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Treasury's War: The Unleashing of a New Era of Financial Warfare
For more than a decade, America has been waging a new kind of war against the financial networks of rogue regimes, proliferators, terrorist groups, and criminal syndicates. Juan Zarate, a chief architect of modern financial warfare and a former senior Treasury and White House official, pulls back the curtain on this shadowy world. In this gripping story, he explains in unprecedented detail how a small, dedicated group of officials redefined the Treasury's role and used its unique powers, relationships, and reputation to apply financial pressure against America's enemies.This group unleashed a new brand of financial power -- one that leveraged the private sector and banks directly to isolate rogues from the international financial system. By harnessing the forces of globalization and the centrality of the American market and dollar, Treasury developed a new way of undermining America's foes. Treasury and its tools soon became, and remain, critical in the most vital geopolitical challenges facing the United States, including terrorism, nuclear proliferation, and the regimes in Iran, North Korea, and Syria.This book is the definitive account, by an unparalleled expert, of how financial warfare has taken pride of place in American foreign policy and how America's competitors and enemies are now learning to use this type of power themselves. This is the unique story of the United States' financial war campaigns and the contours and uses of financial power, and of the warfare to come.
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First published January 1, 2013
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July 3, 2021
“This was a twenty-first-century precision-guided munition.” - then CIA director Michael Hayden
WHAT IS THIS BOOK ABOUT?
- The book explains how a small, dedicated group of officials in the Treasury Department refined Treasury’s role and used its unique powers, relationships, and reputation to apply financial pressure against America’s enemies.
WHAT IS FINANCIAL WARFARE?
- This is warfare defined by the use of financial tools, pressure, and market forces to leverage the banking sector, private-sector interests, and foreign partners in order to isolate rogue actors from the international financial and commercial systems and eliminate their funding sources.
MEGARIAN DECREE
- In 432 B.C., Athens and Sparta were the two strongest city-states in Ancient Greece, each leading its own competing coalition of allied city-states.
- The Athenian politician Pericles proposed that Athens sanction Megara economically. This policy—which became known as the “Megarian Decree”—excluded Megarian merchants from the ports and markets of the Athenian-allied Delian League.
LETTERS OF MARQUE
- In the 1500s, the English and other naval and trading powers innovated the use of privateers—privately owned ships—to act as agents of the state under issued “letters of marque.” These letters authorized the vessels to attack specific nations’ ships in specific geographic zones.
- This brand of outsourced financial warfare on the high seas was not legally abolished until 1856.
FINANCIAL COERCION AFTER WWII
- After World War II, economic sanctions would become a tool not merely for use against enemies, but for persuading allies as well.4 In 1956, Israel, Britain, and France conspired to gain control over Egypt’s Suez Canal, striking against Gamal Abdel Nasser’s revolutionary Egyptian government. Seeking to rein in the three US allies, the Eisenhower administration threatened to withhold US financial assistance and oil supplies, warning Britain that a run on the pound was possible.
- In 1960, the United States imposed a blockade against Cuba…Sanctions on Cuban economic and commercial activity continued in full for three decades, and in the 1990s President Bill Clinton expanded the trade embargo by targeting private assistance to potential future Cuban governments as well as by sanctioning foreign subsidiaries trading with Cuba (although he authorized the provision of humanitarian goods in 2000).
- By the end of the twentieth century, broad sanctions against some countries, such as apartheid-era South Africa, Saddam Hussein’s Iraq, and Muammar el-Qaddafi’s Libya, were applied as a way of expressing international opprobrium and attempting to change a country’s behavior.
LOSS OF FAITH IN SANCTIONS IN THE 1990s
- Yet, by the mid-1990s, there was a growing sense that broad sanctions had become counterproductive. Aloof and repressive regimes seemed perfectly willing to allow their already vulnerable populations to suffer…used the sanctions as propaganda to condemn the international community…also threatened to become a way for entrenched regimes and their cronies to more easily enrich themselves.
- As a result, the international community began to lose faith in the idea that sanctions as traditionally applied could be used effectively. One solution appeared to be to move away from broad sanctions to those that targeted individuals.
POST-9/11 THEMES
- There were three primary themes defining this campaign that shaped the environment and evolution of financial power after September 11: the expansion of the international anti-money-laundering regime; the development of financial tools and intelligence geared specifically to dealing with issues of broad national security; and the growth of strategies based on a new understanding of the centrality of both the international financial system and the private sector to transnational threats and issues pertaining to national security.
PRIVATE INDUSTRY WAS MORE EFFECTIVE
- In Treasury, we realized that private-sector actors—most importantly, the banks—could drive the isolation of rogue entities more effectively than governments—based principally on their own interests and desires to avoid unnecessary business and reputational risk.
GOAL IS TO AMPLIFY FINANCIAL IMPACT
- The old orthodoxy of unilateral versus multilateral sanctions became irrelevant—the strategic question was instead about how to amplify or synchronize the effects of financial pressure with other international actors, including states, international institutions, banks, and other commercial actors.
ECONOMIC PRIMACY IS KEY
- If the US economy loses its predominance, or the dollar sufficiently weakens, our ability to wage financial warfare could wane.
MOST FINANCIAL DEALS ARE DONE IN DOLLARS
- Dollar-denominated transactions of any sort—from oil deals to settlement of commercial contracts—have to pass through dollar-clearing accounts. For most dollar-clearing transactions—including oil deals—the transactions pass through a bank account in New York.
PROTECTION OF THE FINANCIAL SYSTEM IS A BALANCING ACT
- The driving principle would be the same as what had been justifying the isolation of illicit financial activity since 9/11—the protection of the integrity of the international financial system.
- Going forward, the core principle of isolating and exiling actors from the legitimate financial system needs to be balanced with the need to ensure that rogue actors can be captured and affected by the legitimate financial system.
CUTTING OFF ACCESS TO THE FINANCIAL SYSTEM IS DEVASTATING
- What made OFAC so powerful was not so much its ability to freeze assets or transactions as its power to bar designated parties and those associated with them from the US financial system.
- Twenty-five million dollars seemed a small price to pay to bring the North Koreans back to the six-party talks. But the North Koreans knew exactly what they were doing. The amount of money wasn’t the issue—they wanted the frozen assets returned so as to remove the scarlet letter from their reputation. The North Korean connection to the international financial system had been shattered, their ability to do business paralyzed.
HARD TO KNOW WHAT THE IMPACT WILL BE, HARD TO REVERSE
- Unfortunately, what few seemed to grasp was that the United States had not frozen any money—nor did it have any jurisdiction to release it.
- The United States didn’t control the market reaction. It simply prompted it…The false assumption, therefore—prevalent even within the US government—was that the United States could quickly issue an unfreezing order.
DON’T OVER-DO IT EITHER OR YOU CAN CAUSE MORE DAMAGE
- Actions taken too aggressively in the financial system might also send a signal that the United States was becoming a hostile environment in which to invest and nest capital.
- Any perceived misuse of American financial prominence and power could destabilize and destroy the fragile system while making the United States a less attractive environment in which to invest.
UN-DOING THE ACTION CAN DIMINISH ITS UTILITY
- unwinding the BDA action undercut our own financial weapon.
- If the pressure could be lifted simply for diplomatic reasons, it would suggest that the decisions being made about the isolation of North Korean financial activity were simply political decisions.
- We took what were quintessentially multilateral effects of a domestic regulatory action and turned it into a unilateral American problem to solve.
- The fixation on the release of the assets had also shifted the debate away from why the international financial community had clamped down on North Korean accounts to begin with.
