a Social Security number means these days when it comes to accessing data,” James told eWEEK. “It should not be the administrator password for a person’s life.”Andy Hayter, security evangelist at G DATA Software, also commented on the risks associated with SSN disclosure. Every bit of an individual’s personally identifiable information that is collected via a breach is one more piece of information that can, and someday will, be used against a person, he said.
“As long as information such as Social Security numbers is used as identification, we will have bad actors trying to collect as much information about individuals to do harm, either through theft or worse,” Hayter told eWEEK.Inga Goddijn, executive vice president at Risk Based Security, noted that taxpayers should be concerned that questionable security practices at organizations completely unrelated to the IRS have the potential of affecting their tax returns.

Though the IRS has stated that no personal taxpayer data was compromised or disclosed in the new attack, JP Bourget, CEO of Syncurity, noted that there is still a real risk.”While maybe the IRS can in the end prevent any bad outcomes for taxpayers, I can imagine a few scenarios where a bad guy attempts to file a tax return for a refund that then holds up a valid refund to someone who is owed a refund, and even depending on that refund,” Bourget told eWEEK. “There’s also the angle of now your account is flagged and the uncertainty of how that affects a taxpayer over time and what hidden costs may arise from that.”One potentially positive outcome that could result from the IRS attack is that lessons learned could help prevent the next attack. Goddijn said that it would be helpful if the IRS can share more detail as to how the agency detected the attack and ideas for preventing these types of enumeration attacks in the future. She added that the U.S. government has been pushing for more threat intelligence sharing and improved security practices for all organizations.”Why not take this opportunity to lead the charge and share more about the attack with the security community,” Goddijn said. “That may help stop the next, similar assault on a high-value target.”

In 2015:

USAToday: Criminals hacked into an Internal Revenue Service website and gained access to approximately 100,000 tax accounts, the agency said Tuesday. Another 100,000 attempts were made but were not successful.

The attack appears to have first begun in February, the agency said.

The hackers got in by taking information about taxpayers they’d acquired from other sources and using it to correctly answer several personal identity verification questions in the IRS’ “Get Transcript” application, the IRS said in a statement.

This allowed them to get information about tax accounts through the application. The information stolen included Social Security information, date of birth and street address.

The Get Transcript application allows users to view their tax account transactions, line-by-line tax return information or wage and income reported to the IRS for a specific tax year. It was used to securely retrieve approximately 23 million taxpayer transcripts last year, the IRS said.

The information the hackers used to get in was probably previously stolen by other hackers who then sold it on the open market, said Rob Roy, chief technology officer of HP Enterprise Security Products.

The hackers who bought it “appear to have hired an army of people to submit over 200,000 queries into the IRS site over a period of four months. Not exactly a quick and easy operation,” he said.

“The matter is under review by the Treasury Inspector General for Tax Administration as well as the IRS’ Criminal Investigation unit, and the ‘Get Transcript’ application has been shut down temporarily,” the IRS said.

The agency will provide free credit monitoring services for the approximately 100,000 taxpayers whose accounts were accessed.

The theft was discovered late last week when IRS staff noticed unusual activity on the application. Further investigation showed that attempts were made beginning in February.

The breach does not involve the main IRS computer system that handles tax filing submissions. “That system remains secure,” the IRS said.

“The IRS historically has been very security, it has to be by virtue of the data it collects. But it just goes to show that even the most secure system can be attacked,” said Larry Ponemon of the Ponemon Institute, a data security research group.

Russians Working at Islamic State Gas Plant

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Why Are Russian Engineers Working at an Islamic State-Controlled Gas Plant in Syria?
Moscow says it’s at war with the jihadist group — but both sides aren’t opposed to cutting economic deals amid the bloodshed.


FPM: Officially, Syrian President Bashar al-Assad’s government and his Russian allies are at war against the Islamic State. But a gas facility in northern Syria under the control of the jihadi group is evidence that business links between the Syrian regime and the Islamic State persist. According to Turkish officials and Syrian rebels, it is also the site of cooperation between the Islamic State and a Russian energy company with ties to President Vladimir Putin.

The Tuweinan gas facility, which is located roughly 60 miles southwest of the Islamic State’s de facto capital of Raqqa, is the largest such facility in Syria. It was built by Russian construction company Stroytransgaz, which is owned by billionaire Gennady Timchenko, a close associate of Putin. The company’s link to the Kremlin is well-documented: The U.S. Treasury Department previously sanctioned Stroytransgaz, along with the other Timchenko-owned companies, for engaging in activities “directly linked to Putin” amidst the confrontation over Ukraine.

