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20 of 33 DOCUMENTS Copyright 2002 The Washington Post The Washington Post June 01, 2002, Saturday, Final Edition

SECTION: A SECTION; Pg. A13 LENGTH: 982 words HEADLINE: Terrorism Probes Falter in Europe; Prosecutors Lack Evidence to Pursue Frozen-Assets Cases BYLINE: Peter Finn, Washington Post Foreign Service DATELINE: LUXEMBOURG BODY: Last December, officials from Luxembourg's Financial Intelligence Unit raided a series of banks here, hauling away more than 100,000 pages of documents and freezing nearly $ 200 million in assets. The money, officials said at the time, was controlled by people suspected of links to al-Barakaat, a Somali-owned money-transfer service that President Bush had publicly identified as a financial backer of Osama bin Laden's al Qaeda network. The sweep, conducted in response to the U.S. announcement, blocked more allegedly tainted money than all other such actions worldwide, according to Carlos Zeyen, the judge who heads the intelligence unit. But an investigation over the following months did not bear out the initial supposition of links to al-Barakaat, which has denied any connection to terrorists. And U.S. officials never listed the Luxembourg action on public statements about efforts to block funding of terrorism. So in April, following a court action in Luxembourg challenging the freeze, the money was quietly released. The Financial Intelligence Unit continues to examine the documents it seized - "The investigation continues," Zeyen said during an interview at his office here -- but it has not produced a prosecutable case. Almost nine months after Sept. 11, U.S. and European law enforcement authorities maintain close cooperation in trying to ferret out terror-connected money and suspects. But there is increasing concern in Europe that many of these probes will face a hard reckoning, because prosecutors eventually must go to court with proof that terrorists received funds. The Luxembourg funds "were unfrozen because no direct link [with terrorism] could be established, at least as far as Luxembourg is concerned," Zeyen said. "In order to maintain a freezing order of assets, and I think it is exactly the same in the United States, you have to give evidence in court." A spokeswoman for the U.S. Treasury declined to discuss the department's reluctance to trumpet Luxembourg's freezing of the accounts. But one U.S. official said it was founded on doubts about the suspected connections between holders of the accounts, whose names Luxembourg has kept confidential, and al-Barakaat. There were also questions about the ability to prove any terrorist link in court.