GUILT BY ASSOCIATION
- The executive order itself laid out a new principle to attack terrorist financing: that financial supporters of terrorism, the companies or businesses owned or controlled by them, and those “associated” with them were potentially subject to designation.
- Importantly, under the criteria of the executive order, the government did not have to demonstrate that designated individuals and entities actually intended to support terrorism or even knew that their money or activities were being used to support terrorism.
WHAT IS ‘FINANCIAL INTELLIGENCE’?
- Financial intelligence can be defined in many ways. In its broadest sense, financial intelligence is any bit of information—however acquired—that reveals commercial or financial transactions and money flows, asset and capital data, and the financial and commercial relationships and interests of individuals, networks, and organizations.
- What makes financial intelligence so valuable is that it can reveal clear contours of relationships…financial footprints don’t lie. The passing of cash between operatives confirms a connection;
BAD GUYS ADAPT WHEN ACCESS TO THE FINANCIAL NETWORK IS HAMPERED
- Terrorists, not surprisingly, turned out to be much like drug traffickers and organized crime figures, at least in one respect: in response to greater scrutiny from banks and formal financial institutions, they resorted to the most basic forms of money movement, including men and women carrying satchels and briefcases full of cash as they traveled.
- Already, the Iranians have resorted to using the Internet and faxes to send messages to brokers and banks as a means of replacing SWIFT messages.
- bitcoin (BTC) is a digital currency transferred through peer-to-peer networks on the Internet. The software, an early implementation of the idea of “crypto-currency,” uses cryptography rather than central authorities to issue and transfer money.
- Bartering has also become a more active way of circumventing the classic financial systems used in local or international trade.
NEED TO MAKE SURE OTHERS UNDERSTAND, APPRECIATE YOUR WORK
- many members of the government misunderstood our work and the import of the tools we were using.
- We needed to demonstrate our continued relevance on the issues that mattered to us and the rest of the government.
USE FINANCIAL TOOLS IN CONJUNCTION WITH OTHER ASSETS
- In 2006, the campaign would be launched as a dual-track program combining diplomacy and financial pressure.
- Instead, it is critical that the financial pressure campaign be viewed as part of a series of actions and policies
YOU CAN ALSO TARGET INSURANCE, ETC.
- For a ship to take part in legitimate commercial trade, it needed insurance—likely from Lloyds of London or major German maritime insurers. Ships without insurance could not legitimately carry goods, sail, or dock. Importantly, the insurance companies relied on the banking system to transact deals and needed to know the nature of the activity they were insuring…The more aware these companies were of Iran’s true activities, the higher the valuation would be of risk—and the costlier the insurance would become.
- Targeting Iran’s central bank would be the last—and most extreme—step we could take against the banking system.
- One additional weapon we held in reserve was targeting the oil sector.
FINANCIAL TOOLS CAN ALSO BE USED AGAINST YOU
- In the summer of 2008, at the height of the financial crisis, Russian officials approached their Chinese counterparts with an intriguing proposal. The countries could band together to sell their holdings in US housing finance giants Fannie Mae and Freddie Mac.
- With the United States still reeling from the financial crisis already underway, a coordinated Russian-Chinese sale of GSE holdings could force the US government to use its emergency authorities and spend massive sums to keep Fannie Mae and Freddie Mac alive.
- the Chinese refused to go along with the plan. It was a harbinger of the increasing willingness of countries to use financial weapons to strike the United States.
*** *** *** *** ***
FACTOIDS
- Iran’s national budget includes a specific line item for its support of terrorist groups such as Hezbollah and Hamas.
- The Treasury’s Office of Foreign Assets Control (OFAC), responsible for implementing all US sanctions programs,
- it is an expected and standard requirement around the world today for banks and regulated institutions to submit suspicious transaction reports and currency transaction reports above a certain amount ($10,000 in the United States) to their host governments.
- Society for Worldwide Interbank Financial Telecommunication (SWIFT), which operates a financial messaging service for financial transactions communicated between member banks.
- Hawala is a traditional way of exchanging and moving money in Central and South Asia, the Middle East, and Africa. Like Western Union’s wire services, hawala is a system built to move money across borders and around the world…Like all financial systems, at its core the hawala system relies on trust—in this case between the brokers (or hawaladars) and with their customers.
- Originally recruited to join the CIA, Sharma was barred from doing so by a restriction that prevented Peace Corps volunteers from joining the CIA within five years of their service.
- the Vienna Convention for Consular Affairs requires the United States to provide financial services to all embassies.
- In Washington, Pentagon planners had devised strategies for a possible cyber-attack to disrupt the financial infrastructure of the Iraqi state. The purpose would have been to erase the value of Iraqi holdings before the regime had the chance to hide its money. But these cyber-weapons were never used…the Treasury feared that the consequences of disrupting electronic financial records would overwhelm any short-term benefit to capturing or destroying Saddam’s assets. If the United States took any action to undermine trust in the integrity of the financial system, the whole system might collapse.
- The most brazen North Korean illicit financial activity was the counterfeiting of US $100 bills. These were the highest-quality counterfeit US bills in the world. The Secret Service had dubbed them the “supernote.”
- Under international law, counterfeiting the currency of a country qualifies as a proxy attack on its national integrity and sovereignty—and a causus belli to justify self-defense.
- More than two-thirds of the $800 billion of US currency in circulation is held abroad.
HAHA
- By the time American officials arrived, it was clear that someone had tried to break through the massive steel vault door with a grenade launcher. Not only had the attempt failed, but the blowback from the explosion in the relatively small room apparently killed the bank robbers.
- an inebriated member of the North Korean delegation leaned over to us and mumbled, “You . . . you Americans finally have found a way to hurt us.”…When they first heard about the action, they just thought it was another sanction, but four weeks later they realized what had hit them. It really got the North Koreans to sit up and notice that this was a tool they’d never seen before, and frankly, it scared the shit out of them.”
BONUS
- What is Treasury’s Office of Foreign Assets Control (OFAC)?: https://youtu.be/aJSHPTq6m3c
- What is a Specially Designated National (SDN)? (a.k.a. someone on the naughty list): https://youtu.be/1KQJOnTKsrg
- The author speaks about financial intelligence (FININT) and national security at the International Spy Museum: https://youtu.be/0XBC3oxa4Mw
- How does the ‘hawala’ money transfer system work?: https://youtu.be/EO8OkkM8dbs
- Victor Bout “Merchant of Death”: https://youtu.be/v3vt_Cr5BHg
- North Korea makes almost perfect counterfeit $100 bills: https://youtu.be/949rltMc_BA
- Hezbollah and used cars from the US: https://youtu.be/pGFrpdg7RcU
WHAT IS THIS BOOK ABOUT?
- The book explains how a small, dedicated group of officials in the Treasury Department refined Treasury’s role and used its unique powers, relationships, and reputation to apply financial pressure against America’s enemies.
WHAT IS FINANCIAL WARFARE?
- This is warfare defined by the use of financial tools, pressure, and market forces to leverage the banking sector, private-sector interests, and foreign partners in order to isolate rogue actors from the international financial and commercial systems and eliminate their funding sources.
MEGARIAN DECREE
- In 432 B.C., Athens and Sparta were the two strongest city-states in Ancient Greece, each leading its own competing coalition of allied city-states.
- The Athenian politician Pericles proposed that Athens sanction Megara economically. This policy—which became known as the “Megarian Decree”—excluded Megarian merchants from the ports and markets of the Athenian-allied Delian League.
LETTERS OF MARQUE
- In the 1500s, the English and other naval and trading powers innovated the use of privateers—privately owned ships—to act as agents of the state under issued “letters of marque.” These letters authorized the vessels to attack specific nations’ ships in specific geographic zones.
