Outcomes of the Joint Plenary meeting of the FATF and GAFISUD, Mexico City, 22-24 June 2011

Under the Mexican Presidency, the first joint FATF-GAFISUD Plenary meeting was held in Mexico City on 22-24 June 2011. The meeting was co-chaired by the FATF and GAFISUD Presidents.

FATF Decisions

The FATF took important new steps to protect the international financial system from abuse by:

• Producing two public documents as part of its ongoing work to identify jurisdictions that may pose a risk to the international financial system:
• FATF Public Statement on jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies.
• Improving Global AML/CFT Compliance: on-going process - Jurisdictions with strategic AML/CFT deficiencies for which they have developed an action plan with the FATF

• Issuing a statement on the progress made by Argentina in addressing deficiencies identified in its mutual evaluation of October 2010.

• Adopting the mutual evaluation reports of the State of Kuwait and the Sultanate of Oman.

• Publishing a detailed examination of Organised Maritime Piracy and Related Kidnapping for Ransom, Trafficking in Human Beings and Smuggling of Migrants and Money Laundering and Corruption.

• Publishing Guidance on Financial Inclusion.

• Continuing its work on revision of the FATF Recommendations and preparation for the fourth round of mutual evaluations.

AML/CFT improvements in Greece

The FATF welcomes Greece’s significant progress in improving its AML/CFT regime and notes that Greece has met its commitments in its Action Plan regarding the strategic AML/CFT deficiencies that the FATF had identified in February 2010. Greece is therefore no longer subject to monitoring under the FATF’s ongoing global AML/CFT compliance process. Greece will continue to work with the FATF to further strengthen its AML/CFT regime.

Statement on the progress made by Argentina

The FATF heard Argentina´s report on progress made since its first follow-up report presented in February 2011 and recognised the important legislative efforts aimed at improving the criminalisation of money laundering. Based on the initial analysis of the recent legal amendments, the FATF expressed some specific concerns that there are still shortcomings in the criminalisation of money laundering, and further clarification is required. Substantial progress to improve the criminalisation of terrorist financing has not yet taken place, and there are a large number of other AML/CFT deficiencies remaining. The FATF remains seriously concerned about the risks that such deficiencies may pose, as identified in “Improving Global AML/CFT Compliance: on-going process”, and will continue to review progress, in the context of measures that the FATF has agreed to follow under its enhanced follow-up procedures for members insufficiently in compliance with the FATF Recommendations.

The FATF expects more substantial progress by Argentina by October 2011. In particular, the FATF expects Argentina to fully address the FATF´s concerns regarding the criminalisation of money laundering in accordance with international standards, present to the FATF a draft law criminalising terrorist financing in accordance with international standards, and inform about the progress in addressing the other AML/CFT deficiencies. As part of this discussion, the FATF reaffirmed the responsibility of all members to observe a high level of compliance with the FATF Recommendations in an expedited manner.

Mutual Evaluation of the State of Kuwait and the Sultanate of Oman

The FATF discussed and adopted two mutual evaluation reports assessing the compliance of two Gulf Cooperation Council members, the State of Kuwait and the Sultanate of Oman against the international standards for combating money laundering and terrorist financing – the 40+9 Recommendations.

Summaries of these mutual evaluations will soon be available on the FATF website, and the full reports will be released in the coming weeks.

There is currently no evidence of significant money laundering and no major terrorist activity has been recorded in the State of Kuwait. However, Kuwait’s financial sector is growing rapidly and thus may create a potential environment for such activities. The assessment team for this evaluation, composed of staff of the International Monetary Fund (IMF), concluded that the Kuwaiti AML/CFT framework had some deficiencies: terrorist financing is currently not criminalised, the money laundering offence does not cover all serious predicate offences, the Kuwaiti financial intelligence unit (KFIU) has not been established as an independent agency carrying out all core functions set out by the FATF standards, and there are shortcomings in the AML/CFT supervisory framework for some financial institutions and designated non-financial businesses and professions (DNFBPs).

The evaluation of the AML/CFT regime of the Sultanate of Oman was conducted jointly by the FATF and the Middle East and North Africa Financial Action Task Force (MENAFATF). The level of compliance with the FATF Recommendations for the AML/CFT regime of Oman is comparatively high for the region, and the legal framework is generally sound. However, the Omani AML/CFT Law was only recently updated, and executive regulations must still be issued. In addition, the overall effectiveness is generally lacking, parts of the terrorist financing legal framework need to be improved and the number of money laundering cases needs to be significantly raised.

