By Lydia Chen
Bank of China today dismissed allegations that it helped terrorist groups by transferring millions of dollars and said the accusations are "sheer nonsense" and are "completely unfounded."
The bank has always "strictly" adhered to regulations regarding international money laundering and terrorism financing. Its internal rules also forbid providing any services to terrorist groups, Wang Zhaowen, a spokesman for the country's third largest lender said, Xinhua news agency reported.
Kent Henderson, who represents more than 100 Israelis, has alleged in a complaint filed on August 22 in the Los Angeles Superior Court, that from 2003, Bank of China conducted dozens of wire transfers worth several million dollars to Hamas and Islamic Jihad through branches in the United States, the Associated Press reported.
The banking services "caused, enabled and facilitated the terrorist attacks in which the plaintiffs and their decedents were harmed and killed," Henderson wrote in the complaint, which seeks unspecified damages.
Wang said the bank will clarify its position through legal process and reserves the right to file lawsuits or take other legal action.
"We trust that the US court will reach a fair verdict based on the facts," Wang said.
The Shurat HaDin Israel Law Center, which is backing the suit against Bank of China, began suing banks on behalf of victims of terrorism in May. It accused the financial institutions, including UBS AG, of providing financial services that ended up helping terrorist groups. Last month, five Lebanese banks were sued in the US and Canada.
Source: Shangai Daily
Showing posts with label Hamas. Show all posts
Showing posts with label Hamas. Show all posts
on Monday, May 28, 2012
The Bank of China has brushed off accusations that it was involved in transferring money to terrorists acting against Israeli citizens as "sheer nonsense".
The statement comes in the wake of reports in the western media that over 100 Israeli victims of terrorism have filed a lawsuit in a US court against it demanding an end to the transfer of funds to terrorists. "The accusation is absolutely groundless. Bank of China is prepared to fight the suit," BOC said.
A group of Israelis have moved the US court saying the bank has put through dozens of wire transfers totalling several million dollars to Hamas and Islamic Jihad.
The funds had helped to finance attacks on them between 2004 and 2007. The lawsuit also said the BOC has "knowingly assisted Hamas and the Islamic Jihad," the lawsuit alleged.
Source: Times of India
The statement comes in the wake of reports in the western media that over 100 Israeli victims of terrorism have filed a lawsuit in a US court against it demanding an end to the transfer of funds to terrorists. "The accusation is absolutely groundless. Bank of China is prepared to fight the suit," BOC said.
A group of Israelis have moved the US court saying the bank has put through dozens of wire transfers totalling several million dollars to Hamas and Islamic Jihad.
The funds had helped to finance attacks on them between 2004 and 2007. The lawsuit also said the BOC has "knowingly assisted Hamas and the Islamic Jihad," the lawsuit alleged.
Source: Times of India
The government has admitted that it is allowing hundreds of millions of dollars to be transferred to Hamas in Gaza, the watchdog organization Shurat Hadin charged on Thursday.
Organization head Nitzana Darshan-Leitner quoted from a letter she received from the legal adviser of the Prime Minister's Office that said, "The transfer of funds to the Palestinian Authority in the Gaza Strip takes place with the knowledge of the government of Israel for diplomatic reasons."
However, Mark Regev, a spokesman for the Prime Minister's Office, told The Jerusalem Post that the funds mentioned in the legal adviser's letter referred to the money from customs taxes belonging to the PA in accordance with the Paris Agreement of 1994.
According to the agreement, the customs tax for goods imported to the West Bank is collected by Israel at the ports and then delivered to the PA in Ramallah.
"Not a single penny of this money goes to the Hamas," said Regev. The money is used to pay PA employees working in the Gaza Strip, he added.
However, Shurat Hadin attorney Ro'i Kochavi said that his organization's allegations were not related to these funds but to other transfers by the Bank of Israel and the Postal Authority.
"The transfer of hundreds of millions [dollars' worth] of shekels in cash (bills and coins) to the Gaza Strip has continued since the Hamas takeover of Gaza last year," wrote Shurat Hadin. "The money is transferred in armored cars from banks in Judea and Samaria by the Postal Authority and others. Some of the money is used to replace bills that deteriorated [and could not be used] and some to launder money that the Hamas smuggles into the Gaza Strip from Iran via Egypt."
Kochavi told the Post that the Iranian money was delivered in large bills. The armored cars sent by banks with branches in Ramallah and Gaza bring Israeli shekels to the Gaza-Israel border, where they switch loads with armored cars from Gaza carrying the Iranian money, he said.
Kochavi charged that Hamas was using the shekels to pay their armed forces.
Meanwhile, the Iranian money is brought to the banks in the West Bank, where it is sold to the Bank of Israel in return for shekels, he said. The cycle then repeats itself.
In a letter to Kochavi, Merav Batzri, assistant to the legal adviser of the Bank of Israel, wrote that the bank did not know anything about the facts presented in Shurat Hadin's letter. However, it added that "the Bank of Israel also serves as a professional economic adviser to the government of Israel. In this context, it is involved with the relations between banks in Israel and those operating in the areas of the Palestinian Authority. Furthermore, the decision to transfer funds to the Gaza Strip is based on a wide basket of considerations aside from economic considerations, including political, security and others. These are the responsibility of the government rather than the bank."
Attorney Ronen Baharav wrote that "the Postal Bank Company, which provides services to the Postal Authority, is required from time to time to transfer money or cash checks on behalf of recipients living in the Gaza Strip. The bank's activities are carried out with the knowledge of the relevant authorities."
Darshan-Leitner wrote that she was considering petitioning the High Court of Justice, charging that the government was violating the Prohibition of Terrorist Funding Law and the Prohibition against Money Laundering Law.
Source: JPost
Organization head Nitzana Darshan-Leitner quoted from a letter she received from the legal adviser of the Prime Minister's Office that said, "The transfer of funds to the Palestinian Authority in the Gaza Strip takes place with the knowledge of the government of Israel for diplomatic reasons."
However, Mark Regev, a spokesman for the Prime Minister's Office, told The Jerusalem Post that the funds mentioned in the legal adviser's letter referred to the money from customs taxes belonging to the PA in accordance with the Paris Agreement of 1994.
According to the agreement, the customs tax for goods imported to the West Bank is collected by Israel at the ports and then delivered to the PA in Ramallah.
"Not a single penny of this money goes to the Hamas," said Regev. The money is used to pay PA employees working in the Gaza Strip, he added.
However, Shurat Hadin attorney Ro'i Kochavi said that his organization's allegations were not related to these funds but to other transfers by the Bank of Israel and the Postal Authority.
"The transfer of hundreds of millions [dollars' worth] of shekels in cash (bills and coins) to the Gaza Strip has continued since the Hamas takeover of Gaza last year," wrote Shurat Hadin. "The money is transferred in armored cars from banks in Judea and Samaria by the Postal Authority and others. Some of the money is used to replace bills that deteriorated [and could not be used] and some to launder money that the Hamas smuggles into the Gaza Strip from Iran via Egypt."
Kochavi told the Post that the Iranian money was delivered in large bills. The armored cars sent by banks with branches in Ramallah and Gaza bring Israeli shekels to the Gaza-Israel border, where they switch loads with armored cars from Gaza carrying the Iranian money, he said.
Kochavi charged that Hamas was using the shekels to pay their armed forces.
Meanwhile, the Iranian money is brought to the banks in the West Bank, where it is sold to the Bank of Israel in return for shekels, he said. The cycle then repeats itself.
In a letter to Kochavi, Merav Batzri, assistant to the legal adviser of the Bank of Israel, wrote that the bank did not know anything about the facts presented in Shurat Hadin's letter. However, it added that "the Bank of Israel also serves as a professional economic adviser to the government of Israel. In this context, it is involved with the relations between banks in Israel and those operating in the areas of the Palestinian Authority. Furthermore, the decision to transfer funds to the Gaza Strip is based on a wide basket of considerations aside from economic considerations, including political, security and others. These are the responsibility of the government rather than the bank."
Attorney Ronen Baharav wrote that "the Postal Bank Company, which provides services to the Postal Authority, is required from time to time to transfer money or cash checks on behalf of recipients living in the Gaza Strip. The bank's activities are carried out with the knowledge of the relevant authorities."
Darshan-Leitner wrote that she was considering petitioning the High Court of Justice, charging that the government was violating the Prohibition of Terrorist Funding Law and the Prohibition against Money Laundering Law.
Source: JPost
Palestinian President Mahmoud Abbas has signed an anti-money laundering decree that could make it harder for Hamas to obtain funds and is also meant to reassure foreign banks that they can do business with their Palestinian counterparts, officials said Saturday.
Hamas officials acknowledged that the new regulations could hamper its cash flow. "This law may have some effect on the movement, but eventually it won't succeed in fulfilling its goal of drying up the financial sources of the Hamas movement," said a spokesman, Sami Abu Zuhri.
No bank will deal directly with Hamas. However, Palestinian officials from Abbas' Fatah movement have alleged that Hamas has made deals with moneychangers and merchants to receive funds from Iran, Arab countries and Islamic charities abroad. Cash is also believed to be smuggled through tunnels into Gaza.
Abbas signed the decree Friday, and it was published in the Palestinian media on Saturday.
Under the new regulations, violators face three to 15 years in prisons and fines of up to 600,000 shekels ($125,000).
Jihad Alwazir, the deputy governor of the Palestine Monetary Fund, said the regulations were put together with the help of the International Monetary Fund and were in line with international standards.
"The prosecutors now have more means at their disposal," Alwazir said of the new regulations. The Palestine Monetary Fund serves as the Palestinians' central bank.
Alwazir said the new rules should reassure foreign banks that they can do business with their Palestinian counterparts without running afoul of U.S. and Israeli counter-terrorism regulations.
Two Israeli banks, Bank Hapoalim and Israel Discount Bank, announced several weeks ago that they were severing their ties with Gaza's banks. The Israeli banks are wary of inadvertently funneling money to Hamas.
http://www.iht.com/articles/ap/2007/10/27/africa/ME-GEN-Palestinians-Money-Laundering.php
Hamas officials acknowledged that the new regulations could hamper its cash flow. "This law may have some effect on the movement, but eventually it won't succeed in fulfilling its goal of drying up the financial sources of the Hamas movement," said a spokesman, Sami Abu Zuhri.
No bank will deal directly with Hamas. However, Palestinian officials from Abbas' Fatah movement have alleged that Hamas has made deals with moneychangers and merchants to receive funds from Iran, Arab countries and Islamic charities abroad. Cash is also believed to be smuggled through tunnels into Gaza.
Abbas signed the decree Friday, and it was published in the Palestinian media on Saturday.
Under the new regulations, violators face three to 15 years in prisons and fines of up to 600,000 shekels ($125,000).
Jihad Alwazir, the deputy governor of the Palestine Monetary Fund, said the regulations were put together with the help of the International Monetary Fund and were in line with international standards.