- This brand of outsourced financial warfare on the high seas was not legally abolished until 1856.
FINANCIAL COERCION AFTER WWII
- After World War II, economic sanctions would become a tool not merely for use against enemies, but for persuading allies as well.4 In 1956, Israel, Britain, and France conspired to gain control over Egypt’s Suez Canal, striking against Gamal Abdel Nasser’s revolutionary Egyptian government. Seeking to rein in the three US allies, the Eisenhower administration threatened to withhold US financial assistance and oil supplies, warning Britain that a run on the pound was possible.
- In 1960, the United States imposed a blockade against Cuba…Sanctions on Cuban economic and commercial activity continued in full for three decades, and in the 1990s President Bill Clinton expanded the trade embargo by targeting private assistance to potential future Cuban governments as well as by sanctioning foreign subsidiaries trading with Cuba (although he authorized the provision of humanitarian goods in 2000).
- By the end of the twentieth century, broad sanctions against some countries, such as apartheid-era South Africa, Saddam Hussein’s Iraq, and Muammar el-Qaddafi’s Libya, were applied as a way of expressing international opprobrium and attempting to change a country’s behavior.
LOSS OF FAITH IN SANCTIONS IN THE 1990s
- Yet, by the mid-1990s, there was a growing sense that broad sanctions had become counterproductive. Aloof and repressive regimes seemed perfectly willing to allow their already vulnerable populations to suffer…used the sanctions as propaganda to condemn the international community…also threatened to become a way for entrenched regimes and their cronies to more easily enrich themselves.
- As a result, the international community began to lose faith in the idea that sanctions as traditionally applied could be used effectively. One solution appeared to be to move away from broad sanctions to those that targeted individuals.
POST-9/11 THEMES
- There were three primary themes defining this campaign that shaped the environment and evolution of financial power after September 11: the expansion of the international anti-money-laundering regime; the development of financial tools and intelligence geared specifically to dealing with issues of broad national security; and the growth of strategies based on a new understanding of the centrality of both the international financial system and the private sector to transnational threats and issues pertaining to national security.
PRIVATE INDUSTRY WAS MORE EFFECTIVE
- In Treasury, we realized that private-sector actors—most importantly, the banks—could drive the isolation of rogue entities more effectively than governments—based principally on their own interests and desires to avoid unnecessary business and reputational risk.
GOAL IS TO AMPLIFY FINANCIAL IMPACT
- The old orthodoxy of unilateral versus multilateral sanctions became irrelevant—the strategic question was instead about how to amplify or synchronize the effects of financial pressure with other international actors, including states, international institutions, banks, and other commercial actors.
ECONOMIC PRIMACY IS KEY
- If the US economy loses its predominance, or the dollar sufficiently weakens, our ability to wage financial warfare could wane.
MOST FINANCIAL DEALS ARE DONE IN DOLLARS
- Dollar-denominated transactions of any sort—from oil deals to settlement of commercial contracts—have to pass through dollar-clearing accounts. For most dollar-clearing transactions—including oil deals—the transactions pass through a bank account in New York.
PROTECTION OF THE FINANCIAL SYSTEM IS A BALANCING ACT
- The driving principle would be the same as what had been justifying the isolation of illicit financial activity since 9/11—the protection of the integrity of the international financial system.
- Going forward, the core principle of isolating and exiling actors from the legitimate financial system needs to be balanced with the need to ensure that rogue actors can be captured and affected by the legitimate financial system.
CUTTING OFF ACCESS TO THE FINANCIAL SYSTEM IS DEVASTATING
- What made OFAC so powerful was not so much its ability to freeze assets or transactions as its power to bar designated parties and those associated with them from the US financial system.
- Twenty-five million dollars seemed a small price to pay to bring the North Koreans back to the six-party talks. But the North Koreans knew exactly what they were doing. The amount of money wasn’t the issue—they wanted the frozen assets returned so as to remove the scarlet letter from their reputation. The North Korean connection to the international financial system had been shattered, their ability to do business paralyzed.
HARD TO KNOW WHAT THE IMPACT WILL BE, HARD TO REVERSE
- Unfortunately, what few seemed to grasp was that the United States had not frozen any money—nor did it have any jurisdiction to release it.
- The United States didn’t control the market reaction. It simply prompted it…The false assumption, therefore—prevalent even within the US government—was that the United States could quickly issue an unfreezing order.
DON’T OVER-DO IT EITHER OR YOU CAN CAUSE MORE DAMAGE
- Actions taken too aggressively in the financial system might also send a signal that the United States was becoming a hostile environment in which to invest and nest capital.
- Any perceived misuse of American financial prominence and power could destabilize and destroy the fragile system while making the United States a less attractive environment in which to invest.
UN-DOING THE ACTION CAN DIMINISH ITS UTILITY
- unwinding the BDA action undercut our own financial weapon.
- If the pressure could be lifted simply for diplomatic reasons, it would suggest that the decisions being made about the isolation of North Korean financial activity were simply political decisions.
- We took what were quintessentially multilateral effects of a domestic regulatory action and turned it into a unilateral American problem to solve.
- The fixation on the release of the assets had also shifted the debate away from why the international financial community had clamped down on North Korean accounts to begin with.
GUILT BY ASSOCIATION
- The executive order itself laid out a new principle to attack terrorist financing: that financial supporters of terrorism, the companies or businesses owned or controlled by them, and those “associated” with them were potentially subject to designation.
- Importantly, under the criteria of the executive order, the government did not have to demonstrate that designated individuals and entities actually intended to support terrorism or even knew that their money or activities were being used to support terrorism.
WHAT IS ‘FINANCIAL INTELLIGENCE’?
- Financial intelligence can be defined in many ways. In its broadest sense, financial intelligence is any bit of information—however acquired—that reveals commercial or financial transactions and money flows, asset and capital data, and the financial and commercial relationships and interests of individuals, networks, and organizations.
- What makes financial intelligence so valuable is that it can reveal clear contours of relationships…financial footprints don’t lie. The passing of cash between operatives confirms a connection;
BAD GUYS ADAPT WHEN ACCESS TO THE FINANCIAL NETWORK IS HAMPERED
- Terrorists, not surprisingly, turned out to be much like drug traffickers and organized crime figures, at least in one respect: in response to greater scrutiny from banks and formal financial institutions, they resorted to the most basic forms of money movement, including men and women carrying satchels and briefcases full of cash as they traveled.
- Already, the Iranians have resorted to using the Internet and faxes to send messages to brokers and banks as a means of replacing SWIFT messages.
- bitcoin (BTC) is a digital currency transferred through peer-to-peer networks on the Internet. The software, an early implementation of the idea of “crypto-currency,” uses cryptography rather than central authorities to issue and transfer money.
- Bartering has also become a more active way of circumventing the classic financial systems used in local or international trade.
NEED TO MAKE SURE OTHERS UNDERSTAND, APPRECIATE YOUR WORK
- many members of the government misunderstood our work and the import of the tools we were using.
- We needed to demonstrate our continued relevance on the issues that mattered to us and the rest of the government.
USE FINANCIAL TOOLS IN CONJUNCTION WITH OTHER ASSETS
- In 2006, the campaign would be launched as a dual-track program combining diplomacy and financial pressure.
- Instead, it is critical that the financial pressure campaign be viewed as part of a series of actions and policies
YOU CAN ALSO TARGET INSURANCE, ETC.
- For a ship to take part in legitimate commercial trade, it needed insurance—likely from Lloyds of London or major German maritime insurers. Ships without insurance could not legitimately carry goods, sail, or dock. Importantly, the insurance companies relied on the banking system to transact deals and needed to know the nature of the activity they were insuring…The more aware these companies were of Iran’s true activities, the higher the valuation would be of risk—and the costlier the insurance would become.