With the adoption of the mutual evaluation reports of the State of Kuwait and the Sultanate of Oman, the FATF concluded its third round of mutual evaluations that started in 2005 and comprised 35 FATF jurisdictions and five members of the Gulf Cooperation Council.

Organised Maritime Piracy and Related Kidnapping for Ransom

In recent years, there has been a growing concern over organised piracy on the high seas and kidnapping for ransom. These activities present a number of a potential risks to the international financial system and challenges to the law enforcement and regulatory framework worldwide. The FATF has completed a study that provides an overview of this problem and analyses the related money flows to the extent that this is possible. In addition to informing the work of other international bodies dealing with this issue, the report, which will be published shortly, will also serve as a useful source of general information on the subject.

Human Being Trafficking and Smuggling of Migrants

Criminals are increasingly turning to the trafficking of human beings and the smuggling of migrants given the high profitability of these illegal activities. The money generated by such activities finds its way into the financial system. The FATF has carried out a study which describes the money flows related to these two distinct problems and attempts to assess their scale. The report, which will be published shortly, provides a series of red-flag indicators for the various destination / origin countries and different sectors to help financial institutions to better detect related suspicious financial activity.

Money Laundering and Corruption

Corruption continues to be a significant public policy issue throughout the world, and for that reason work related to anti-corruption was identified as an objective under the Mexican Presidency. In the larger framework of its work on corruption, the FATF has prepared a study on the links between corruption and money laundering. The report, which will be published shortly, identifies key vulnerabilities within the current AML/CFT framework and discusses some of the obstacles to the recovery of corruption. In addition to providing the basis for further examination of related issues, the report will serve as the catalyst for future FATF work in developing guidance or best practices on AML/CFT measures relevant to combating corruption. The FATF will continue to work on issues related to the use of AML/CFT tools in the fight against corruption.

Guidance on Financial Inclusion

Financial inclusion is an important policy objective for many countries, and the implementation of AML/CFT measures should not become an impediment to financial inclusion. However, an overly cautious approach to AML/CFT safeguards could have the unintended consequence of excluding legitimate business and consumers from the financial system. In collaboration with the World Bank and the Asia Pacific Group on Money Laundering (APG) and in consideration of the objectives set by the Mexican Presidency, the FATF has completed work on guidance that will help in developing AML/CFT measures that are in line with financial inclusion goals without compromising the overall purpose of combating crime. In providing this guidance, the FATF is contributing to the common objective of the G20 in this area as agreed at the Seoul Summit of November 2010. The FATF will continue to strive to ensure that the objectives of financial inclusion and AML/CFT are complementary. The report will be available on the FATF website shortly.

Revision of the FATF Recommendations and Preparation for the Fourth Round of Mutual Evaluations

The FATF continues its work to revise the FATF Recommendations to ensure that they will continue to provide a comprehensive set of means to combat money laundering and terrorist financing, and to build on the experience of the 3rd round of mutual evaluations. The FATF is committed to a constructive engagement with all stakeholders, and is issuing a second public consultation document (pdf, 438 Kb) on a range of issues where changes to the Standards are being considered. This covers important issues such as:

• Clarifying beneficial ownership requirements (Recommendations 5, 33 and 34)
• Ensuring no inconsistency between AML/CFT and data protection / privacy requirements
• Creating an obligation for group wide compliance programmes for financial groups
• Enhancing international cooperation (Recommendation 40)
• Promoting a risk based approach to supervision
• Strengthening measures in relation to politically exposed persons
• Enhancing the transparency of wire transfers
• Implementing targeted financial sanctions in the context of terrorist financing and proliferation financing
• Strengthening and clarifying the requirements for financial intelligence units and law enforcement authorities

The President of the FATF, Mr. Luis Urrutia, thanked the FATF members for their decisive support to achieve the objectives set at the outset of his tenure and wished the new President, Mr. Giancarlo del Bufalo of Italy, and the new Vice-President, M. Bjorn Skogstag AAMO of Norway, Godspeed.

Luis Urrutia Corral

FATF President

IMF warns Kuwait on money laundering risk

Kuwait needs to tighten its anti-money laundering rules or risk its growing financial sector being exploited by criminals, the IMF has warned.

Smuggling to and from neighbouring Iraq, fraud and corruption are among the main money laundering crimes identified by authorities to date, the organisation, based in Washington, said in a report.

At present, there is no evidence of significant money laundering in the country, it said.