"The prosecutors now have more means at their disposal," Alwazir said of the new regulations. The Palestine Monetary Fund serves as the Palestinians' central bank.
Alwazir said the new rules should reassure foreign banks that they can do business with their Palestinian counterparts without running afoul of U.S. and Israeli counter-terrorism regulations.
Two Israeli banks, Bank Hapoalim and Israel Discount Bank, announced several weeks ago that they were severing their ties with Gaza's banks. The Israeli banks are wary of inadvertently funneling money to Hamas.
http://www.iht.com/articles/ap/2007/10/27/africa/ME-GEN-Palestinians-Money-Laundering.php
on Friday, May 25, 2012
By Carrie Johnson
Washington Post Staff Writer
Tuesday, November 25, 2008; Page A06
A federal jury in Dallas convicted five men with ties to a prominent Muslim charity of scores of criminal charges yesterday, handing the U.S. government a significant victory in its largest terrorism financing trial.
The verdicts against former leaders of the Texas-based Holy Land Foundation for Relief and Development, once ranked as the country's largest Muslim charitable organization, came only hours after a federal appeals court panel in New York upheld criminal convictions of three men accused of helping plot deadly bombings of two U.S. embassies in Africa.
Together, the developments strengthened the Justice Department's power to choke the sources of funding that help fuel terrorist schemes -- and to use warrantless electronic surveillance to monitor the activities of U.S. citizens suspected of engaging in international conspiracies.
Yet the victories in cases first filed as long as a decade ago underscore the lengthy path through the criminal justice system, which has afforded the government a mixed record in terrorism prosecutions.
Dennis M. Lormel, a former chief of the FBI's terrorist financing operation section, said the guilty verdicts on the 108 charges in the Holy Land trial amounted to a "validation" of the government's approach and encouraged his former colleagues to aggressively pursue similar investigations.
But Lormel said the most critical, practical development may have come in December 2001, when authorities raided the charity's headquarters in Richardson, Tex., and seized its assets.
After the Sept. 11, 2001, terrorist attacks, law enforcement officials accused Holy Land of funneling more than $12 million to the militant Palestinian group Hamas. The original case against Holy Land and its leaders included more than 100 unindicted co-conspirators, a status that several charities challenged as overreaching by the government.
"For many years, the Holy Land Foundation used the guise of charity to raise and funnel millions of dollars to the infrastructure of the Hamas terror organization," said J. Patrick Rowan, assistant attorney general for national security. "This prosecution demonstrates our resolve to ensure that humanitarian relief efforts are not used as a mechanism to disguise and enable support for terrorist groups."
In the course of the trial, defense attorneys argued that prosecutors had wrongfully targeted philanthropically minded people who wanted to support schools and hospitals in Palestinian territories devastated by conflict with Israel. They drew in part on arguments by civil liberties advocates, who maintain that prosecutors sometimes exploit laws designed to crack down on material support to terrorists to criminalize activities protected by the First Amendment.
The Holy Land verdicts come a year after the first case dissolved in a mistrial. The government's record in prosecutions involving the material support of terrorist networks has been checkered, as questions have arisen about the proper use of informants and whether authorities arrested suspects without enough evidence.
This time around, after enduring months of second-guessing after the Holy Land mistrial, government lawyers pared their evidence and limited the number of witnesses they presented to the jury, which deliberated for eight days.
Earlier yesterday, the convictions of three men with ties to al-Qaeda were upheld in New York. They were convicted for their roles in the 1998 bombings of embassy buildings in Kenya and Tanzania. The plots killed 224 people, including a dozen Americans, and injured thousands.
The panel of the U.S. Court of Appeals for the 2nd Circuit, led by Judge José A. Cabranes, unanimously rejected defense claims of insufficient evidence and violations of the Classified Information Procedures Act. Cabranes was joined by Judges Jon O. Newman and Wilfred Feinberg.
The defendants, Mohammed Saddiq Odeh, Mohamed Rashed Daoud al-Owhali and Wadih el-Hage, are serving lengthy prison sentences in a supermax prison facility in Colorado. They were convicted in 2001.
Attorneys for Hage, who had been a close associate of al-Qaeda leader Osama bin Laden, asserted that government investigators improperly collected evidence through wiretaps of his land-based and cellular phones from August 1996 to August 1997. They also argued that federal agents did not secure appropriate warrants to search his apartment in Nairobi. Because Hage is a naturalized U.S. citizen, the defense said, the government should have sought court permission before taking such intrusive steps.
The appeals court panel disagreed, ruling that "we see no merit in this challenge" and finding that the search was "reasonable under the circumstances presented here."
In a conclusion that legal experts say could have implications for other challenges to the Foreign Intelligence Surveillance Act, the panel ruled that U.S. courts could admit evidence obtained through warrantless overseas searches of American citizens, but that the searches must be reasonable under the Fourth Amendment.
"The decision of the Court of Appeals . . . is one further measure of justice for the victims of those attacks," U.S. Attorney Michael J. Garcia said.
Staff researcher Julie Tate contributed to this report.
Source: Washington Post
Washington Post Staff Writer
Tuesday, November 25, 2008; Page A06
A federal jury in Dallas convicted five men with ties to a prominent Muslim charity of scores of criminal charges yesterday, handing the U.S. government a significant victory in its largest terrorism financing trial.
The verdicts against former leaders of the Texas-based Holy Land Foundation for Relief and Development, once ranked as the country's largest Muslim charitable organization, came only hours after a federal appeals court panel in New York upheld criminal convictions of three men accused of helping plot deadly bombings of two U.S. embassies in Africa.
Together, the developments strengthened the Justice Department's power to choke the sources of funding that help fuel terrorist schemes -- and to use warrantless electronic surveillance to monitor the activities of U.S. citizens suspected of engaging in international conspiracies.
Yet the victories in cases first filed as long as a decade ago underscore the lengthy path through the criminal justice system, which has afforded the government a mixed record in terrorism prosecutions.
Dennis M. Lormel, a former chief of the FBI's terrorist financing operation section, said the guilty verdicts on the 108 charges in the Holy Land trial amounted to a "validation" of the government's approach and encouraged his former colleagues to aggressively pursue similar investigations.
But Lormel said the most critical, practical development may have come in December 2001, when authorities raided the charity's headquarters in Richardson, Tex., and seized its assets.
After the Sept. 11, 2001, terrorist attacks, law enforcement officials accused Holy Land of funneling more than $12 million to the militant Palestinian group Hamas. The original case against Holy Land and its leaders included more than 100 unindicted co-conspirators, a status that several charities challenged as overreaching by the government.
"For many years, the Holy Land Foundation used the guise of charity to raise and funnel millions of dollars to the infrastructure of the Hamas terror organization," said J. Patrick Rowan, assistant attorney general for national security. "This prosecution demonstrates our resolve to ensure that humanitarian relief efforts are not used as a mechanism to disguise and enable support for terrorist groups."
In the course of the trial, defense attorneys argued that prosecutors had wrongfully targeted philanthropically minded people who wanted to support schools and hospitals in Palestinian territories devastated by conflict with Israel. They drew in part on arguments by civil liberties advocates, who maintain that prosecutors sometimes exploit laws designed to crack down on material support to terrorists to criminalize activities protected by the First Amendment.
The Holy Land verdicts come a year after the first case dissolved in a mistrial. The government's record in prosecutions involving the material support of terrorist networks has been checkered, as questions have arisen about the proper use of informants and whether authorities arrested suspects without enough evidence.
This time around, after enduring months of second-guessing after the Holy Land mistrial, government lawyers pared their evidence and limited the number of witnesses they presented to the jury, which deliberated for eight days.
Earlier yesterday, the convictions of three men with ties to al-Qaeda were upheld in New York. They were convicted for their roles in the 1998 bombings of embassy buildings in Kenya and Tanzania. The plots killed 224 people, including a dozen Americans, and injured thousands.
The panel of the U.S. Court of Appeals for the 2nd Circuit, led by Judge José A. Cabranes, unanimously rejected defense claims of insufficient evidence and violations of the Classified Information Procedures Act. Cabranes was joined by Judges Jon O. Newman and Wilfred Feinberg.
The defendants, Mohammed Saddiq Odeh, Mohamed Rashed Daoud al-Owhali and Wadih el-Hage, are serving lengthy prison sentences in a supermax prison facility in Colorado. They were convicted in 2001.
Attorneys for Hage, who had been a close associate of al-Qaeda leader Osama bin Laden, asserted that government investigators improperly collected evidence through wiretaps of his land-based and cellular phones from August 1996 to August 1997. They also argued that federal agents did not secure appropriate warrants to search his apartment in Nairobi. Because Hage is a naturalized U.S. citizen, the defense said, the government should have sought court permission before taking such intrusive steps.
The appeals court panel disagreed, ruling that "we see no merit in this challenge" and finding that the search was "reasonable under the circumstances presented here."
In a conclusion that legal experts say could have implications for other challenges to the Foreign Intelligence Surveillance Act, the panel ruled that U.S. courts could admit evidence obtained through warrantless overseas searches of American citizens, but that the searches must be reasonable under the Fourth Amendment.
"The decision of the Court of Appeals . . . is one further measure of justice for the victims of those attacks," U.S. Attorney Michael J. Garcia said.
Staff researcher Julie Tate contributed to this report.
Source: Washington Post
on Saturday, May 19, 2012
Stewart Bell, National Post
A Toronto non-profit group wired more than $3-million to overseas bank accounts, some of them linked to the Tamil Tigers, before it was shut down by the government in June for alleged terrorist financing, says an RCMP report released yesterday.
The report, marked "Secret" but unsealed by order of a Federal Court judge, provides the first detailed look at the banking activities of the World Tamil Movement (WTM), a Toronto-based group accused of bankrolling Sri Lanka's Tamil Tigers guerrillas.
Most of the money, $1.9-million, went to an account at the Bumiputra Commerce Bank in Kuala Lumpur, Malaysia, that the RCMP report says "is utilized as a vehicle to forward money to the LTTE [Liberation Tigers of Tamil Eelam] from Canada."
The 83-page financial report is the fruit of two years of analysis of banking records seized by Canadian anti-terrorism police who are investigating a financial network run by supporters of the Tamil Tigers that allegedly raised money in Canada to buy arms for the guerrillas.
"The bank records seized ... demonstrate that the World Tamil Movement has developed an elaborate machine like entity that moves throughout the Greater Toronto Area collecting funds with extreme proficiency," the police report says.
Stockwell Day, the Public Safety Minister, announced on June 16 that his government had added the WTM to Ottawa's official list of terrorist groups, alongside the likes of Al-Qaeda, Hamas and Hezbollah. The WTM is the first Canadian community group to be listed.
The WTM has denied any involvement in terrorist fundraising and vowed to challenge the government's decision, and at a large outdoor rally in Toronto on July 5, Tamils waved Tamil Tigers flags and endorsed a statement condemning Ottawa's decision to ban the WTM.