- Targeting Iran’s central bank would be the last—and most extreme—step we could take against the banking system.
- One additional weapon we held in reserve was targeting the oil sector.
FINANCIAL TOOLS CAN ALSO BE USED AGAINST YOU
- In the summer of 2008, at the height of the financial crisis, Russian officials approached their Chinese counterparts with an intriguing proposal. The countries could band together to sell their holdings in US housing finance giants Fannie Mae and Freddie Mac.
- With the United States still reeling from the financial crisis already underway, a coordinated Russian-Chinese sale of GSE holdings could force the US government to use its emergency authorities and spend massive sums to keep Fannie Mae and Freddie Mac alive.
- the Chinese refused to go along with the plan. It was a harbinger of the increasing willingness of countries to use financial weapons to strike the United States.
*** *** *** *** ***
FACTOIDS
- Iran’s national budget includes a specific line item for its support of terrorist groups such as Hezbollah and Hamas.
- The Treasury’s Office of Foreign Assets Control (OFAC), responsible for implementing all US sanctions programs,
- it is an expected and standard requirement around the world today for banks and regulated institutions to submit suspicious transaction reports and currency transaction reports above a certain amount ($10,000 in the United States) to their host governments.
- Society for Worldwide Interbank Financial Telecommunication (SWIFT), which operates a financial messaging service for financial transactions communicated between member banks.
- Hawala is a traditional way of exchanging and moving money in Central and South Asia, the Middle East, and Africa. Like Western Union’s wire services, hawala is a system built to move money across borders and around the world…Like all financial systems, at its core the hawala system relies on trust—in this case between the brokers (or hawaladars) and with their customers.
- Originally recruited to join the CIA, Sharma was barred from doing so by a restriction that prevented Peace Corps volunteers from joining the CIA within five years of their service.
- the Vienna Convention for Consular Affairs requires the United States to provide financial services to all embassies.
- In Washington, Pentagon planners had devised strategies for a possible cyber-attack to disrupt the financial infrastructure of the Iraqi state. The purpose would have been to erase the value of Iraqi holdings before the regime had the chance to hide its money. But these cyber-weapons were never used…the Treasury feared that the consequences of disrupting electronic financial records would overwhelm any short-term benefit to capturing or destroying Saddam’s assets. If the United States took any action to undermine trust in the integrity of the financial system, the whole system might collapse.
- The most brazen North Korean illicit financial activity was the counterfeiting of US $100 bills. These were the highest-quality counterfeit US bills in the world. The Secret Service had dubbed them the “supernote.”
- Under international law, counterfeiting the currency of a country qualifies as a proxy attack on its national integrity and sovereignty—and a causus belli to justify self-defense.
- More than two-thirds of the $800 billion of US currency in circulation is held abroad.
HAHA
- By the time American officials arrived, it was clear that someone had tried to break through the massive steel vault door with a grenade launcher. Not only had the attempt failed, but the blowback from the explosion in the relatively small room apparently killed the bank robbers.
- an inebriated member of the North Korean delegation leaned over to us and mumbled, “You . . . you Americans finally have found a way to hurt us.”…When they first heard about the action, they just thought it was another sanction, but four weeks later they realized what had hit them. It really got the North Koreans to sit up and notice that this was a tool they’d never seen before, and frankly, it scared the shit out of them.”
BONUS
- What is Treasury’s Office of Foreign Assets Control (OFAC)?: https://youtu.be/aJSHPTq6m3c
- What is a Specially Designated National (SDN)? (a.k.a. someone on the naughty list): https://youtu.be/1KQJOnTKsrg
- The author speaks about financial intelligence (FININT) and national security at the International Spy Museum: https://youtu.be/0XBC3oxa4Mw
- How does the ‘hawala’ money transfer system work?: https://youtu.be/EO8OkkM8dbs
- Victor Bout “Merchant of Death”: https://youtu.be/v3vt_Cr5BHg
- North Korea makes almost perfect counterfeit $100 bills: https://youtu.be/949rltMc_BA
- Hezbollah and used cars from the US: https://youtu.be/pGFrpdg7RcU
April 23, 2021
Decent overview of history of financial restrictions USG has implemented written from perspective of someone who helped build the program. I'd recommend this for anyone in the financial compliance field. A bit dated at this point, i laughed at the part when Bitcoin was $15, so maybe needs an updated edition or a follow up.
September 27, 2023
Treasury’s War- The Unleashing of a New Era of Financial Warfare by Juan C. Zarate.
He is an American attorney and security advisor who served as the deputy national security advisor for combating terrorism during the George W. Bush administration. He is the chairman and co-founder of the Financial Integrity Network, a Washington, D.C.-based consulting firm, and as senior adviser at the Center for Strategic and International Studies.
This book talks about the effectiveness of economic sanctions that helped and still is a lever to cripple economies who are unstable and against America to function well in the world.
While the facts were enlightening, narrative isn’t. If you have seen enough movies, shows around diplomacy, wars which involves USA, this book will seem more like a repeat telecast.
So, if you have done the above, you can avoid this one altogether.
#review #newpost
He is an American attorney and security advisor who served as the deputy national security advisor for combating terrorism during the George W. Bush administration. He is the chairman and co-founder of the Financial Integrity Network, a Washington, D.C.-based consulting firm, and as senior adviser at the Center for Strategic and International Studies.
This book talks about the effectiveness of economic sanctions that helped and still is a lever to cripple economies who are unstable and against America to function well in the world.
While the facts were enlightening, narrative isn’t. If you have seen enough movies, shows around diplomacy, wars which involves USA, this book will seem more like a repeat telecast.
So, if you have done the above, you can avoid this one altogether.
#review #newpost
September 29, 2013
An interesting behind-the-scenes look at the work that the Treasury Department did to impose meaningful sanctions against terrorist groups and rogue nations (mostly North Korea and Iran). You'll probably like it more if you're really into financial systems and such - I lost some interest as I went through.
November 29, 2022
This book begins just after 9/11, with author lands in Kabul along with other team members of U.S. Treasury Department in November 2022. Events unfold chronologically at the start but later author adopts the approach of subject-wise discussion in an arrangement so the reader understands the gravity of dealing with each terrorist organization or country with an undivided attention.
Author, being Assistant Secretary for Terrorist Financing & Financial Crimes of U.S. Treasury Department, shares his experience & firsthand knowledge of each and every event. Mr. Zarate also shared the historical events & statistics for reader’s maximum comprehension.
This book’s primary goal is to describe how drastically 9/11 changed the approach of the U.S. in dealing with terrorism, illicit financing and its adversaries. How new tools of financial warfare came into existence, which were much more effective & devastating than conventional diplomatic & political tools to pressurize such regimes in the long term.
Reciprocally, how such regimes adapted to such new methods and found new ways of raising funds to stabilize their economy despite being kicked out of the global financial system.
Author also described the political, diplomatic & bureaucratic hurdles U.S. Administration & especially Treasury Department had to face globally in their pursuit of containing different regimes such as Iran, North Korea, Syria & Others.
Although this book was published in 2013, Mr. Zarate dedicated an entire chapter (Chapter 16) in this book describing how China is challenging the U.S. hegemony, especially in trade, manufacturing and cyber warfare. Moreover, he also warns about the U.S.’s dependence on China for investment, manufacturing and in many other fields to an alarming extent, consequently providing huge financial leverage to China over U.S. which in reciprocate, U.S. doesn’t have.