The story of the controversial plant involves the Assad regime, Russian-Syrian businessmen, the Islamic State, and moderate Syrian groups, which together tried to activate the facility for the financial and logistical benefits it could provide for them.

The Syrian government originally awarded the contract to construct the Tuweinan facility to Stroytransgaz in 2007. The construction utilized a Syrian subcontractor, Hesco, which was owned by Russian-Syrian dual national George Haswani. Last November, the Treasury Department sanctioned Haswani for allegedly brokering oil sales between the Islamic State and the Assad regime, charges he denies.

The partnership between Hesco and Stroytransgaz goes far beyond this one deal. The companies have worked in joint projects in Sudan, Algeria, Iraq, and the UAE since 2000, according to Haswani’s son-in-law, Yusef Arbash, who runs Hesco’s Moscow office.

Construction continued slowly until a coalition of Syrian rebel groups seized the facility in a joint operation with the al Qaeda-affiliated al-Nusra Front in January 2013. Abu Khalid, a member of the Qwais al-Qarani brigade, which was a part of the rebel coalition, said that when they entered the area, Russian engineers and advisors had already fled, leaving Syrian employees behind. “We decided to protect this plant; we thought it is belonging to Syrian people since it was owned by the Syrian state,” he said.
The Islamic State has been in control of the facility since early 2014.

A senior Turkish official said that after its seizure, Stroytransgaz, through its subcontractor Hesco, continued the facility’s construction with the Islamic State’s permission.

 

Syrian state-run newspaper Tishreen published a report appearing to corroborate this claim. In January 2014, after the facility was captured by the Islamic State, the paper cited Syrian government sources, saying that Stroytransgaz had completed 80 percent of the project and expected to hand over the facility to the regime during the second half of the year. The article didn’t mention that the facility was under the control of the Islamic State.

According to David Butter, an associate fellow at London-based Chatham House, who has seen a letter written by George Haswani explaining the details of the project, the facility’s first phase of production started towards the end of 2014, and it became fully operational during 2015. “Some of the natural gas goes to the Aleppo power station, which operates under the Islamic State’s protection, and the remainder is pumped to Homs and Damascus,” he said.

Abu Khalid said that Russian engineers still work at the facility, and Haswani brokered a deal with the Islamic State and the regime for mutually beneficial gas production from the facility. “IS allowed the Russian company to send engineers and crew in return for a big share in the gas and extortion money,” he said, using an acronym for the Islamic State and attributing the information to Syrian rebel commanders fighting the Islamic State in the area. “Employees of the Russian company were changing their shifts via a military base in Hama governorate.”

Haswani has rejected the Treasury Department’s allegations that he worked as a middle man in oil deals between the Islamic State and the Assad regime. But he has never denied Hesco’s continued work on the gas facility after the Islamic State captured it.

The details of the Tuweinan deal brokered between the Islamic State and Hesco was first reported by the Syrian media collective Raqqa Is Being Slaughtered Silently in October 2014. The group claimed that Hesco signed an agreement with the Islamic State promising to leave a larger chunk of the profit to them. In October 2015, the Financial Times reported that the gas produced in the plant was sent to the Islamic State-held thermal power plant in Aleppo. The deal provides 50 megawatts of electricity for the regime, while the Islamic State receives 70 megawatts of electricity and 300 barrels of condensate. The engineers who worked at the plant told the Financial Times that Hesco also sends the Islamic State roughly $50,000 every month to protect its valuable equipment.

While Syria remains politically fractured, the deal at the Tuweinan gas facility shows that the rival parties are still cutting economic agreements amid the war. Aron Lund, editor of the Carnegie Endowment for International Peace’s website Syria in Crisis, said that similar gas and oil arrangements exist all over Syria. “You have them between the IS and the regime, but also between IS and rival Sunni Arab rebels, between the Kurds and the regime, Kurds and rebels, the rebels and the regime, and so on,” he said. “You have lots of informal trade connections that emerge among armed groups, smugglers, or private business to fill the gaps between the various sides as the country falls apart, while national institutions, infrastructure, and much of the economy will necessarily remain shared.”

Finally Listing ISIS Leaders Terrorists?