The Minister has accused the WTM of transferring money to LTTE bank accounts in Sri Lanka, but the RCMP's Feb. 1, 2008, financial report paints a more detailed picture of a complex network made up of 20 Canadian bank accounts.
Five banks held the accounts: Toronto Dominion, Bank of Nova Scotia, Royal Bank, CIBC and the National Bank of Canada. The Canadian account holders wired money regularly to accounts in Malaysia, Singapore, the United Kingdom and Tamil Tigers-controlled areas of Sri Lanka.
RCMP Corporal Deanna Hill, the author of the police report, wrote that the WTM's financial set-up was "congruent with the money laundering techniques often employed by organized crime groups.
"I also believe that the number of accounts alone demonstrate that the World Tamil Movement has utilized the Canadian banking system to raise funds in a manner that is best suited to financing the terrorist activities of the LTTE."
The Tamil Tigers have been fighting for 25 years for an independent homeland for Sri Lanka's ethnic Tamil minority, which has faced discrimination under the island's Sinhalese majority.
In addition to fighting a conventional guerrilla war, however, the Tigers also employ terrorist tactics, such as suicide bombings and political assassinations, which has landed them on international terrorist lists, Canada's included.
The RCMP began investigating the Tamil Tigers' Canadian fundraising network in 2002, focusing on the WTM's large head office in Toronto and its smaller branch offices in Montreal and Vancouver. Police raided the Toronto and Montreal offices in 2006.
Police seized letters from the Tamil Tigers leadership thanking Canada for its donations, explaining how the money had been used to purchase weapons, and asking for more. But much of the police evidence appears to have come from a study of bank accounts held by the WTM and its officers.
The Project Osaluki financial report claims the WTM's most lucrative fundraising method was a pre-authorized payment program, in which the group persuaded hundreds of its supporters to sign forms allowing money to be withdrawn from their bank accounts each month.
The WTM took in up to $763,000 a year using the payment scheme. On a single day in 2005, the WTM withdrew $63,528 from 1,582 bank accounts. "It is obvious from the amounts collected with this method that the pre-authorized payment scheme is effective, timely and spares valued resources," says the RCMP report.
Most of the forms had been signed in Canada but police also interviewed witnesses who said they had signed them at Tamil Tigers checkpoints in Sri Lanka. "Upon their return to Canada, these persons were visited by representatives of the World Tamil Movement to exact the collection of the monthly stipend," Cpl. Hill wrote.
In addition, the WTM made money through bake sales, car washes, newspaper sales, merchandise sales and festivals, the report says. "To date, the total amount of Canadian dollars that have been forwarded to accounts internationally from accounts controlled by the World Tamil Movement in Canada is $3,101,803.33."
Source: National Post
A Toronto non-profit group wired more than $3-million to overseas bank accounts, some of them linked to the Tamil Tigers, before it was shut down by the government in June for alleged terrorist financing, says an RCMP report released yesterday.
The report, marked "Secret" but unsealed by order of a Federal Court judge, provides the first detailed look at the banking activities of the World Tamil Movement (WTM), a Toronto-based group accused of bankrolling Sri Lanka's Tamil Tigers guerrillas.
Most of the money, $1.9-million, went to an account at the Bumiputra Commerce Bank in Kuala Lumpur, Malaysia, that the RCMP report says "is utilized as a vehicle to forward money to the LTTE [Liberation Tigers of Tamil Eelam] from Canada."
The 83-page financial report is the fruit of two years of analysis of banking records seized by Canadian anti-terrorism police who are investigating a financial network run by supporters of the Tamil Tigers that allegedly raised money in Canada to buy arms for the guerrillas.
"The bank records seized ... demonstrate that the World Tamil Movement has developed an elaborate machine like entity that moves throughout the Greater Toronto Area collecting funds with extreme proficiency," the police report says.
Stockwell Day, the Public Safety Minister, announced on June 16 that his government had added the WTM to Ottawa's official list of terrorist groups, alongside the likes of Al-Qaeda, Hamas and Hezbollah. The WTM is the first Canadian community group to be listed.
The WTM has denied any involvement in terrorist fundraising and vowed to challenge the government's decision, and at a large outdoor rally in Toronto on July 5, Tamils waved Tamil Tigers flags and endorsed a statement condemning Ottawa's decision to ban the WTM.
The Minister has accused the WTM of transferring money to LTTE bank accounts in Sri Lanka, but the RCMP's Feb. 1, 2008, financial report paints a more detailed picture of a complex network made up of 20 Canadian bank accounts.
Five banks held the accounts: Toronto Dominion, Bank of Nova Scotia, Royal Bank, CIBC and the National Bank of Canada. The Canadian account holders wired money regularly to accounts in Malaysia, Singapore, the United Kingdom and Tamil Tigers-controlled areas of Sri Lanka.
RCMP Corporal Deanna Hill, the author of the police report, wrote that the WTM's financial set-up was "congruent with the money laundering techniques often employed by organized crime groups.
"I also believe that the number of accounts alone demonstrate that the World Tamil Movement has utilized the Canadian banking system to raise funds in a manner that is best suited to financing the terrorist activities of the LTTE."
The Tamil Tigers have been fighting for 25 years for an independent homeland for Sri Lanka's ethnic Tamil minority, which has faced discrimination under the island's Sinhalese majority.
In addition to fighting a conventional guerrilla war, however, the Tigers also employ terrorist tactics, such as suicide bombings and political assassinations, which has landed them on international terrorist lists, Canada's included.
The RCMP began investigating the Tamil Tigers' Canadian fundraising network in 2002, focusing on the WTM's large head office in Toronto and its smaller branch offices in Montreal and Vancouver. Police raided the Toronto and Montreal offices in 2006.
Police seized letters from the Tamil Tigers leadership thanking Canada for its donations, explaining how the money had been used to purchase weapons, and asking for more. But much of the police evidence appears to have come from a study of bank accounts held by the WTM and its officers.
The Project Osaluki financial report claims the WTM's most lucrative fundraising method was a pre-authorized payment program, in which the group persuaded hundreds of its supporters to sign forms allowing money to be withdrawn from their bank accounts each month.
The WTM took in up to $763,000 a year using the payment scheme. On a single day in 2005, the WTM withdrew $63,528 from 1,582 bank accounts. "It is obvious from the amounts collected with this method that the pre-authorized payment scheme is effective, timely and spares valued resources," says the RCMP report.
Most of the forms had been signed in Canada but police also interviewed witnesses who said they had signed them at Tamil Tigers checkpoints in Sri Lanka. "Upon their return to Canada, these persons were visited by representatives of the World Tamil Movement to exact the collection of the monthly stipend," Cpl. Hill wrote.
In addition, the WTM made money through bake sales, car washes, newspaper sales, merchandise sales and festivals, the report says. "To date, the total amount of Canadian dollars that have been forwarded to accounts internationally from accounts controlled by the World Tamil Movement in Canada is $3,101,803.33."
Source: National Post
on Thursday, May 17, 2012
By Avi Issacharoff
Hamas has dramatically reduced its money transfers to various charitable organizations in the West Bank formerly linked to the group, as the Palestinian Authority continues to assert its control over those organizations.
Hamas had used the charities to transfer money to its operatives in the West Bank and to strengthen its standing among the Palestinian public. Since the beginning of this year, the PA has systematically installed new managements at the charities, which then transferred the organizations' assets to the PA itself.
In addition, the PA has appointed religious leaders affiliated with the Ramallah government to the Waqf Islamic religious trust, which was previously run by clerics identified with the Muslim Brotherhood, Hamas' parent movement. This leadership change has forced Hamas to stem the flow of money to the charities it once funded.
The global economic downturn has also slowed the money flow, as major donors in the Persian Gulf have transferred smaller amounts into Hamas' coffers. Tighter Israeli supervision of the charities and more familiarity with Hamas' money-laundering techniques also played a role in the reduction.
In addition, Palestinian security services recently seized several million shekels destined for Hamas-affiliated social services organizations.
Source: Haaretz
Hamas has dramatically reduced its money transfers to various charitable organizations in the West Bank formerly linked to the group, as the Palestinian Authority continues to assert its control over those organizations.
Hamas had used the charities to transfer money to its operatives in the West Bank and to strengthen its standing among the Palestinian public. Since the beginning of this year, the PA has systematically installed new managements at the charities, which then transferred the organizations' assets to the PA itself.
In addition, the PA has appointed religious leaders affiliated with the Ramallah government to the Waqf Islamic religious trust, which was previously run by clerics identified with the Muslim Brotherhood, Hamas' parent movement. This leadership change has forced Hamas to stem the flow of money to the charities it once funded.
The global economic downturn has also slowed the money flow, as major donors in the Persian Gulf have transferred smaller amounts into Hamas' coffers. Tighter Israeli supervision of the charities and more familiarity with Hamas' money-laundering techniques also played a role in the reduction.
In addition, Palestinian security services recently seized several million shekels destined for Hamas-affiliated social services organizations.
Source: Haaretz
on Monday, May 14, 2012
U.S. clamps down on banking transactions; terror group finds new funding
By Robert Windrem and Garrett Haake
NBC News
Seven years after the Sept. 11 attacks, U.S. intelligence officials believe they've won many small victories against al-Qaida's ability to finance its operations, but they remain unable to put a concrete dollar figure on their impact.
That's because they have no reliable estimate of al-Qaida's overall budget, according to current and former U.S. counterterrorism officials, which means the only measures of the organization's economic health are sporadic, anecdotal and fragmentary.
"When you see a cell complaining that it hasn't received its monthly or biannual stipend and it's unable to pay the salaries of the people in the cell, unable to make the support payments to the families of terrorists living or dead, that's a tremendous indicator we have pressured the financial channel," said Adam Szubin, the director of the U.S. Treasury's Office of Foreign Assets Control and the man in charge of tracking terrorist finance.
Intelligence agencies scan phone conversations, e-mails, fax transmissions and instant message traffic for hints they have thwarted the flow of money to al-Qaida and other jihadist groups. But they are unable to get a firmer grasp on the overall state of terrorist finances, in part, because of the nature of most operations.
"Terrorism is unfortunately not a rich man's sport," said a former OFAC official, meaning that it does not take a lot of money to carry out a major attack. Tracking those small numbers in the vast sea of global financial transactions is difficult.
Cost differentials
An NBC News analysis of attacks by al-Qaida and other Sunni extremist groups shows that only one cost as much as $500,000 — the Sept. 11, 2001, attacks on the United States. But others, like the 2005 attack on the London transit system or the 2000 attack on the USS Cole in Yemen, cost less than $15,000 to carry out.
At the bottom end of the scale, the simplest first-generation suicide bombs constructed by the Palestinian Islamist group Hamas, consisting of duffle bags filled with black powder from unexploded Israeli land mines and ignition switches from abandoned cars, cost no more than $200.
The money also is difficult to track because terrorists do not use the world financial system as extensively as they once did, due partly to U.S. success in cracking down on it.