You’ll find this book quite an interesting read if you are curious to know about the following subjects:
- Brief history of mankind imposing economic sanctions since ancient Greece
- How the global financial system works?
- What leverage a Super Power has, to persuade its adversaries & even its allies in its own interest?
- How sanctioned countries & terrorist organizations raise funds?
- How the U.S. utilizes the International regulatory bodies such as world bank, IMF, SWIFT System, FATF, etc. to their own advantage?
- Dependence of sanctioned countries on narcotics trade, human trafficking & such other illicit financing
- How US freezes assets of countries & individuals as a pressure mounting tactic
- Threat to U.S. hegemony in terms of dominance, trade & cyberwarfare from China
- Relation of Pakistani Government with Dawood Ibrahim, Al-Qaeda & Taliban
- Significance of USA Patriot Act, Section 311 in designating bad banks & rogue regimes
- Crucial role of private banks in eradicating terrorist organizations & US’s adversaries from global financial system
- Dr. Abdul Qadir Khan’s assistance to North Korea & Iran in building their nuclear programs by selling nuclear secrets to them
Some other details about the book are as follows:
- Book is based on 4 parts, containing 16 chapters in total. Each part has 4 chapters on average.
- Page count of this book is 488
- Some pages in middle are dedicated to a list of illustrations
Please give your feedback in the comments section about the book. Which chapter is your personal favorite from the book and why?
Thank you for your time.
Author, being Assistant Secretary for Terrorist Financing & Financial Crimes of U.S. Treasury Department, shares his experience & firsthand knowledge of each and every event. Mr. Zarate also shared the historical events & statistics for reader’s maximum comprehension.
This book’s primary goal is to describe how drastically 9/11 changed the approach of the U.S. in dealing with terrorism, illicit financing and its adversaries. How new tools of financial warfare came into existence, which were much more effective & devastating than conventional diplomatic & political tools to pressurize such regimes in the long term.
Reciprocally, how such regimes adapted to such new methods and found new ways of raising funds to stabilize their economy despite being kicked out of the global financial system.
Author also described the political, diplomatic & bureaucratic hurdles U.S. Administration & especially Treasury Department had to face globally in their pursuit of containing different regimes such as Iran, North Korea, Syria & Others.
Although this book was published in 2013, Mr. Zarate dedicated an entire chapter (Chapter 16) in this book describing how China is challenging the U.S. hegemony, especially in trade, manufacturing and cyber warfare. Moreover, he also warns about the U.S.’s dependence on China for investment, manufacturing and in many other fields to an alarming extent, consequently providing huge financial leverage to China over U.S. which in reciprocate, U.S. doesn’t have.
You’ll find this book quite an interesting read if you are curious to know about the following subjects:
- Brief history of mankind imposing economic sanctions since ancient Greece
- How the global financial system works?
- What leverage a Super Power has, to persuade its adversaries & even its allies in its own interest?
- How sanctioned countries & terrorist organizations raise funds?
- How the U.S. utilizes the International regulatory bodies such as world bank, IMF, SWIFT System, FATF, etc. to their own advantage?
- Dependence of sanctioned countries on narcotics trade, human trafficking & such other illicit financing
- How US freezes assets of countries & individuals as a pressure mounting tactic
- Threat to U.S. hegemony in terms of dominance, trade & cyberwarfare from China
- Relation of Pakistani Government with Dawood Ibrahim, Al-Qaeda & Taliban
- Significance of USA Patriot Act, Section 311 in designating bad banks & rogue regimes
- Crucial role of private banks in eradicating terrorist organizations & US’s adversaries from global financial system
- Dr. Abdul Qadir Khan’s assistance to North Korea & Iran in building their nuclear programs by selling nuclear secrets to them
Some other details about the book are as follows:
- Book is based on 4 parts, containing 16 chapters in total. Each part has 4 chapters on average.
- Page count of this book is 488
- Some pages in middle are dedicated to a list of illustrations
Please give your feedback in the comments section about the book. Which chapter is your personal favorite from the book and why?
Thank you for your time.
April 20, 2025
Juan Zarate’s Treasury’s War: The Unleashing of a New Era of Financial Warfare offers a revealing account of how the U.S. Department of the Treasury—particularly its Office of Terrorism and Financial Intelligence (TFI) and Office of Foreign Assets Control (OFAC)—transformed from a relatively obscure agency into one of the most powerful instruments of U.S. national security in the post-9/11 world. Zarate, who served as the first Assistant Secretary of the Treasury for TFI, provides a firsthand perspective on how financial tools became frontline weapons in America’s global counterterrorism and geopolitical strategies.
The book is especially fascinating in its behind-the-scenes look at how OFAC, once best known for enforcing economic sanctions with limited global visibility, grew into a powerhouse capable of crippling adversaries, isolating rogue states, and enforcing U.S. foreign policy without firing a shot. Zarate charts the evolution of financial warfare—what he calls a “new form of warfare” that emerged from the ashes of 9/11—through case studies involving al-Qaeda, Iran, North Korea, and illicit financial networks. A central innovation was the leveraging of America’s central position in the global financial system to pressure not just adversaries directly, but their financial intermediaries—particularly banks—who were suddenly held responsible for “cleaning” their networks or facing serious consequences.
The book is, in many ways, a celebration of this innovation. Zarate is unabashedly proud of the development and execution of these tools, especially the authority to label any bank, anywhere in the world, as an “institution of primary money laundering concern”—a kind of financial death sentence. His enthusiasm for this new approach is palpable and, at times, reads as a kind of technocratic thriller. But this is precisely where the book’s strength and its blind spot intersect. While Zarate is clear about the effectiveness and precision of the tools, the question of long-term implications, due process, and proportionality lingers just under the surface.
As Stewart Baker—former DHS policy chief and a voice worth noting in this space—aptly observed in his review of Treasury’s War, the tools Zarate celebrates look quite different when viewed from the receiving end. Baker’s critique is striking: “Like a Predator strike, it looks a little different on the ground. If you own a bank, Treasury's designation can wipe out your investment overnight... what begins as a sobering responsibility soon becomes a routine part of the bureaucracy's toolbox, prone to overuse and free from oversight.” It’s a critical counterpoint to Zarate’s narrative, highlighting that while financial warfare can be effective and nonviolent, it can also operate in a murky legal and ethical grey zone—largely outside judicial review and democratic oversight.
Ultimately, Treasury’s War is a vital read for anyone interested in the intersections of finance, national security, and international relations. It offers a rare window into how economic power is wielded behind closed doors, and how institutions like OFAC have come to shape the global order. But it also leaves the reader with urgent questions: how should such power be checked? What recourse do innocent parties have? And at what point does an extraordinary tool of statecraft become an ordinary bureaucratic bludgeon? Zarate’s book doesn’t fully engage with these tensions—but it certainly lays the groundwork for the conversations we should be having.
The book is especially fascinating in its behind-the-scenes look at how OFAC, once best known for enforcing economic sanctions with limited global visibility, grew into a powerhouse capable of crippling adversaries, isolating rogue states, and enforcing U.S. foreign policy without firing a shot. Zarate charts the evolution of financial warfare—what he calls a “new form of warfare” that emerged from the ashes of 9/11—through case studies involving al-Qaeda, Iran, North Korea, and illicit financial networks. A central innovation was the leveraging of America’s central position in the global financial system to pressure not just adversaries directly, but their financial intermediaries—particularly banks—who were suddenly held responsible for “cleaning” their networks or facing serious consequences.