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Treasury Sanctions Key ISIL Leaders and Facilitators Including a Senior Oil Official
2/11/2016

WASHINGTON – The U.S. Department of the Treasury today announced the designations of senior ISIL oil official Faysal al-Zahrani, foreign fighter facilitator Husayn Juaythini, and senior ISIL official Turki al-Binali pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.  These designations support President Obama’s strategy to degrade and destroy ISIL.  These designations also further Treasury’s efforts to attack ISIL’s finances and disrupt its ability to profit from illicit oil sales within its territory in Iraq and Syria by inhibiting these individuals from accessing the international financial system.  They also support work by the broader counter-ISIL Coalition, including Operation Tidal Wave II, which consists of deliberate targeting and precision airstrikes in Iraq and Syria to disrupt ISIL’s control of oil-related resources.  As a result of today’s actions, any property or interest in property of the individuals designated by Treasury within U.S. jurisdiction is frozen.  Additionally, transactions by U.S. persons involving the designated individuals are generally prohibited.
 al Binali
“Treasury and our partners worldwide are aggressively targeting ISIL’s ability to earn and make use of its money, and we are making progress on many fronts,” said Adam J. Szubin, Acting Under Secretary for Terrorism and Financial Intelligence.  “Today’s action targets key ISIL leadership figures responsible for oil and gas production, foreign terrorist fighter recruitment and facilitation, and other financial facilitation.”
In a speech on Monday at Chatham House in London, Assistant Secretary for Terrorist Financing Daniel Glaser highlighted the recent progress that the U.S. government has made in weakening ISIL’s ability to generate wealth and disrupt its ability to make use of the money it raises.
The Treasury Department announces this action in advance of the first-ever joint session of the Financial Action Task Force (FATF) and the Global Coalition to Counter ISIL’s Counter ISIL Finance Group (CIFG), which is taking place on February 14 in Paris.  The CIFG is co-chaired by Italy, Saudi Arabia, and the United States and has 37 participating member states and organizations.  The group focuses on enhancing international collaboration to disrupt the financial and economic activities of ISIL.  The FATF is the international standard-setting body for combating money laundering and terrorist financing.  It develops recommendations and promotes effective implementation of key anti-money laundering and countering the financing of terrorism measures that deprive terrorist groups, like ISIL, of access to the international financial system.  The purpose of the FATF-CIFG joint session is to bring together the leading international bodies focused on ISIL financing to more effectively share information and coordinate efforts.  The session will focus on recent ISIL financial activity, ongoing efforts to deny ISIL access to the international financial system, strategies to prevent ISIL from financing its branches or foreign fighters, and recent United Nations Security Council Resolutions that facilitate efforts to disrupt ISIL’s finances.
Faysal Ahmad ‘Ali al-Zahrani
Treasury designated Faysal Ahmad ‘Ali al-Zahrani for acting for or on behalf of ISIL and for providing financial support to ISIL.  In July 2014, al-Zahrani joined ISIL’s natural resources ministry, which oversees ISIL’s trade in oil and gas.  As of May 2015, al-Zahrani was the ISIL oil and gas division official for Al Barakah Governorate, Syria, serving directly under ISIL oil and gas emir for Syria Fathi Awn’ al-Murad la Tunisi, also known as Abu Sayyaf, who was killed by Coalition special forces in a raid in eastern Syria that same month.  Prior to Abu Sayyaf’s death in May 2015, al-Zahrani regularly transferred funds to him.  As of June 2015, al-Zahrani supervised the daily activities of the workforce of an ISIL-managed oil production plant in Rukaybah, al-Hasakah Province, Syria, and by August 2015 was in charge of all ISIL oil and gas activities in al-Hasakah Province, which included supervising oil auctions to local merchants.  Following the May 2015 death of a separate ISIL oil official, who previously oversaw a vehicle-borne improvised explosive device (VBIED) production site on the Rukaybah oil production plant compound, al-Zahrani assumed control and oversight of VBIED production.  As of December 2015, al-Zahrani remained responsible for ISIL oil and gas activities in the areas around Shaddadi, al-Hasakah Province, Syria.
In his role as head of ISIL’s oil and gas division in Al Barakah, Syria, al-Zahrani oversaw the activities of seven ISIL oil and gas officials and, as of January 2015, held control of at least five oil fields.  Based on the profits generated from oil fields in Al Barakah governorate, al-Zahrani sent the ISIL treasury tens of millions of dollars in oil and gas revenues between September 2014 and March 2015.
Husayn Juaythini
Treasury designated Husayn Juaythini for providing support and services to ISIL by facilitating communications and the movement of foreign terrorist fighters and conducting financial activities in support of ISIL.  Juaythini travelled to Syria in September 2014 to pledge allegiance to ISIL and was tasked to return to Gaza and establish a foothold for ISIL there.  Juaythini was the link between ISIL leader and U.S.- and UN-designated Specially Designated Global Terrorist (SDGT) Abu Bakr al-Baghdadi and armed groups in Gaza, and had money that he was using to build an ISIL presence in Gaza.
Juaythini not only maintains ties with ISIL, but as of mid-2014 was deputy head of the extremist group and U.S.-designated SDGT Mujahidin Shura Council (MSC).  In 2013, Juaythini attempted to acquire supplies for the MSC in the environs of Jerusalem to conduct attacks against Israel and help the group overcome financial difficulties.  He also worked with a Libya-based facilitator, who served as the primary money and weapons facilitator for Juaythini’s activities in Gaza.  As of January 2015, Juaythini was instrumental in fostering connections between Gaza- and Libya-based terrorists, and facilitating their travel to Syria.
Turki Mubarak Abdullah Ahmad al-Binali
Treasury also designated Turki al-Binali for acting for or on behalf of ISIL as early as May 2015. Binali is a recruiter for ISIL foreign fighters, and provides literature and fatwas for ISIL training camps and has written several pamphlets to recruit more fighters to ISIL, including the first call for Muslims to pledge allegiance to ISIL leader Abu Bakr al-Baghdadi as caliph.  As of March 2014, Binali led an ISIL support network actively recruiting Gulf nationals to join ISIL in Syria.
Further, in November 2014, Binali was appointed to the post of chief religious advisor for ISIL.  In late June 2015, Binali announced on social media that ISIL’s next attack, following its bombing of a Shia mosque in Kuwait days earlier, would be in Bahrain.
On January 31, 2015, the Bahraini government revoked Binali’s citizenship.
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Counter Terrorism Designation
2/11/2016
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OFFICE OF FOREIGN ASSETS CONTROL