"Part of it is that the U.S. is sitting on the international banking system," said Roger Cressey, deputy counter terrorism chief in the Clinton and Bush administrations and now an NBC News analyst.
The United States has sponsored a U.N. terrorism funding blacklist, which requires all member states to freeze the assets and impose an international travel ban on people and entities placed on the list.
No one wants to be placed on the U.N. list of 503 people and entities or OFAC's 404-page list of "Specially Designated Nationals," a voluminous compilation of everyone from Cuban tourist agents to Osama bin Laden. Officials said they have intelligence — gathered from electronic eavesdropping — of prospective donors expressing concern about giving money to a charity or other entity that's been listed.
"You'll hear them say 'I'm not giving money anymore to X, they've been listed'," said one official.
Lately, cracks have developed in the list, as legal challenges mount and political support drops, especially in Europe. But Szubin believes the splits are overblown and that European allies will succeed in maintaining the system.
Figure 'totally made up'
Despite the anecdotal successes Szubin cites, U.S. estimates of al-Qaida's budget are rife with problems, according to Richard Clarke, former boss of the White House counterterrorism office.
In 2003, the United States estimated that al-Qaida's budget before the Sept. 11 attacks was $35 million and that it fell to $5 million just two years after the attacks. Those numbers were repeated in the final report of the 9/11 Commission.
"That number was totally made up, totally made up," Clarke said of the $35 million figure.
Clarke explained the figure was based on limited real information. "I don't think there is an integrated budget. In U.S. business parlance, there are 'cost centers', but not an integrated budget," he said.
Even the most cited official measure, OFAC's annual tally of blocked al-Qaida assets, is by Szubin's own admission irrelevant to understanding the state of terrorist financing and the success of U.S. efforts.
OFAC's most recent report, issued in early October, lists $11.324 million in blocked al-Qaida assets, predominantly financial instruments. That number is up from $7.7 million the year before, mainly due to an increase in the number of people and organizations designated by Treasury as terrorists.
"Some have mistakenly drawn on figures of blocked assets as we summarized in our report," Szubin said. "There is a hunger for data and these are numbers, but we try to put a major caveat there and say we don't view these numbers as an indicator of the pressure we're putting on terrorist groups."
Clarke said the best indicator, beyond real-time intelligence gathering, is often the data found in laptops, documents, notebooks and calendars taken after a successful raid or arrest.
"When they do get a cell, you can grab financial documents and do an analysis, go back and find out how they moved their money and then move in on them," Clarke said.
That way, he said, you get a sense of what means they are using to move money and then can try to stanch the flow in the future. But because of al-Qaida's compartmentalization, it doesn't provide a good picture of the organization's financial health.
Turn to crime for funding
One thing analysts are sure about is that al-Qaida and other terrorism organizations are continuing to get money from somewhere, even if many of the international channels have been closed. Officials believe one of the biggest sources of money is simply "self funding," making money off legitimate businesses or crime.
"One pattern we've seen in southern Europe is counterfeiting, not of currency, but goods, travel documents, a skill you would expect a jihadi cell to have," Szubin said.
U.S. intelligence also has seen jihadis engaged in carjackings and theft. In North Africa, they are making a lot of money off the drug trade, not as primary suppliers or movers, but extorting suppliers or moves. "They will take a cut," Szubin said.
Source: NBC
By Robert Windrem and Garrett Haake
NBC News
Seven years after the Sept. 11 attacks, U.S. intelligence officials believe they've won many small victories against al-Qaida's ability to finance its operations, but they remain unable to put a concrete dollar figure on their impact.
That's because they have no reliable estimate of al-Qaida's overall budget, according to current and former U.S. counterterrorism officials, which means the only measures of the organization's economic health are sporadic, anecdotal and fragmentary.
"When you see a cell complaining that it hasn't received its monthly or biannual stipend and it's unable to pay the salaries of the people in the cell, unable to make the support payments to the families of terrorists living or dead, that's a tremendous indicator we have pressured the financial channel," said Adam Szubin, the director of the U.S. Treasury's Office of Foreign Assets Control and the man in charge of tracking terrorist finance.
Intelligence agencies scan phone conversations, e-mails, fax transmissions and instant message traffic for hints they have thwarted the flow of money to al-Qaida and other jihadist groups. But they are unable to get a firmer grasp on the overall state of terrorist finances, in part, because of the nature of most operations.
"Terrorism is unfortunately not a rich man's sport," said a former OFAC official, meaning that it does not take a lot of money to carry out a major attack. Tracking those small numbers in the vast sea of global financial transactions is difficult.
Cost differentials
An NBC News analysis of attacks by al-Qaida and other Sunni extremist groups shows that only one cost as much as $500,000 — the Sept. 11, 2001, attacks on the United States. But others, like the 2005 attack on the London transit system or the 2000 attack on the USS Cole in Yemen, cost less than $15,000 to carry out.
At the bottom end of the scale, the simplest first-generation suicide bombs constructed by the Palestinian Islamist group Hamas, consisting of duffle bags filled with black powder from unexploded Israeli land mines and ignition switches from abandoned cars, cost no more than $200.
The money also is difficult to track because terrorists do not use the world financial system as extensively as they once did, due partly to U.S. success in cracking down on it.
"Part of it is that the U.S. is sitting on the international banking system," said Roger Cressey, deputy counter terrorism chief in the Clinton and Bush administrations and now an NBC News analyst.
The United States has sponsored a U.N. terrorism funding blacklist, which requires all member states to freeze the assets and impose an international travel ban on people and entities placed on the list.
No one wants to be placed on the U.N. list of 503 people and entities or OFAC's 404-page list of "Specially Designated Nationals," a voluminous compilation of everyone from Cuban tourist agents to Osama bin Laden. Officials said they have intelligence — gathered from electronic eavesdropping — of prospective donors expressing concern about giving money to a charity or other entity that's been listed.
"You'll hear them say 'I'm not giving money anymore to X, they've been listed'," said one official.
Lately, cracks have developed in the list, as legal challenges mount and political support drops, especially in Europe. But Szubin believes the splits are overblown and that European allies will succeed in maintaining the system.
Figure 'totally made up'
Despite the anecdotal successes Szubin cites, U.S. estimates of al-Qaida's budget are rife with problems, according to Richard Clarke, former boss of the White House counterterrorism office.
In 2003, the United States estimated that al-Qaida's budget before the Sept. 11 attacks was $35 million and that it fell to $5 million just two years after the attacks. Those numbers were repeated in the final report of the 9/11 Commission.
"That number was totally made up, totally made up," Clarke said of the $35 million figure.
Clarke explained the figure was based on limited real information. "I don't think there is an integrated budget. In U.S. business parlance, there are 'cost centers', but not an integrated budget," he said.
Even the most cited official measure, OFAC's annual tally of blocked al-Qaida assets, is by Szubin's own admission irrelevant to understanding the state of terrorist financing and the success of U.S. efforts.
OFAC's most recent report, issued in early October, lists $11.324 million in blocked al-Qaida assets, predominantly financial instruments. That number is up from $7.7 million the year before, mainly due to an increase in the number of people and organizations designated by Treasury as terrorists.
"Some have mistakenly drawn on figures of blocked assets as we summarized in our report," Szubin said. "There is a hunger for data and these are numbers, but we try to put a major caveat there and say we don't view these numbers as an indicator of the pressure we're putting on terrorist groups."
Clarke said the best indicator, beyond real-time intelligence gathering, is often the data found in laptops, documents, notebooks and calendars taken after a successful raid or arrest.
"When they do get a cell, you can grab financial documents and do an analysis, go back and find out how they moved their money and then move in on them," Clarke said.
That way, he said, you get a sense of what means they are using to move money and then can try to stanch the flow in the future. But because of al-Qaida's compartmentalization, it doesn't provide a good picture of the organization's financial health.
Turn to crime for funding
One thing analysts are sure about is that al-Qaida and other terrorism organizations are continuing to get money from somewhere, even if many of the international channels have been closed. Officials believe one of the biggest sources of money is simply "self funding," making money off legitimate businesses or crime.
"One pattern we've seen in southern Europe is counterfeiting, not of currency, but goods, travel documents, a skill you would expect a jihadi cell to have," Szubin said.
U.S. intelligence also has seen jihadis engaged in carjackings and theft. In North Africa, they are making a lot of money off the drug trade, not as primary suppliers or movers, but extorting suppliers or moves. "They will take a cut," Szubin said.
Source: NBC
on Sunday, May 13, 2012
A group of Americans subjected to attacks in Israel have sued UBS AG, claiming
the Swiss bank helped 'militants' by providing cash to Iran.
Some 50 US citizens hurt, along with the relatives of those killed, in attacks in Israel during 1997-2006, demanded that the Swiss bank UBS AG pay them more than $500 million in compensation.
In to the lawsuit filed Friday in New York, they claimed that since 1996, Iran provided 'millions of cash annually to Hezbollah and Hamas to carry out attacks'.
Robert Tolchin, lawyer of plaintiffs, claimed that without the money, 'their ability to carry out attacks ... would have been severely limited and crippled'.
UBS has cut its business with all of its clients in Iran since 2006.
The US' claims that Iran is funding Hamas and Hezbollah are widely seen as part of the US-led psychological operations to demonize Tehran.
The US efforts to control or undermine Iran are long-standing and are rooted in Iran's historic role as the most important power in the Middle East, able to contend with US domination in the region.
Over recent years, the US has tried to pit Iran against other regional countries by claiming that Iran is providing arms to Hamas and Hezbollah -- charges vehemently denied by Tehran which insists it provides moral support to the resistance movements.
This is while the Paris-based Financial Action Task Force (FATF) Watchdog said in an April statement, "Since its October 2007 plenary meeting, the FATF has engaged with Iran and welcomes the commitment made by the country to improve its Anti-Money Laundering/Combating the Financing of Terrorism measures."
http://www.presstv.ir/detail.aspx?id=55443§ionid=351020101
on Monday, May 7, 2012
Under Secretary for Terrorism and Financial Intelligence Stuart Levey announced Thursday that the Treasury Department has revoked Iran's U-turn license, further restricting Iran's access to the U.S. financial system. Prior to this action, U.S. financial institutions were authorized to process certain funds transfers for the direct or indirect benefit of Iran, provided such payments were initiated offshore by a non-Iranian financial institution and only passed through the U.S. financial system en route to another non-Iranian financial institution. Treasury's move follows a series of U.S. government actions to expose Iranian banks' involvement in the Iranian regime's support to terrorist groups and nuclear and missile proliferation.
November 6, 2008
HP-1258
Fact Sheet: Treasury Strengthens Preventive Measures Against Iran
On October 16, the Financial Action Task Force (FATF), which has members representing 32 jurisdictions and is the world's premier standard-setting body for anti-money laundering and counter-terrorist financing (AML/CFT), warned for the fourth time about the risks posed to the international financial system by continuing deficiencies in Iran's AML/CFT regime. The FATF called for all countries to strengthen preventive measures to protect their financial systems from this risk. Additionally, the UN Security Council called upon all states in March 2008 to exercise vigilance over the activities of financial institutions in their territories with all Iranian banks.