The book is, in many ways, a celebration of this innovation. Zarate is unabashedly proud of the development and execution of these tools, especially the authority to label any bank, anywhere in the world, as an “institution of primary money laundering concern”—a kind of financial death sentence. His enthusiasm for this new approach is palpable and, at times, reads as a kind of technocratic thriller. But this is precisely where the book’s strength and its blind spot intersect. While Zarate is clear about the effectiveness and precision of the tools, the question of long-term implications, due process, and proportionality lingers just under the surface.
As Stewart Baker—former DHS policy chief and a voice worth noting in this space—aptly observed in his review of Treasury’s War, the tools Zarate celebrates look quite different when viewed from the receiving end. Baker’s critique is striking: “Like a Predator strike, it looks a little different on the ground. If you own a bank, Treasury's designation can wipe out your investment overnight... what begins as a sobering responsibility soon becomes a routine part of the bureaucracy's toolbox, prone to overuse and free from oversight.” It’s a critical counterpoint to Zarate’s narrative, highlighting that while financial warfare can be effective and nonviolent, it can also operate in a murky legal and ethical grey zone—largely outside judicial review and democratic oversight.
Ultimately, Treasury’s War is a vital read for anyone interested in the intersections of finance, national security, and international relations. It offers a rare window into how economic power is wielded behind closed doors, and how institutions like OFAC have come to shape the global order. But it also leaves the reader with urgent questions: how should such power be checked? What recourse do innocent parties have? And at what point does an extraordinary tool of statecraft become an ordinary bureaucratic bludgeon? Zarate’s book doesn’t fully engage with these tensions—but it certainly lays the groundwork for the conversations we should be having.
February 25, 2020
A great book for those deeply interested in finance, economics, and history, but probably a little overly narrow and detailed for casual readers.
The world of financial warfare is exploding. As the economic interconnectedness of the world has grown exponentially, so too has the potential of warfare through these means. This warfare - the offense and defense of it - is an integral part of US national security strategy. Interestingly, the centrality of the US’ current model is due in large part to the role of New York has the financial center of the world.
I can’t help but think that this battlefield describes, while probably important for safety today, postpones a post-conflict world where conflicts between cultures and civilizations wanes. Along these lines, every tool and artifice described by the author is a stick; there were no carrots offered as to how to incentivize good behavior. The only one that can be argued is the incentive of maintaining access to US financial infrastructure, but this seems clearly an inadequate incentive in a polarized and competitive world. The lack of bigger thinking around incentives seems like a huge gap in national strategy and thinking as described by the author.
Juan does describe the interconnected was of the global system as a deterrent, China can’t use its “dollar weapon” because it could dramatically harm its own economy if it were to severely harm ours. It’s seems that fighting for entanglement and doing so through soft power is the best way to prevent economic run weight through financial warfare.
Juan does a great job recounting the birth and development of financial warfare in the 21st century in an accesible and very readable way. His writing is clear, fact driven, and not burdened with an aspiration for an overly academic level of grammar and vocabulary that can add lead weight top books like this.
Despite the clear writing, the excellent narrative and excellently positioned need for deeper thinking about this type of conflict, it’s scary to me that this analysis is so esoteric, so complex, that most people will utterly fail to grasp how the macro trends described in this book underly so many of the headlines we read daily. Most people can’t reckon with the complexities of financial warfare - they care about their job, in their neighborhood, which seems totally isolated from this global currents. In light of that, how can you expect democratic elections to yield the results that best position America to compete on the global stage. I wish we could spend some time thinking more about how to help the average person understand the global stakes.
Other thoughts:
- Does a great job explaining why what seems to make so much sense in hindsight was a battle in the early days. The victories along the way serve to illustrate the emerging understanding of this form of warfare and the importance to the global picture
The world of financial warfare is exploding. As the economic interconnectedness of the world has grown exponentially, so too has the potential of warfare through these means. This warfare - the offense and defense of it - is an integral part of US national security strategy. Interestingly, the centrality of the US’ current model is due in large part to the role of New York has the financial center of the world.
I can’t help but think that this battlefield describes, while probably important for safety today, postpones a post-conflict world where conflicts between cultures and civilizations wanes. Along these lines, every tool and artifice described by the author is a stick; there were no carrots offered as to how to incentivize good behavior. The only one that can be argued is the incentive of maintaining access to US financial infrastructure, but this seems clearly an inadequate incentive in a polarized and competitive world. The lack of bigger thinking around incentives seems like a huge gap in national strategy and thinking as described by the author.
Juan does describe the interconnected was of the global system as a deterrent, China can’t use its “dollar weapon” because it could dramatically harm its own economy if it were to severely harm ours. It’s seems that fighting for entanglement and doing so through soft power is the best way to prevent economic run weight through financial warfare.
Juan does a great job recounting the birth and development of financial warfare in the 21st century in an accesible and very readable way. His writing is clear, fact driven, and not burdened with an aspiration for an overly academic level of grammar and vocabulary that can add lead weight top books like this.
Despite the clear writing, the excellent narrative and excellently positioned need for deeper thinking about this type of conflict, it’s scary to me that this analysis is so esoteric, so complex, that most people will utterly fail to grasp how the macro trends described in this book underly so many of the headlines we read daily. Most people can’t reckon with the complexities of financial warfare - they care about their job, in their neighborhood, which seems totally isolated from this global currents. In light of that, how can you expect democratic elections to yield the results that best position America to compete on the global stage. I wish we could spend some time thinking more about how to help the average person understand the global stakes.
Other thoughts:
- Does a great job explaining why what seems to make so much sense in hindsight was a battle in the early days. The victories along the way serve to illustrate the emerging understanding of this form of warfare and the importance to the global picture
September 23, 2022
Completed this book.
𝐁𝐨𝐨𝐤 : Treasury's War
𝐀𝐮𝐭𝐡𝐨𝐫 : Juan C. Zarate
𝐘𝐎𝐏 : 2014
𝐆𝐞𝐧𝐫𝐞: Politics/Economics
𝐑𝐚𝐭𝐢𝐧𝐠: 4.7/5
𝐑𝐞𝐯𝐢𝐞𝐰: Coming over to review of this Book. Its been divided into 4 Parts and 16 Chapters.Total 432 Pages.
This book highlights the American Dominance on World Economics System.It make understand how American's developed this Tool of Economic Dominance to National Security one.
World mostly trade is being done through dollar. And its world reliable Currency.World Financial Hub is New York. After 9/11, US passed Patriot Act. Its sec 311 give immense powers to US treasury department.
SWIFT is Brussels based Telecom network in Banking world for intra bank transactions.US treasury acquired data of it.then waged financial war on Al-Qaeda, Iran,North Korea.
US develop FATF focused on Terror Financing then creat sub groups like Asia Pacific Group, Eurasia Group, MENA Group. Bringing China and Russia in it makes FATF more active for his leverage against Terror Financing.
At End, US developed new kind of Warfare.That is financial Warfare. Used it against its opponents cutting them off from financial systems, designated its bank Bad, Office of foreign assets control (OFAC) freeze the assest of opponents regimes in US and putting them in designated list.
#Recommended......
#Thanks
𝐁𝐨𝐨𝐤 : Treasury's War
𝐀𝐮𝐭𝐡𝐨𝐫 : Juan C. Zarate
𝐘𝐎𝐏 : 2014
𝐆𝐞𝐧𝐫𝐞: Politics/Economics
𝐑𝐚𝐭𝐢𝐧𝐠: 4.7/5
𝐑𝐞𝐯𝐢𝐞𝐰: Coming over to review of this Book. Its been divided into 4 Parts and 16 Chapters.Total 432 Pages.
This book highlights the American Dominance on World Economics System.It make understand how American's developed this Tool of Economic Dominance to National Security one.
