Stuart Levey: No Substitute for Information Sharing

ACAMS Today had the opportunity to speak with Stuart Levey at the 16th Annual International Anti-Money Laundering Conference, in Hollywood, Florida where he received the AML/CTF Leadership in Government Award on March 21, 2011.

Stuart Levey is senior fellow for national security and financial integrity at the Council on Foreign Relations (CFR). Previously, Mr. Levey was the first undersecretary for terrorism and financial intelligence at the U.S. Department of Treasury, a post he held from July 2004 through February 2011. As undersecretary, Mr. Levey was responsible for starting up a new office to lead the Treasury Department's revitalized post-9/11 national security mission. That included establishing an intelligence analysis office within Treasury, the first of its kind in the world. For more than six years at Treasury, he guided the U.S. government's development and execution of financial strategies to counter threats to U.S. national security and to protect the integrity of the international financial system. He also led efforts to disrupt and dismantle the financial networks supporting terrorist organizations, oversaw the creation and implementation of financial measures against proliferators of weapons of mass destruction; and played a central role in both the Bush and Obama administrations' strategies to impose financial pressure on North Korea, Iran, and other rogue regimes. Prior to his tenure at Treasury, Mr. Levey served at the Department of Justice from 2001 through 2004 in the deputy attorney general's office. Before that, he was an attorney in private practice specializing in litigation and white collar criminal defense and clerked for the Honorable Laurence H. Silberman on the United States Court of Appeals for the DC Circuit. Mr. Levey is a graduate of Harvard College and Harvard Law School.

ACAMS Today: How has the awareness of sanctions changed since you took office in 2004?

Stuart Levey: Global awareness of sanctions has never been higher than it is right now. What is remarkable is not just the awareness of sanctions among U.S. institutions, but also what is significant is the awareness of U.S. sanctions by Financial Institutions (FIs) in other countries. It is striking to see how FIs use sanctions programs implemented by the U.S. as a way to manage their own risk, particularly when we are identifying entities and individuals that are engaged in illicit conduct. FIs, even though they may not have a legal obligation to implement U.S. sanctions, are using those lists to protect themselves against risks that they would otherwise encounter.

AT: What are your thoughts on the importance of AML/CTF/Financial Crime/Sanctions to the government?

SL: The use of financial measures has become an important part of a number of national security strategies implemented by the U.S. government. On issues ranging from counter terrorism to counter proliferation, to confronting the threats posed by rogue regimes such as Iran, North Korea and Libya, financial measures have become a critical piece of our government's overall strategy. They are not enough alone, but they are playing an ever more important role in those strategies.

AT: You said that the financial measures are not enough alone. Can you expand on that comment? What else is necessary to make these strategies successful?

SL: It is not so much what is more necessary for the financial measures to succeed; it is that financial measures alone are not a national security strategy for any of those issues. We need the broad participation of other agencies and other elements of national policy ranging from diplomacy, intelligence and, in the case of Libya, a military response. The use of financial measures is an important piece of it.

AT: What is the key to successful future joint efforts between the public and private sectors in defending the nation against terrorism or implementing sanctions?

SL: There really is no substitute for open and candid conversation and information sharing between the government and the private sector and vice versa. There are sometimes strains in the partnership, but, in the end, it is a partnership. There is a shared goal to protect the integrity of the individual institution which, in turn, protects the integrity of the financial system, which, in turn, protects the national security of the country. The better the dialogue between the government and the private sector, the better the partnership will work.

AT: What were the major concerns that banks brought up to you when you met with them
to amplify the U.S. government financial strategies and what recommendations did you give to the banks?

SL: The interactions that I had with the banks tended to be positive. Of course banks wanted to make sure they were not leaving their customers without financial services. But the overall tenor of the interactions that I had with the private sector was a positive one. Especially, when we came to share information about risks they were facing, they tended to view that as a welcome interaction, one they wanted to hear about because, in the end, they are in the business of assessing and mitigating those risks.

AT: In your career you dealt with AML/CTF/Sanctions/Financial Crimes. How would you prioritize the areas in which you worked?

SL: It is all about the integrity of the financial system. Any illicit activity threatens that integrity. Depending on each institution's place in the financial system, they have their own role to play in promoting the overall integrity of the system.

AT: Are there any words of wisdom that you have received during your career that you would like to impart or any advice you would like to share with AML professionals?

SL: What people are doing who are working in compliance may feel like routine, day-to-day business, but overall, it does have a real impact and it is important to the national security of our country. People should at least occasionally step back and remember the importance of what compliance professionals are doing.

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