Consistent with these multilateral calls for action, the Treasury Department is revoking the "U-turn" general license today to protect
The Treasury Department is taking a range of measures, including today's action, to counter these deceptive activities. The Treasury Department encourages all jurisdictions to adopt robust preventive measures consistent with the FATF warnings and relevant UN Security Council Resolutions (UNSCRs).
➢ Bank Sepah.
➢ Bank Melli.
➢ Bank Mellat.
➢ Export Development Bank of
International Focus on Proliferation Risks Associated with Iranian Financial Institutions. The role that Iranian financial institutions play in Iranian proliferation activities is underscored by UNSCR 1803, which was adopted in March 2008 and calls upon states to exercise vigilance over the activities of their financial institutions with all Iranian banks. The FATF issued guidance in October 2008 to assist countries in implementing this provision. That guidance recommends that jurisdictions encourage their financial institutions to take strong preventive measures for the mitigation of risks posed by Iranian banks, including refusing to process transactions involving Iranian banks when full information regarding the parties to the transaction is unavailable. The FATF guidance also recommends that jurisdictions encourage their financial institutions to reassess, and if necessary, terminate correspondent relationships with Iranian banks, and take steps to satisfy themselves that their correspondent relationships with non-Iranian financial institutions are not used to circumvent the risk-mitigation practices in place for Iranian banks.
Iranian Commercial Banks. It has been a standard practice for Iranian financial institutions to conceal their identity to evade detection when conducting transactions. For example, Bank Sepah has requested that its name be removed from transactions in order to make it more difficult for intermediary financial institutions to determine the true parties to a transaction. Following the designation of Bank Sepah under UNSCR 1747, Bank Melli took precautions not to identify Bank Sepah in transactions. Bank Melli also has employed similar deceptive practices to obscure its involvement from the international banking system when handling financial transactions on behalf of the IRGC. In addition, when Iranian assets were targeted in Europe, branches of Iranian state-owned banks in
Central Bank of
Use of Front Companies and Misuse of Bank Accounts.
Use of Money Service Business Accounts.
Effect of the Revocation of U-Turn License
OFAC has revoked the authorization of "U-turn" transfers for the direct or indirect benefit of Iran, through an amendment of the Iranian Transactions Regulations, 31 CFR part 560, to narrow the scope of existing 560.516. This action affects the "U-turn" class of funds transfers, which are so named because, while they are conducted on behalf of Iranian account holders and banks or in connection with Iran-related transactions, they only pass through the U.S. financial system on their way from one offshore non-Iranian financial institution to another.
As a result of today's action,
Allowable Transactions
Today's action will not affect funds transfers by U.S. depository institutions, through intermediary third-country banks, to or from Iran or for the direct or indirect benefit of the Government of Iran or a person in Iran arising from several types of underlying transactions including:
- A non-commercial remittance to or from
- The exportation to
- A travel-related remittance;
- Payment for the shipment of a donation of articles to relieve human suffering; or
- An underlying transaction authorized by OFAC through a specific or general license. Allowable funds transfers would include, for example, payments arising from over-flights of Iranian airspace, legal services, intellectual property protection, and authorized sales of agricultural products, medicine, and medical devices to
Treasury Revokes Iran's U-Turn License
Washington,
Treasury's move today follows a series of
Prior to today's action, U.S. financial institutions were authorized to process certain funds transfers for the direct or indirect benefit of Iranian banks, other persons in Iran or the Government of Iran, provided such payments were initiated offshore by a non-Iranian, non-U.S. financial institution and only passed through the U.S. financial system en route to another offshore, non-Iranian, non-U.S. financial institution. As a result of today's action,
The Treasury Department previously designated Iranian state-owned banks Melli, Mellat, Sepah, Future Bank and the Export Development Bank of Iran for their roles in Iran's weapons proliferation activities, as well as Bank Saderat for providing support to terrorism. While these banks are already prohibited from taking advantage of the U-turn authorization, today's action ends this exception for all remaining Iranian banks, both state-owned and private, including the Central Bank of Iran.
As a member of the Financial Action Task Force (FATF), the
To ensure that transactions relating to humanitarian aid for the Iranian people and other legitimate activities continue to flow, today's action will not affect funds transfers by
- Payment for the shipment of a donation of articles to relieve human suffering;
- A non-commercial remittance to or from
- The exportation to
- Travel-related remittances; and
- An underlying transaction authorized by Treasury's Office of Foreign Assets Control (OFAC) through a specific or general license.
Allowable funds transfers under specific or general OFAC licenses would include: payments arising from over-flights of Iranian airspace; legal services; intellectual property protection; and authorized sales of agricultural products, medicine, and medical devices to
This action will take effect when the amendment to the regulations is published in the Federal Register on November 10, 2008.
Prepared Remarks of
Under Secretary for Terrorism and Financial Intelligence Stuart Levey
On the Revocation of Iran's U-Turn License
Washington,
Since that time, we have shared information with foreign governments and financial institutions about how
Combined with this outreach, the
At the same time, many private financial institutions and companies worldwide have voluntarily shunned business with
There is now a global consensus that
In the face of all of this,
As members of the FATF, we are fulfilling our obligation to strengthen measures to protect our financial sector from those risks. Therefore, today we are revoking the "U-turn" license for
In recent months, many
We encourage all countries, both FATF members and others, to take action to protect the integrity of their financial systems from
Today's action is not aimed at the innocent people of
To ensure that we can continue to help the Iranian people, today's action does not affect otherwise permissible payments such as for shipments of food and medicine, family remittances, and the export of informational materials to Iran, among others.
The Iranian regime's policies have ensured
on Saturday, May 5, 2012
By Morton Saulo
Victims of terrorist attacks on American embassies in Africa have filed a $40 billion lawsuit against the Republic of Sudan and the Islamic Republic of Iran for their complicity in the attack.
Mr Gavriel Mairone, counsel for the victims, announced that a lawsuit was filed on Tuesday in Federal District Court in Washington DC, on behalf of over 270 employees of the US government (and their family members) that were killed or seriously injured in the Al Qaeda suicide bombings against American embassies in Nairobi, Kenya and Dar Es Salaam, Tanzania.
On August 7, 1998, Al Qaeda perpetrated simultaneous suicide truck bombings on both embassies, killing 247 people and injuring more than 5,000.
Act amended
In January 2008, the US Federal Sovereign Immunity Act was amended to strip states supporting terrorism of immunity and grant employees and contractors of the United States government (in addition to US citizens) the right to sue in US federal court such states for damages resulting from terrorist attacks perpetrated anywhere in the world.
For the first time, survivors and family members of US government employees killed and maimed in the US Embassy bombings in Africa became eligible to seek compensation from the Republic of Sudan and the Islamic Republic of Iran in US federal court.
In December 2004, Mann & Mairone, together with other attorneys, filed an historic, multi-billion dollar lawsuit in US Federal court in New York against Arab Bank on behalf of over 2,000 victims of terrorist attacks perpetrated by Hamas, Palestinian Islamic Jihad, Al Aqsa Martyr Brigades and the Popular Democratic Front for the Liberation of Palestine.
Subsequent to the filing of this lawsuit, the US government fined Arab Bank more than $20 million in connection with money laundering and terrorist financing.
Source: The Standard
Victims of terrorist attacks on American embassies in Africa have filed a $40 billion lawsuit against the Republic of Sudan and the Islamic Republic of Iran for their complicity in the attack.
Mr Gavriel Mairone, counsel for the victims, announced that a lawsuit was filed on Tuesday in Federal District Court in Washington DC, on behalf of over 270 employees of the US government (and their family members) that were killed or seriously injured in the Al Qaeda suicide bombings against American embassies in Nairobi, Kenya and Dar Es Salaam, Tanzania.
On August 7, 1998, Al Qaeda perpetrated simultaneous suicide truck bombings on both embassies, killing 247 people and injuring more than 5,000.
Act amended
In January 2008, the US Federal Sovereign Immunity Act was amended to strip states supporting terrorism of immunity and grant employees and contractors of the United States government (in addition to US citizens) the right to sue in US federal court such states for damages resulting from terrorist attacks perpetrated anywhere in the world.
For the first time, survivors and family members of US government employees killed and maimed in the US Embassy bombings in Africa became eligible to seek compensation from the Republic of Sudan and the Islamic Republic of Iran in US federal court.
In December 2004, Mann & Mairone, together with other attorneys, filed an historic, multi-billion dollar lawsuit in US Federal court in New York against Arab Bank on behalf of over 2,000 victims of terrorist attacks perpetrated by Hamas, Palestinian Islamic Jihad, Al Aqsa Martyr Brigades and the Popular Democratic Front for the Liberation of Palestine.
Subsequent to the filing of this lawsuit, the US government fined Arab Bank more than $20 million in connection with money laundering and terrorist financing.
Source: The Standard
on Friday, May 4, 2012
Friday, 04 January 2008
by William Fisher
The government’s spotty record in obtaining convictions of people charged with providing “material support” to terrorist organizations is adding new impetus to the efforts of prominent constitutional lawyers to seek substantial changes in the law.
The latest failure in a terrorism-financing prosecution came late in 2007, when a Texas jury failed to render any guilty verdicts in the trial of the Holy Land Foundation (HLF) – once the largest and most prominent charity dedicated to supporting Palestinian and other Muslim causes. Several HLF officials were charged with giving money to Hamas, the militant Palestinian organization designated a terrorist group by the U.S. in 1995. The trial ended with a mix of acquittals and deadlocks.
The Federal Bureau of Investigation started looking into HLF in 1993. In December 2001, the U.S. Treasury Department (DOT) seized and confiscated the charity’s assets and records, effectively putting the organization out of business. Given that outcome, some legal scholars have questioned why the government pursued a criminal prosecution at all. The trial did not begin until mid-2007.
William Neal, a juror in the HLF case, told the media that the government’s evidence “was pieced together over the course of a decade — a phone call this year, a message another year.” Instead of trying to prove that the defendants knew they were supporting terrorists, Mr. Neal said, prosecutors “danced around the wire transfers by showing us videos of little kids in bomb belts and people singing about Hamas, things that didn’t directly relate to the case.”
Civil liberties groups say the HLF case was just the latest in a line of misguided prosecutions. One such group, OMB Watch, charges that the USA Patriot Act gives the government “largely unchecked power to designate any group as a terrorist organization.” It says that “once a charitable organization is so designated, all of its materials and property may be seized and its assets frozen. The charity is unable to see the government’s evidence and thus understand the basis for the charges. Since its assets are frozen, it lacks resources to mount a defense. And it has only limited right of appeal to the courts. So the government can target a charity, seize its assets, shut it down, obtain indictments against its leaders, but then delay a trial almost indefinitely.”