World mostly trade is being done through dollar. And its world reliable Currency.World Financial Hub is New York. After 9/11, US passed Patriot Act. Its sec 311 give immense powers to US treasury department.
SWIFT is Brussels based Telecom network in Banking world for intra bank transactions.US treasury acquired data of it.then waged financial war on Al-Qaeda, Iran,North Korea.
US develop FATF focused on Terror Financing then creat sub groups like Asia Pacific Group, Eurasia Group, MENA Group. Bringing China and Russia in it makes FATF more active for his leverage against Terror Financing.
At End, US developed new kind of Warfare.That is financial Warfare. Used it against its opponents cutting them off from financial systems, designated its bank Bad, Office of foreign assets control (OFAC) freeze the assest of opponents regimes in US and putting them in designated list.
#Recommended......
#Thanks
February 1, 2025
The book is well written in a clear and easy style. Two things stood out to me the most:
- p 376 Mafias are today truly a transnational problem: a threat to security, especially in poor and conflict-ridden countries.
- p 419 The doctrine of deterrence by entanglement.
On another note,
- The author frequently makes a reference to weapons of mass destruction (WMD), however, "the case for invading Iraq in March 2003 was built on three basic premises: that Iraq had WMD; that it was developing more of them; and that it was failing to comply with its disarmament obligations under a series of United Nations Security Council resolutions. All of these premises were based on scraps of unreliable information. None of them was true" Robert E. Kelley.
- p 376 Mafias are today truly a transnational problem: a threat to security, especially in poor and conflict-ridden countries.
- p 419 The doctrine of deterrence by entanglement.
On another note,
- The author frequently makes a reference to weapons of mass destruction (WMD), however, "the case for invading Iraq in March 2003 was built on three basic premises: that Iraq had WMD; that it was developing more of them; and that it was failing to comply with its disarmament obligations under a series of United Nations Security Council resolutions. All of these premises were based on scraps of unreliable information. None of them was true" Robert E. Kelley.
February 23, 2025
"Our competitors have learned from our use of power, and our enemies have witnessed our vulnerabilities"
Interesting read. I was totally on the author's side for the first third of the book, and then he started walking through some specific scenarios where it seemed clear that he and his team had no clue what they were doing. It's cool that they tried though!
Separately, it's wild to look back on a 10+ year old book and see takes like "our response to the 2008 financial crisis stunk" and "there's no way Obama can strike a deal with Iran".
There's a brief mention of crypto at the end of the book, and then the standard "list of policy recs that are kind of divorced from what the book was actually about"
Interesting read. I was totally on the author's side for the first third of the book, and then he started walking through some specific scenarios where it seemed clear that he and his team had no clue what they were doing. It's cool that they tried though!
Separately, it's wild to look back on a 10+ year old book and see takes like "our response to the 2008 financial crisis stunk" and "there's no way Obama can strike a deal with Iran".
There's a brief mention of crypto at the end of the book, and then the standard "list of policy recs that are kind of divorced from what the book was actually about"
November 4, 2017
This is a detailed behind the scenes look on how the US Treasury uses various tools to pressure US adversaries by an insider. We learn of the development of these programs and how they were applied to strangle Al Qaeda, North Korea, Iraq and Iran. In essence, the US Treasury relies on its ability to designate foreign institutions as money laundering centers or terrorist financing organizations to isolate them from the US and international financial system. Access to SWIFT data is key to tracking illicit fund flows and identify front companies.
This book is quite detailed but could be quite dry for those not interested in the intricacies of the financial system.
This book is quite detailed but could be quite dry for those not interested in the intricacies of the financial system.
August 23, 2021
Juan Zarate takes the challenge to explains some of the most important geopolitical concepts of the previous decade. He explained how this new kind of war, the financial war, came to be and the actors who shaped it.
Sadly, often he focuses more on the political squabbles expanding more the US Gov internal politics than financial concepts which I was more interested in. Conceptually, it is a great book but it feels like having 80 pages more than it should be.
Finally, I read this book with the eyes of someone in 2021 and I believe this book will benefit from a review including today’s FinTech muddle.
Sadly, often he focuses more on the political squabbles expanding more the US Gov internal politics than financial concepts which I was more interested in. Conceptually, it is a great book but it feels like having 80 pages more than it should be.
Finally, I read this book with the eyes of someone in 2021 and I believe this book will benefit from a review including today’s FinTech muddle.
March 7, 2025
I never thought a book about financial warfare could be this interesting, but Treasury’s War pulled me in. Zarate gives a behind-the-scenes look at how the U.S. has used financial tools—sanctions, banking pressure, and economic isolation—to go after terrorists, rogue states, and criminals. He makes complex strategies easy to follow, and the real-world impact is fascinating. It’s wild to see how cutting off access to the financial system can be just as powerful as military action. If you're into national security, economics, or just want a fresh perspective on modern warfare, this is a great read.
March 30, 2020
For a rather dry history of the U.S. government's development of financial pressure tools after 9/11, this book is a pretty peppy read -- especially in the book's earlier sections, when Treasury was assembling and deploying new tools at a really rapid clip. The book functions as a good explainer on how non-traditional financial sanctions work, and how the post-9/11 turf battles profoundly shaped the way that the Treasury Department works. The final sections, where Zarate's coolness towards the Obama team shines through, slip into generalities and are less compelling.
August 4, 2020
A unique perspective on the War on Terror era that is rarely spoken about. Zarate's first hand experience, while colored, allows the reader to fully view the workings of government behind the curtain, from the expansion of bureaucracy and the repercussions of it, the delicate balance of inter-agency coordination, and, of course, walking the fine line of U.S. national interests without destroying the global financial system. There were moments that were dry, but the narrative perspectives really added flavor throughout the book.
August 16, 2022
Interesting but I was expecting to enjoy this book more than I did. I was anticipating more technical aspects of how OFAC identifies SDNs and those SDNs cascade down to the financial institutions responsible for enforcement. Enforcement is a heavy lift for financial institutions and was anticipating reading more about that.
December 29, 2018
Fascinating book. As usual the United States can never make up its mind on how to doggedly pursue its enemies and wastes so much time with diplomacy, negotiations, diplomacy and legacy searching. Fascinating stuff though.
January 11, 2020
An interesting book that shows how USA uses its financial power to strike blows at its enemies and dictate the path of the global financial world. A great read for anyone interested in compliance, anti-money laundering, countering terrorist financing, and sanctions.
October 25, 2023
This was an interesting breakdown of the US’ approach to addressing financing threats for terrorist and organised criminal actors although I agree with some previous reviews that it reflects mostly on the history of the organisations globally and in the US. I appreciated the review of the hawala system and the state interactions with large banks to launder money
This entire review has been hidden because of spoilers.
November 4, 2023
Boring and too long. I learned some information, but it lost my attention early on. Sadly, I always have to finish books (except one ever) so I had to have it drag on while I kept thinking of what other book I could be reading!!!
May 27, 2019
Very interesting topic, and some parts of it were great, but on the whole the writing could've used a stricter editor.
December 3, 2023
This was an excellent book! I am a firm believer that if there was a sixth major intelligence discipline, it would be Financial Intelligence.
May 21, 2025
Made me want to join the Treasury Department.
Favorite line about Treasury agents: Accountants with a gun and a badge.
Favorite line about Treasury agents: Accountants with a gun and a badge.
August 1, 2025
didn't finish
October 5, 2021
This book was recommended to me by a colleague. It was not at al what I was expecting. If you want to know more about sanctions and how they can be used to avoid physical warfare, this is the perfect book.
