How we're tying up terrorists' cash

•North Korea agreed to come back to the table in the six-party talks on their nuclear program when the regime found itself almost completely isolated from the international financial system after the United States designated the bank they were using to launder illegal proceeds as a proliferator.

•Financial measures targeted at Iran's nuclear and missile entities and the banks complicitous in their misconduct have left Iran financially and politically isolated. International banks have largely scaled back or cut off business with Iran, and Iranian banks are now largely viewed as pariahs in the international financial system. This has intensified a debate in Iran on whether the country's best interests lie in continued defiance and isolation.

A key advantage to this approach is that it has made the private sector our ally, in contrast to traditional country sanctions, which often put the government and the business community at odds. Members of the international banking community go beyond their legal requirements and voluntarily cut off business with certain individuals, entities, or regimes because they do not want to risk handling illegitimate business. These are good corporate citizens who care about protecting their institutions' credibility and doing their part to make the world a safer place. Together we have built a coalition where private sector actions ultimately amplify the effectiveness of government-imposed measures.

Other countries are joining this effort. Britain, for instance, has a newly passed counterterrorism law that will expand its ability to take action against terrorists and proliferators utilizing London banks to finance their activities.

Today, countries recognize that increasing transparency in the financial system and implementing standards to address money laundering along with counterterrorist and counterproliferation financing is a competitive advantage in the global marketplace. Countries want to be viewed as trusted partners with a strong reputation for a safe financial sector.

Analyzing financial intelligence and imposing targeted financial measures have become valuable components of the president's overall national security strategy. They not only increase the transparency and integrity of our financial system but also help to keep us safe.

• Stuart Levey is the undersecretary for terrorism and financial intelligence at the US Department of the Treasury.

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