One result, say critics of the government’s policy, is that Muslim charities have experienced a precipitous decline in contributions. Contributions that do arrive often come in cash from anonymous givers. And donors who happen to be Muslim are increasingly turning to the large household names like Oxfam and Save the Children, which may conduct programs in predominantly Muslim areas abroad.
One of America’s foremost constitutional scholars, Prof. David Cole of the Georgetown University Law Center, argues that the “material support principle is ‘guilt by association’ in 21st-century garb, and presents all of the same problems that criminalizing membership and association did during the Cold War.” He told us that the problem requires fundamental changes in the terrorism-financing law.
Included in Cole’s recommendations for major changes:
1. The Treasury Department should be required to permit closed charities to direct their collected funds to charities mutually approved by the frozen charity and the government.
2. Congress should enact a statutory definition of a "specially designated terrorist." “Right now the Treasury Department makes such designations entirely on the basis of an Executive Order, and accordingly Congress has given the President essentially a blank check,” Cole told us.
3. Treasury should allow designated entities to use their own funds to pay for their own defense. “Treasury not only shuts down charities in a secretive one-sided process, but then bars the charities from using any of their own money to defend themselves against the designation,” according to Cole.
4. The criminal material support statutes should be amended to require proof that an individual supported a proscribed group with the intent to further its illegal activities. “Today,” according to the government, “even aid intended to discourage terrorist activities is a crime under the material support laws,” Cole says.
He adds, “There is no requirement that the aid have any connection to terrorism,” and cites a case he is handling with the Humanitarian Law Project (HLP) at the Center for Constitutional Rights (CCR).
He told us, “My clients had been providing human rights advocacy training to the PKK in Turkey, as a way of encouraging them to use peaceful lawful means to resolve their disputes with the Turkish government over its treatment of the Kurdish minority. By encouraging lawful outlets for dispute resolution, such aid would presumably discourage terrorism. Yet under the material support statute it is a crime even if HLP could prove that both the purpose and the effect of their support was to decrease the PKK's resort to violence.”
OMB Watch says the “material support” effort has resulted in the government shutting down charities that were not on any government watch list before their assets were frozen.
The organization says the result is that Muslims have no way of knowing which groups the government suspects of ties to terrorism. “Organizations and individuals suspected of supporting terrorism are guilty until proven innocent,” it says.
OMB Watch told us, “A group could comply 100% and still be shut down ‘pending an investigation’."
Material-support cases are just a small fraction of the Justice Department’s terrorism prosecutions, but some observers believe they represent a shift in government strategy from punishment to prevention. Earlier prosecutions were for acts of violence that actually took place. Examples include the first World Trade Center attack, the 1998 bombings of American embassies in Africa, and conspiracies that were relatively close to fruition.
Nonetheless, government terror-financing prosecutions have been reasonably successful. From the Sept. 11 attacks to last July, the government started 108 material-support prosecutions and completed 62. Juries convicted nine defendants, 30 defendants pleaded guilty, and 11 pleaded guilty to other charges. There were eight acquittals and four dismissals.
In terrorism prosecutions involving a violent act actually committed or near fruition, the government’s record is spottier. According to the Center on Law and Security at the New York University School of Law, the government has a 29 percent conviction rate in terrorism prosecutions overall, compared with 92 percent for felonies generally.
The latest government setback involves the so-called Liberty City Seven – seven men named for the blighted Miami district where they allegedly operated. Charged with plotting to join forces with al-Qaeda to blow up Chicago's Sears Tower, one was acquitted last month and a mistrial was declared for the six others after the federal jury deadlocked.
Prosecutors acknowledged that no attack was imminent, and then-Attorney General Alberto Gonzales said after the arrests in mid-2006 that the alleged terror cell was ''more aspirational than operational.''
In some cases, defendants are arguably convicted of terror-related offenses in the court of public opinion rather than in the courts. One example often cited by lawyers is the case of Dr. Rafil Dhafir, an Iraqi-born American citizen, who organized and raised money for a charity providing humanitarian relief to children in Iraq. He was never charged in court with a terrorist-related offense; the word “terrorism” was not allowed to be used in his trial, although prominent politicians such as then-New York Governor George Pataki hailed his arrest as a victory in the war on terror.
The upstate New York oncologist was sentenced to 22 years in jail in 2005 for 59 felony charges, including violating U.S. sanctions against Iraq.
http://www.atlanticfreepress.com/content/view/3179/32/
by William Fisher
The government’s spotty record in obtaining convictions of people charged with providing “material support” to terrorist organizations is adding new impetus to the efforts of prominent constitutional lawyers to seek substantial changes in the law.
The latest failure in a terrorism-financing prosecution came late in 2007, when a Texas jury failed to render any guilty verdicts in the trial of the Holy Land Foundation (HLF) – once the largest and most prominent charity dedicated to supporting Palestinian and other Muslim causes. Several HLF officials were charged with giving money to Hamas, the militant Palestinian organization designated a terrorist group by the U.S. in 1995. The trial ended with a mix of acquittals and deadlocks.
The Federal Bureau of Investigation started looking into HLF in 1993. In December 2001, the U.S. Treasury Department (DOT) seized and confiscated the charity’s assets and records, effectively putting the organization out of business. Given that outcome, some legal scholars have questioned why the government pursued a criminal prosecution at all. The trial did not begin until mid-2007.
William Neal, a juror in the HLF case, told the media that the government’s evidence “was pieced together over the course of a decade — a phone call this year, a message another year.” Instead of trying to prove that the defendants knew they were supporting terrorists, Mr. Neal said, prosecutors “danced around the wire transfers by showing us videos of little kids in bomb belts and people singing about Hamas, things that didn’t directly relate to the case.”
Civil liberties groups say the HLF case was just the latest in a line of misguided prosecutions. One such group, OMB Watch, charges that the USA Patriot Act gives the government “largely unchecked power to designate any group as a terrorist organization.” It says that “once a charitable organization is so designated, all of its materials and property may be seized and its assets frozen. The charity is unable to see the government’s evidence and thus understand the basis for the charges. Since its assets are frozen, it lacks resources to mount a defense. And it has only limited right of appeal to the courts. So the government can target a charity, seize its assets, shut it down, obtain indictments against its leaders, but then delay a trial almost indefinitely.”
One result, say critics of the government’s policy, is that Muslim charities have experienced a precipitous decline in contributions. Contributions that do arrive often come in cash from anonymous givers. And donors who happen to be Muslim are increasingly turning to the large household names like Oxfam and Save the Children, which may conduct programs in predominantly Muslim areas abroad.
One of America’s foremost constitutional scholars, Prof. David Cole of the Georgetown University Law Center, argues that the “material support principle is ‘guilt by association’ in 21st-century garb, and presents all of the same problems that criminalizing membership and association did during the Cold War.” He told us that the problem requires fundamental changes in the terrorism-financing law.
Included in Cole’s recommendations for major changes:
1. The Treasury Department should be required to permit closed charities to direct their collected funds to charities mutually approved by the frozen charity and the government.
2. Congress should enact a statutory definition of a "specially designated terrorist." “Right now the Treasury Department makes such designations entirely on the basis of an Executive Order, and accordingly Congress has given the President essentially a blank check,” Cole told us.
3. Treasury should allow designated entities to use their own funds to pay for their own defense. “Treasury not only shuts down charities in a secretive one-sided process, but then bars the charities from using any of their own money to defend themselves against the designation,” according to Cole.
4. The criminal material support statutes should be amended to require proof that an individual supported a proscribed group with the intent to further its illegal activities. “Today,” according to the government, “even aid intended to discourage terrorist activities is a crime under the material support laws,” Cole says.
He adds, “There is no requirement that the aid have any connection to terrorism,” and cites a case he is handling with the Humanitarian Law Project (HLP) at the Center for Constitutional Rights (CCR).
He told us, “My clients had been providing human rights advocacy training to the PKK in Turkey, as a way of encouraging them to use peaceful lawful means to resolve their disputes with the Turkish government over its treatment of the Kurdish minority. By encouraging lawful outlets for dispute resolution, such aid would presumably discourage terrorism. Yet under the material support statute it is a crime even if HLP could prove that both the purpose and the effect of their support was to decrease the PKK's resort to violence.”
OMB Watch says the “material support” effort has resulted in the government shutting down charities that were not on any government watch list before their assets were frozen.
The organization says the result is that Muslims have no way of knowing which groups the government suspects of ties to terrorism. “Organizations and individuals suspected of supporting terrorism are guilty until proven innocent,” it says.
OMB Watch told us, “A group could comply 100% and still be shut down ‘pending an investigation’."
Material-support cases are just a small fraction of the Justice Department’s terrorism prosecutions, but some observers believe they represent a shift in government strategy from punishment to prevention. Earlier prosecutions were for acts of violence that actually took place. Examples include the first World Trade Center attack, the 1998 bombings of American embassies in Africa, and conspiracies that were relatively close to fruition.
Nonetheless, government terror-financing prosecutions have been reasonably successful. From the Sept. 11 attacks to last July, the government started 108 material-support prosecutions and completed 62. Juries convicted nine defendants, 30 defendants pleaded guilty, and 11 pleaded guilty to other charges. There were eight acquittals and four dismissals.
In terrorism prosecutions involving a violent act actually committed or near fruition, the government’s record is spottier. According to the Center on Law and Security at the New York University School of Law, the government has a 29 percent conviction rate in terrorism prosecutions overall, compared with 92 percent for felonies generally.
The latest government setback involves the so-called Liberty City Seven – seven men named for the blighted Miami district where they allegedly operated. Charged with plotting to join forces with al-Qaeda to blow up Chicago's Sears Tower, one was acquitted last month and a mistrial was declared for the six others after the federal jury deadlocked.
Prosecutors acknowledged that no attack was imminent, and then-Attorney General Alberto Gonzales said after the arrests in mid-2006 that the alleged terror cell was ''more aspirational than operational.''
In some cases, defendants are arguably convicted of terror-related offenses in the court of public opinion rather than in the courts. One example often cited by lawyers is the case of Dr. Rafil Dhafir, an Iraqi-born American citizen, who organized and raised money for a charity providing humanitarian relief to children in Iraq. He was never charged in court with a terrorist-related offense; the word “terrorism” was not allowed to be used in his trial, although prominent politicians such as then-New York Governor George Pataki hailed his arrest as a victory in the war on terror.
The upstate New York oncologist was sentenced to 22 years in jail in 2005 for 59 felony charges, including violating U.S. sanctions against Iraq.
http://www.atlanticfreepress.com/content/view/3179/32/
on Thursday, May 3, 2012
A Palestinian official says Palestinian security forces in the West Bank seized $2.2 million in cash from Hamas in August.
The official says the money was taken in a crackdown on money laundering by the Islamic militants. He says that in one such scheme, Hamas uses West Bank traders importing goods from China. The official spoke Wednesday on condition of anonymity because he is not authorized to release details of the crackdown.