January 22, 2017
I learned a LOT in this book. Really fascinating book that gets into the part of terror in the world that we so easily dismiss but is the most important: MONEY. And as Zarate points out...he worked at the Department of the Treasury and also at the White House...without money, terror can't happen...rogue regimes can't go rogue and through the financial systems America can bring anyone to the negotiating table. Why? Because the cost of food for a country's citizens is always greater then any bomb they can get their hands on. This is about the ability of the US to use its leverage in the financial system as a weapon to deter terror. And it really can be powerful as Zarate shows:
- After 9/11 President Bush signed through executive order new authorities that allowed the department of the Treasury to use compliance with the US banking laws to be a precursor for banks to have access to the global financial system. In doing this it also allowed the US to designate banks that were NOT in compliance. In the global banking system that is power.
- Through the OFAC (the Office of Foreign Assets Control) the Department of the Treasury could freeze assets in any bank that it discovered was being used for terrorist activities...EVEN if the bank had no idea the money was being used this way. This act alone made banks very skittish about dealing with shady governments and foreign actors that could be terrorists. It put their cash on the hook and their reputations.
- As Treasury started to assert themselves in attacking terrorist financing...they found an obstacle and of all things partnership with both the FBI and the CIA. Both organizations who were following the money to see where it was going so they could stop terror plots or finish investigations.
- By designating actual individuals as terrorist financiers it actually delivered to the intelligence agencies a treasure trove of information as money men for terror groups would try to fall back on front companies which would be exposed and then this would lead to documents. Most of the funders of Al Qaeda were swept up after an International raid in Bosnia caught financiers with lists of donors who were then turned in, followed and their finances frozen or shut down.
- Saudi Arabia was very cautious about terrorist financing...until they were attacked by Al Qaeda in the kingdom. The Interior minister was almost killed in a bombing and they signed onto the Treasury Departments crusade to go hunt down the money. It led of all things to both Kuwait, Dubai and of all places Citibank...where Hezbollah had set up bank accounts that were making payments to martyrs of the Palestinian cause. Citibank was so alarmed at the reputational impact of this they closed down the accounts.
- By labeling banks in what are known as 311 actions the banks themselves were exposed to legal liability for their actions of harboring money for terrorists. This often led to runs on the bank which crippled them. In Macau a bank associated with money laundering for North Korea was hit with a 311 action and $25 million in its account identified as belonging to North Korea were frozen. This action so stunned the North Korean government (and China which disavowed them) that they returned to the six party nuclear talks. The money became the language of the politics.
- When it came to Iran both the Bush administration and the Obama administration used the Treasury department to put teeth in sanctions and to target their banks. Because they mixed their funding for the Republican Guard with funding for Hezbollah and legitimate businesses it made it much easier for Treasury to go target the banks who were doing business with Iranian accounts and to shut the Iranians out of the system. This ultimately was one of the reasons why they came forward to strike the nuclear deal.
Really interesting book from a guy who worked the inside and who personally briefed the President about how powerful money is to nations within the global financial system...
- After 9/11 President Bush signed through executive order new authorities that allowed the department of the Treasury to use compliance with the US banking laws to be a precursor for banks to have access to the global financial system. In doing this it also allowed the US to designate banks that were NOT in compliance. In the global banking system that is power.
- Through the OFAC (the Office of Foreign Assets Control) the Department of the Treasury could freeze assets in any bank that it discovered was being used for terrorist activities...EVEN if the bank had no idea the money was being used this way. This act alone made banks very skittish about dealing with shady governments and foreign actors that could be terrorists. It put their cash on the hook and their reputations.
- As Treasury started to assert themselves in attacking terrorist financing...they found an obstacle and of all things partnership with both the FBI and the CIA. Both organizations who were following the money to see where it was going so they could stop terror plots or finish investigations.
- By designating actual individuals as terrorist financiers it actually delivered to the intelligence agencies a treasure trove of information as money men for terror groups would try to fall back on front companies which would be exposed and then this would lead to documents. Most of the funders of Al Qaeda were swept up after an International raid in Bosnia caught financiers with lists of donors who were then turned in, followed and their finances frozen or shut down.
- Saudi Arabia was very cautious about terrorist financing...until they were attacked by Al Qaeda in the kingdom. The Interior minister was almost killed in a bombing and they signed onto the Treasury Departments crusade to go hunt down the money. It led of all things to both Kuwait, Dubai and of all places Citibank...where Hezbollah had set up bank accounts that were making payments to martyrs of the Palestinian cause. Citibank was so alarmed at the reputational impact of this they closed down the accounts.
- By labeling banks in what are known as 311 actions the banks themselves were exposed to legal liability for their actions of harboring money for terrorists. This often led to runs on the bank which crippled them. In Macau a bank associated with money laundering for North Korea was hit with a 311 action and $25 million in its account identified as belonging to North Korea were frozen. This action so stunned the North Korean government (and China which disavowed them) that they returned to the six party nuclear talks. The money became the language of the politics.
- When it came to Iran both the Bush administration and the Obama administration used the Treasury department to put teeth in sanctions and to target their banks. Because they mixed their funding for the Republican Guard with funding for Hezbollah and legitimate businesses it made it much easier for Treasury to go target the banks who were doing business with Iranian accounts and to shut the Iranians out of the system. This ultimately was one of the reasons why they came forward to strike the nuclear deal.
Really interesting book from a guy who worked the inside and who personally briefed the President about how powerful money is to nations within the global financial system...
April 13, 2015
Juan Zarate helped head up the U.S. Department of Treasury's financial battle against terrorists during the Bush administration, and later moved on to the National Security Council. He clearly has a great deal of knowledge and enthusiasm for the subject matter. Unfortunately, the book frequently bogged down in bureaucratese. Moreover, the occasional digression into more personal material often seemed odd and out-of-place--the descriptions of other people came across as awkward, even when positive, and some parts left me scratching my head as to relevance. Ultimately, it discusses some important developments and programs (though I did not always agree with his view of what was necessary, ethical, or Constitutionally sound). I hope that in the future, someone with more literary skill will write a comprehensive history that's less of a slog to read.
June 11, 2015
Somewhere in the middle of this book, I lost my drive to continue; it became onerous to keep turning the pages, as it felt repetitive and more like a textbook full of facts. Still, I went on and finished the book, as I didn't want to miss the reality of new war, the financial war. The Unfortunate thing is that like all weapons of war, no matter how cutting-edge, the enemies will eventually catch up. And just as toy drones and generic drugs, it will be fairly easy to use these tools. These fianncial tools in the hands of bad actors will effect the little guy the most. With mega private data thefts in recent years (Anthem and US gov) by "unknown" actors, the freight train is visible at the far end of the tunnel. When that train arrives, what protections will there be for the rest of us; that's the next (more relevent) book.
January 7, 2024
Post public service autobiography, long on the author's details of his time in Treasury, a bit short on a more robust and substantive overview of Treasury's policies more broadly.
December 29, 2017
For an account of US economic warfare since 9/11 this is a useful guide. It's pretty heavy going in places.
I got to the first of two chapters on North Korea on the day when President Trump announced he was going to 'do something' along the same lines, and I thought then that I had a good idea what that meant. By the end of the second chapter I realised it 'may not be as easy as you think'. By the end of the book I could see it would be a whole lot harder than it was in 2005. So I guess Jay-Zee must have taught me something.
I got to the first of two chapters on North Korea on the day when President Trump announced he was going to 'do something' along the same lines, and I thought then that I had a good idea what that meant. By the end of the second chapter I realised it 'may not be as easy as you think'. By the end of the book I could see it would be a whole lot harder than it was in 2005. So I guess Jay-Zee must have taught me something.
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