Specially Designated Nationals List Update
The following individuals have been added to OFAC’s SDN List:

AL-BINALI, Turki Mubarak Abdullah Ahmad (a.k.a. AL BINALI, Turki Mubarak Abdullah; a.k.a. AL-BENALI, Turki; a.k.a. AL-BIN’ALI, Turki; a.k.a. AL-BIN’ALI, Turki Mubarak; a.k.a. “ABU DERGHAM”; a.k.a. “AL-ATHARI, Abu Human”; a.k.a. “AL-ATHARI, Abu Human Bakr ibn ‘Abd al-‘Aziz”; a.k.a. “AL-ATHARI, Abu-Bakr”; a.k.a. “AL-BAHRAYNI, Abu Hudhayfa”; a.k.a. “AL-MUDARI, Abu Khuzayma”; a.k.a. “AL-SALAFI, Abu Hazm”; a.k.a. “AL-SULAMI, Abu Sufyan”); DOB 03 Sep 1984; POB Al Muharraq, Bahrain; nationality Bahrain; Passport 2231616 (Bahrain) issued 02 Jan 2013 expires 02 Jan 2023; alt. Passport 1272611 (Bahrain) issued 01 Apr 2003; Identification Number 840901356 (individual) [SDGT] (Linked To: ISLAMIC STATE OF IRAQ AND THE LEVANT).
AL-ZAHRANI, Faysal Ahmad ‘Ali (a.k.a. AL ZAHRANI, Faysal Ahmad Bin Ali; a.k.a. ALZAHRANI, Faisal Ahmed Ali; a.k.a. “AL-JAZRAWI, Abu-Sara”; a.k.a. “AL-SAUDI, Abu Sarah”; a.k.a. “AL-ZAHRANI, Abu-Sarah”; a.k.a. “ZAHRANI, Abu Sara”); DOB 19 Jan 1986; alt. DOB 18 Jan 1986; nationality Saudi Arabia; Passport K142736 (Saudi Arabia) issued 14 Jul 2011; alt. Passport G579315 (Saudi Arabia) (individual) [SDGT] (Linked To: ISLAMIC STATE OF IRAQ AND THE LEVANT).
JUAYTHINI, Husayn (a.k.a. ALJEITHNI, Hussein Mohammed Hussein; a.k.a. AL-JU’AITNI, Abu Mu’ath; a.k.a. AL-JU’AYTHINI, Husayn Muhamad Husayn; a.k.a. AL-JU’AYTHINI, Husayn Muhammad; a.k.a. AL-JU’AYTHINI, Husayn Muhammad Husayn; a.k.a. JU’AYTHINI, Husayn Muhammad Husayn); DOB 03 May 1977; POB Al-Nusayirat refugee camp, Gaza; Passport 0363464 (individual) [SDGT] (Linked To: ISLAMIC STATE OF IRAQ AND THE LEVANT).