The West Bank government of Palestinian President Mahmoud Abbas has been going after Hamas since the Islamic militants seized control of Gaza in June 2007. Abbas' security forces have arrested scores of Hamas militants and closed Hamas-linked institutions. Israel has carried out a parallel campaign against Hamas.
Source: International Herald Tribune
The official says the money was taken in a crackdown on money laundering by the Islamic militants. He says that in one such scheme, Hamas uses West Bank traders importing goods from China. The official spoke Wednesday on condition of anonymity because he is not authorized to release details of the crackdown.
The West Bank government of Palestinian President Mahmoud Abbas has been going after Hamas since the Islamic militants seized control of Gaza in June 2007. Abbas' security forces have arrested scores of Hamas militants and closed Hamas-linked institutions. Israel has carried out a parallel campaign against Hamas.
Source: International Herald Tribune
on Tuesday, May 1, 2012
A new report from the Republican staff of the House Homeland Security Committee says federal and state governments, especially New York's, must do more to combat cigarette smuggling because its profits fund terrorist entities abroad.
"Recent law enforcement investigations ... have directly linked those involved in illicit tobacco trade to infamous terrorist organizations such as Hezbollah, Hamas, and al Qaeda," states the report.
The disparity between state taxation of tobacco products along with the discounted prices to certain populations, such as Native Americans, garner cigarette smugglers huge profits.
"For example, a pack of cigarettes that costs $8 in New York and New Jersey will only cost $4 in 'tobacco states' like Virginia and North Carolina," the report explains. "The profit on a standard diverted load of 1,500 contraband cartons [of cigarettes] could be as high as $60,000."
Sometimes smugglers purchase cartons of cigarettes directly from tribal smoke shops because these shops are immune from state taxes applied to cigarette sales. For instance, a smuggler can buy a carton of cigarettes from a reservation smoke shop for $30 where in New York City the retail price for that same carton is $67.
New York state law enforcement officials estimate that a well-run cigarette smuggling operation can make $200,000 to $300,000 a week. "A large percentage of the money is believed to be sent back to the Middle East, where it directly or indirectly finances groups such as Hezbollah, Hamas, and al Qaeda," the report says.
Arab-Americans, the report says, have a corner on the cigarette smuggling market in New York where "tight-knit, nationality-based networks, primarily families through blood or marriage of Lebanese, Yemeni, Jordanian, and Palestinian descent" rely on Arab-owned convenience markets to peddle their contraband cigarettes. According to the report, 60 percent of all convenience stores are now Arab-owned in the state. The ethnic and familial character of the networks make it hard for law enforcement to penetrate these networks.
And as recent prosecutions have revealed, cigarette smuggling flourishes and has been linked to terrorist financing.
A Charlotte, North Caroline, cigarette smuggling ring led by Mohamad Hammoud exploited the $.50 sales tax on a carton of cigarettes in North Carolina by shipping cartons to Michigan, where the sales tax is $7.50 per carton. The criminal enterprise racked up $8 million dollars in four years. Law enforcement officials believe Hammoud sent $100,000 of his earnings to Hezbollah by the time he was arrested in 2000.
Demonstrating the reservation nexus to Arab American cigarette smuggling and terrorist financing, two women from the Seneca Nation of Indians' Cattaraugus reservation in New York were sentenced in 2003 for their role in supplying tax-free cigarettes to Hezbollah-linked smugglers in Dearborn, Michigan. The smuggling ring's leader, Lebanese-born Elias Mohamad, had direct ties to the Shiite terrorist organization, prosecutors argued.
In 2004, Aref Ahmed was convicted of conspiracy to commit money laundering and smuggling contraband cigarettes. He has also popped up in the case of the "Lackawanna Seven" where he reportedly paid for their travel from Buffalo, New York, to Afghanistan for terrorist training.
The report also charges that while the link between reservation cigarette smuggling and terrorist financing is clear, New York state has looked the other way and in the process "created a safe haven for illicit smuggling networks."
Quoting a New York State Department of Health report, the committee's Republican staff state that the state loses between $436 million and $576 million in taxes to the sale of illicit cigarettes. Nevertheless, New York state ignores this, the report charges, "despite the fact that these illicit profits are leaving the state and being sent overseas to Jordan and Lebanon, among other countries."
If the Empire State does not crack down on cigarette smuggling starting beginning with tax-free cigarettes sold off reservations, the report argues, it will not only jeopardize state tax revenue but "our continued security."
Source: Chappyreport
"Recent law enforcement investigations ... have directly linked those involved in illicit tobacco trade to infamous terrorist organizations such as Hezbollah, Hamas, and al Qaeda," states the report.
The disparity between state taxation of tobacco products along with the discounted prices to certain populations, such as Native Americans, garner cigarette smugglers huge profits.
"For example, a pack of cigarettes that costs $8 in New York and New Jersey will only cost $4 in 'tobacco states' like Virginia and North Carolina," the report explains. "The profit on a standard diverted load of 1,500 contraband cartons [of cigarettes] could be as high as $60,000."
Sometimes smugglers purchase cartons of cigarettes directly from tribal smoke shops because these shops are immune from state taxes applied to cigarette sales. For instance, a smuggler can buy a carton of cigarettes from a reservation smoke shop for $30 where in New York City the retail price for that same carton is $67.
New York state law enforcement officials estimate that a well-run cigarette smuggling operation can make $200,000 to $300,000 a week. "A large percentage of the money is believed to be sent back to the Middle East, where it directly or indirectly finances groups such as Hezbollah, Hamas, and al Qaeda," the report says.
Arab-Americans, the report says, have a corner on the cigarette smuggling market in New York where "tight-knit, nationality-based networks, primarily families through blood or marriage of Lebanese, Yemeni, Jordanian, and Palestinian descent" rely on Arab-owned convenience markets to peddle their contraband cigarettes. According to the report, 60 percent of all convenience stores are now Arab-owned in the state. The ethnic and familial character of the networks make it hard for law enforcement to penetrate these networks.
And as recent prosecutions have revealed, cigarette smuggling flourishes and has been linked to terrorist financing.
A Charlotte, North Caroline, cigarette smuggling ring led by Mohamad Hammoud exploited the $.50 sales tax on a carton of cigarettes in North Carolina by shipping cartons to Michigan, where the sales tax is $7.50 per carton. The criminal enterprise racked up $8 million dollars in four years. Law enforcement officials believe Hammoud sent $100,000 of his earnings to Hezbollah by the time he was arrested in 2000.
Demonstrating the reservation nexus to Arab American cigarette smuggling and terrorist financing, two women from the Seneca Nation of Indians' Cattaraugus reservation in New York were sentenced in 2003 for their role in supplying tax-free cigarettes to Hezbollah-linked smugglers in Dearborn, Michigan. The smuggling ring's leader, Lebanese-born Elias Mohamad, had direct ties to the Shiite terrorist organization, prosecutors argued.
In 2004, Aref Ahmed was convicted of conspiracy to commit money laundering and smuggling contraband cigarettes. He has also popped up in the case of the "Lackawanna Seven" where he reportedly paid for their travel from Buffalo, New York, to Afghanistan for terrorist training.
The report also charges that while the link between reservation cigarette smuggling and terrorist financing is clear, New York state has looked the other way and in the process "created a safe haven for illicit smuggling networks."
Quoting a New York State Department of Health report, the committee's Republican staff state that the state loses between $436 million and $576 million in taxes to the sale of illicit cigarettes. Nevertheless, New York state ignores this, the report charges, "despite the fact that these illicit profits are leaving the state and being sent overseas to Jordan and Lebanon, among other countries."
If the Empire State does not crack down on cigarette smuggling starting beginning with tax-free cigarettes sold off reservations, the report argues, it will not only jeopardize state tax revenue but "our continued security."
Source: Chappyreport
on Sunday, February 12, 2012
As many of you know, I joined the Department of the Treasury this spring from private law practice, where I worked with many of you in building anti-money laundering and sanctions compliance programs and grappling with the often difficult legal, regulatory and prudential questions that arise in running those programs. Before that, I worked in Treasury's Office of General Counsel, and was part of Treasury's efforts in the late 1990s to internationalize our anti-money laundering laws. Along with my Treasury colleagues at the time, we drafted and sought to elicit Congressional interest in legislation that, after 9/11, formed the core of the AML provisions in Title III of the USA PATRIOT Act. So, I come here this afternoon with some understanding of, and appreciation for, the pressures you are under and the challenges you face. I also have a few ideas I would like to share with you about how we can work together on some very pressing issues – most importantly, disrupting the flow of funds derived from criminal activity, including possibly international organized crime, to terrorist organizations.
I would like to begin by briefly describing the scope of my responsibilities as Assistant Secretary for Terrorist Financing. First of all, do not let my title fool you – although I am the Assistant Secretary for Terrorist Financing, I am firmly against terrorist financing. The statute creating my office, which gives me my title, also charges me with "formulating and coordinating the counter terrorist financing and anti-money laundering efforts of the Department of the Treasury." In practice, this means that my colleagues and I in the Office of Terrorist Financing and Financial Crimes are focused on developing policy to combat all manner of illicit finance at home and abroad – from mortgage fraud to money laundering, from transactions facilitating WMD proliferation to those funding terrorists. This places my Office squarely in the middle of the national security issues and regulatory policy discussions that directly affect how you do your business and measure your risk. And it reinforces for me the point – which I understood while in private practice, but has been driven home to me since I returned to the Treasury Department – that the success of our policy to combat illicit finance is highly dependent on the quality of your efforts to comply with your AML/CFT legal and regulatory obligations.
Let me give you a few examples. For several years, the Treasury Department's Office of Terrorism and Financial Intelligence, led by Under Secretary Stuart Levey, has played a central role in the United States Government's efforts to prevent Iran from developing nuclear weapons and to combat Iran's support to international terrorist groups. As you know, the Obama Administration is pursuing a two-track strategy with Iran. This strategy is aimed at resolving international concerns over Iran's nuclear program diplomatically, while also making clear to the Iranian government that it faces increased isolation and pressure if it does not adequately resolve those concerns. We at Treasury have been especially focused on the second piece of the two-track strategy, working intensively to craft a plan for imposing additional pressure if the President determines it is appropriate to do so. While I cannot go into specifics, I can say that in the event that Iran's actions make it necessary to implement this plan, it seems quite likely that we will turn to you to help ensure the effective implementation of any financial, investment or trade-related measures that are imposed.
We are also focused on the difficult situation in Mexico, where President Felipe Calderon has undertaken a courageous fight against the drug cartels. The flow of drug proceeds and weapons across our southwest border is fueling violence in Mexico, and the criminal activity that it supports threatens the security of both Mexico and the United States.
