EU reconsiders its position on deporting terrorist suspects to the US

The European Union is rethinking its refusal to send accused terrorists to face trial in the United States, which has capital punishment.

Justice and home affairs ministers from all 15 member states will discuss the issue today, in addition to other ways of countering terrorism, money-laundering and cybercrime.

EU officials believe that if America's judicial authorities gave assurance that capital punishment would not be enforced in the case of suspected terrorists, then an agreement might be reached.

Chris Patten, the European Commissioner for external relations, and Antonio Vitorino, his colleague responsible for justice and home affairs, have written a joint paper calling for the EU to allow extradition "while, at the same time, maintaining the EU's consistent opposition to the death penalty".

Theysuggest that the focus should be shifted away from a direct response to the attack on the US and towards international co-operation across several fronts. "Terrorism is a phenomenon which is increasingly linked with the drugs trade and other organised crime," the document argues. "It feeds off the arms trade and is fed through money laundering."

Mr Patten and Mr Vitorino demand more pressure on states "whose banking systems and traditions facilitate the generation and transfer of terrorist finance". Six EU countries – Belgium, Denmark, Ireland, Luxembourg, Austria and Sweden – have yet to sign the UN's Convention for the Suppression of Financing of Terrorism, drafted in December 1999. Britain is the only one of the 15 member states to have ratified it.

Barclays bank confirmed yesterday that it had frozen an account suspected of belonging to one of Mr bin Laden's followers at a west London branch. However, officers from the Metropolitan Police's Special Branch and the National Criminal Intelligence Service (NCIS) are also investigating an underground banking system used by Middle Eastern and Asian money-launderers based in Britain. Intelligence officers believe that members of Mr bin Laden's al-Qa'ida organisation are more likely to use the so-called "hawala" banks than High Street ones.

Under the system, a "hawaladar", or broker, is given a sum of money in one country and for a fee arranges for a banker in another country to pay the same amount of money, usually in local currency, to a nominated person. Hawala bankers have been used in the past to exchange money in drug deals and to buy terrorist equipment.

Britain is believed to be a significant staging post in Mr bin Laden's network, particularly for investment of funds, planning operations and purchasing specialist equipment.

The Treasury and the Home Office are looking at ways of strengthening laws against money laundering, and are considering giving extra resources to NCIS's new Economic Crime Unit. Under the new Proceeds of Crime Bill, which is going through Parliament, the police will be given greater powers to seize the assets of suspected criminals and terrorists.

* The German government has proposed a DM3bn (£1bn) plan to increase its security measures after the attacks in the US. The funding would be allocated to the army, the BND intelligence agency and airports and embassies abroad.