At President Obama's direction, the entire United States Government is working very closely with our Mexican counterparts to combat the drug cartels. For its part, Treasury is taking a comprehensive approach to countering the illicit financial activity that fuels the drug trade and, more generally, supports the international criminal networks that are behind much of the violence. We are helping Mexico strengthen its laws and build the institutional capacity to execute those laws, and we are working with the Mexicans in joint task forces to exploit shared information and take coordinated action.
As many of you know very well, we are also using the Foreign Narcotics Kingpin Designation Act to identify significant drug traffickers in Mexico and expose and disrupt their financial networks. Over the last decade, the President has named 37 top-level – or "Tier I" – Mexican narco-traffickers, and Treasury's Office of Foreign Assets Control has followed up by designating over 250 individuals and entities tied to these Mexican traffickers. Recently, the President imposed Kingpin Act sanctions on three major Mexican narcotics organizations: the Sinaloa Cartel, Los Zetas and La Familia Michoacana. Again, your efforts to implement these sanctions, as well as your continuing efforts to detect, deter and deny drug traffickers access to the financial system, is critical to our strategy to combat this menace.
One last example. Working closely with Ambassador Richard Holbrooke, the State Department's Special Representative for Afghanistan and Pakistan, Treasury is deeply involved in the effort to deny financial support to the Taliban, al Qaida, the Haqqani network, Lashkar-e-Tayibba and other terrorist groups that are active in that region. The Treasury Department leads an interagency task force whose mission is to coordinate and enhance our actions to disrupt the terrorists' and insurgents' financial support networks while, at the same time, spurring the development of a well-regulated financial sector in Afghanistan and Pakistan. We oversee working groups focused on a diverse array of issues, ranging from improving the United States' engagement with our Persian Gulf allies to stem the flow of donations to the Taliban and other terrorist groups, to working with the Afghan and Pakistani governments to facilitate the development of mobile banking in both countries.
Now, when I mention sanctions against Iranian banks, or our anti-money laundering efforts aimed at drug traffickers' proceeds, I expect that you readily understand how a robust AML/CFT compliance program can contribute. Well-designed and well-implemented compliance programs protect your financial institutions from abuse, legal liability and reputational harm. Effective compliance programs also lead to the detection and reporting of valuable information that helps us identify illicit activity, target our enforcement resources and tailor our policies.
But it is also true that well-designed and well-implemented compliance programs contribute meaningfully in our drive to disrupt the funding channels for the Taliban, al Qaida and other terrorist groups. And some recent trends relating to how terrorist groups finance their deadly work have created new and significant opportunities for the private sector to make an even more substantial contribution to our mutual efforts to combat the financing of terrorism around the world. I would like to spend a few minutes explaining why this is so.
Over the past several years, working with our colleagues in law enforcement, we have achieved some real success in choking off the facilitation networks that link individual donors and terrorist organizations. Employing our authorities under Executive Order 13224, the Treasury Department has designated several organizations in the United States for funneling money to terrorists groups, including the al Qaida network, HAMAS and Hizballah. We have also designated a large number of foreign entities and individuals for financing terrorist organizations around the world, including donors, fundraisers and facilitators.
These targeted financial measures, used alongside other national security and law enforcement tools, have had a significant disruptive impact on terrorist financing networks, and not only with respect to the specific targeted or "designated" individuals and entities. By disrupting certain key financing nodes, we achieve the collateral benefit of interfering with the entire terrorist network's ability to move money. This degrades their ability to finance recruitment and training, and to plan and execute attacks.
Furthermore, our designations are a powerful deterrent to other would-be financiers. We may not be able to deter someone who, for ideological reasons, is committed to conducting a terrorist attack. But donors and facilitators are different. They may have transnational business dealings, property in the United States or other interests that require access to the international financial and commercial systems. Many see themselves as upstanding members of society. Being identified as a terrorist financier directly threatens those interests, and the fear of designation deters their conduct.
Steps taken by the private sector, moreover, have been an important force multiplier in combating illicit finance, including terrorist financing. Many foreign financial institutions voluntarily use our designation lists in their filtering software and policies and procedures because they have no interest in doing business with individuals and entities we have designated. These foreign financial institutions – just like the institutions represented here today – do not want to risk their reputations or their financial relationships with U.S. institutions by even inadvertently facilitating illicit business.
Al Qaida's current financial predicament represents one good measure of the success of these coordinated strategies. In the first six months of this year, al Qaida's leaders made four public appeals for money, including one in June of this year, when an al Qaida leader announced that a lack of funding was hurting the group's recruitment and training. We assess that al Qaida is in its weakest financial condition in several years, and that, as a result, its influence is waning.
This success is important. It is a sign that we are moving in the right direction. But let me be clear: We are not taking any victory laps – not even close – for several reasons. First, we know that there continues to exist a pool of donors who are ready, willing and able to contribute to al Qaida. We have, at least temporarily, disrupted some of the most significant facilitation networks between these donors and al Qaida. But we have not yet dissuaded nearly enough donors from wanting to give in the first place. To do so will require increased assistance from our partners in the Persian Gulf, Southeast Asia and elsewhere, in working with us in a sustained effort to counter radicalization.
Second, many other terrorist organizations – most prominently, the Taliban – are in much stronger financial shape than al Qaida. These other organizations continue to pose serious threats to US interests around the world.
And third, terrorist organizations, including parts of the al Qaida network, appear to be increasingly turning to conventional criminal activity to finance their operations. Due, in part, to the success we have had in disrupting their traditional funding sources, terrorist organizations' reliance on crime to finance their operations appears to be expanding. To be sure, this shift has presented some new and difficult challenges, but it also has created new opportunities that we – working together – can exploit. Simply put, to the extent that terrorist organizations increasingly turn to traditional criminal conduct to finance their activities, their funding networks become increasingly vulnerable to detection by well-designed, well-implemented, and well-funded AML/CFT programs.
Now, we know that terrorist organizations' use of crime to finance their violence is not a new phenomenon. In fact, the first material support for terrorism case to be tried to a jury in the United States involved the proceeds of a cigarette smuggling ring run by Hizballah operatives. A recent RAND study on Film Piracy, Organized Crime and Terrorism contains an entire section discussing Hizballah's expanding reliance on pirated music, movies and computer software to generate revenue.
Similarly, it is well known that the FARC, a designated Foreign Terrorist Organization, relies on drug trafficking, kidnapping for ransom and extortion schemes to raise money to fund its insurgency against the Colombian government.
We also know that historically some al Qaida cells have financed their activities through street crime, such as robberies and burglary, drug trafficking and bank fraud. In 2007, for example, British authorities arrested a 22-year-old man and accused him of supporting al Qaida in Iraq through a credit card fraud scheme, in which he had allegedly sold stolen credit card numbers online and purchased goods for fighters with the proceeds.
And in Afghanistan today, the Taliban finances attacks against U.S. and coalition forces through a wide range of criminal activity. It extorts funds from those involved in the heroin trade by demanding "protection" payments from poppy farmers, drug lab operators, and the smugglers who transport the chemicals in to, and the heroin out of, the country. It also demands protection payments from legitimate businesses seeking to operate in Afghanistan, especially in the southern and eastern regions of the country. You can be assured that some of the money it extorts moves out of the country and into the international financial system.
Moreover, as terrorist groups increasingly reveal a willingness to engage in criminal activities to raise funds, the risk that they will collaborate with international criminal organizations increases. Organized criminal enterprises, as we know, distort economic markets, undermine the rule of law in developing countries, compromise regulatory standards, place financial institutions at risk, and make it difficult for law-abiding businesses to compete. These enterprises seek to acquire wealth, influence and power by engaging in such illicit activity as counterfeiting, human trafficking, arms trafficking and drug trafficking.
Although these purely profit-driven criminal organizations are typically indifferent to the political and operational goals of terrorist groups, their willingness to take advantage of money-making opportunities could readily lead them to facilitate the activities of terrorists. We know that these criminal enterprises are more than willing to exploit the institutions they have corrupted – often through bribery or intimidation – and the distribution networks they have developed, for a wide variety of illicit activity. Their expertise in manufacturing, smuggling and distributing one type of contraband can be easily transferred – and increasingly is transferred – to other types of contraband and illicit activity. For example, it has become clear that Mexican criminal groups are no longer simply smuggling drugs. To increase their profits, they have offered up their smuggling routes and financial infrastructure to support such illicit activities as weapons trafficking and human trafficking.
Of course, international criminal organizations are harmful in their own right. In their wake, they leave corrupted financial institutions, insecure borders and broken bureaucracies. These weakened states, in turn, can become transit points for contraband or cash, and may themselves fall prey to exploitation by terrorist groups, as the state is no longer able to assert effective control over its own territory.
For these and other reasons, combating international criminal organizations has long been a priority for the Government, and still is. But the willingness of these criminal enterprises to allow terrorist groups to use their infrastructures poses a different, and even greater risk.
So what is the significance of terrorists' apparent increasing reliance on traditional criminal activity to generate funds, and the potential nexus between transnational organized crime and terrorist networks? As I mentioned earlier, I believe these developments create an opportunity for us, working together, to more effectively detect, disrupt and dismantle terrorist financing networks.
Financial institutions have long noted – with some justification – that terrorist financing can be very difficult to detect unless the Government provides a designation list or some other specific information about the individuals and front companies that are involved. It is the classic conundrum created by the fact that terrorist financing often involves good money being put to bad use, rather than bad money trying to find its way into the formal financial system without revealing its illicit source.
But the increasing use of financial crime by terrorist organizations to fund their activities places financial institutions in a much stronger position to detect terrorist financing, and to provide valuable information to the government to help us disrupt financing networks. Financial institutions have decades of experience in detecting and preventing money laundering and illicit activity. Your systems are tuned to detect the large movements of cash associated with cash-intensive crimes, such as drug trafficking or weapons trafficking. Your monitoring and reporting also provides us with valuable information about suspicious wire transfers and other transactions that are often indicative of the placement, layering and integration phases of the laundering cycle. And your "know your customer" procedures and due diligence practices provide you with the ability to avoid taking on problematic clients, and to monitor effectively the financial behavior of the clients you do have to ensure their activity is consistent with the purposes and profiles of their relationships with you. Indeed, with the advent of new technologies and ever more sophisticated programmatic infrastructures, you have become increasingly adept at all of these tasks.
As a result of the terrorist financing trends I have described, there is now a greater opportunity for you to provide us with actionable information that permits us to understand better how terrorist networks form, raise revenue and move their money. Although the suspicious transactions you detect in your financial institution may be several steps removed from a terrorist act, the information you provide is analyzed to protect against international terrorism. What may appear to be routine suspicious activity relating to criminal conduct – whether it be fraud, counterfeiting, or money laundering – could also be the critical piece of information necessary to map out a terrorist network. In short, because of the changing nature of terrorist financing, your hard work in preventing illicit transactions from flowing through your institutions is all the more crucial in our efforts to protect our national security.
Thank you for your time today, and, more importantly, thank you for everything you do to protect your financial institutions and our country. I look forward to working with you in the years to come.
Source: US Treasury - Press Room
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