But the IMF said criminal risks increased as the financial sector expanded, fuelled by increasing oil revenue and higher government spending, and would increase further if plans to create an international financial centre were realised.

"These developments have the potential of creating a suitable environment for money launderers seeking to exploit the Kuwaiti financial sector to exercise their illegitimate activities," it said.

Kuwait trailed other GCC states in Transparency International's Corruption Perceptions Index last year, ranking 54th out of 180 countries. In 2003, it was 35th on the index.

The country has been battling against corruption in government and industry in recent years. Members of parliament last month discussed allegations that two MPs had received frequent cash payments into their bank accounts from unknown sources. Siemens uncovered evidence of corruption at its business in Kuwait, the German conglomerate said in June.

A major problem in Kuwait, the IMF noted, was insufficient anti-money laundering rules. A law introduced in 2002 did not criminalise the financing of terrorism and did not put in place a means of enforcing UN Security Council resolutions, it said.

A new draft anti-money laundering law has yet to be agreed on, despite being sent before the national assembly in 2007. In addition, preventative measures safeguarding financial firms from money laundering were not comprehensive, the IMF said.

Kuwait's finance sector, one of the pillars of the country's non-oil economy, is recovering from heavy losses linked to the global downturn. Gulf Bank required a government bailout and the investment industry underwent a hefty shake-up after several investment companies started to default on financial obligations.

tarnold@thenational.ae

Source: The National

FBI agents in town help fight cross-border crime

By Marie Magleby, Special to Gulf News

Published: May 31, 2008, 23:44

Abu Dhabi: Gary Price and Ernest Herbert carry FBI badges, but their job descriptions are significantly different here than in the US.

"I have no law enforcement authority here," Special Agent Price said.

Instead, the duo are go-betweens for local and US law enforcement. He said, "We work closely with UAE government officials to share information that protects the two countries."

They also offer training at the request of local authorities. The training involves many aspects of law enforcement, including ways to combat white-collar crime, violent crime, forensics and counter-terrorism.

In addition, the agents coordinate the Middle East Law Enforcement Training Centre in Dubai, which offers week-long courses for law enforcement personnel from around the Gulf.

Local authorities choose the topics and dates, and FBI specialists come from the US to teach the courses. Since its establishment in 2001, the centre, co-sponsored by the FBI and Dubai police, has conducted about 40 courses dealing with money laundering, computer crimes, intellectual property rights, kidnapping, auto theft, homicide, financial institution fraud, terrorist financing, hostage negotiations and more.

The globalisation of crime, especially financial and internet crime, places the agents in a pivotal position. "The UAE is an important crossroads for business and, as a result, also for crime," Price said of the potential for fraud or abuse in the banking system. With the help of local officials, they routinely seek to investigate bank records and track financial transactions linked to the US.

When internet crime is traced back to the US, the agents are also able to help. Just months ago, a prominent UAE citizen received a cyber threat from a location in the US.

Local law enforcement officials contacted Price and Herbert, who enlisted agents in the US to conduct an investigation. The man was arrested, charged and is now facing imprisonment.

About working with local authorities, Price said: "I truly enjoy working with the Emiratis. They are professional and very gracious." There are, however, obstacles. According to Price, a federal law that regulates "international judicial cooperation" is often misinterpreted to be a roadblock to investigations. "There is not a timely, quick way for law enforcement response because of the bureaucratic process," he said.

Law enforcement mechanisms do not always translate across cultures and borders, Herbert said in a similar vein. "Things are run differently here than in the US, so we have to do things differently."

When FBI agents are on international assignment, they assume the title of Legal Attaché in their respective embassies. Price and Herbert are successors to three other agents since the Abu Dhabi office opened in December 2003. They cover both the UAE and Oman. In the region, the FBI also has agents posted in Afghanistan, Egypt, Iraq, Israel, Jordan, Kuwait, Lebanon, Pakistan, Saudi Arabia and Yemen.

During his tenure, former FBI director Louis Freeh pushed to expand the bureau's international presence. It now has offices in 62 countries. This worldwide network of agents is a necessary countermeasure against the growing nexus of international crime. "Just as there are no borders for crime and terrorism, there can be no borders for justice and the rule of law," current director Robert Mueller told the US Senate in March.

Progress

"Twenty years ago, the idea of regularly communicating with our law enforcement counterparts around the world was as foreign as the internet or the mobile phone. Today, advances in technology, travel and communication have broken down walls between countries, continents and individuals," Mueller added. Price and Herbert embody this prog-ress.

Mueller became the dir-ector one week prior to the September 11, 2001 attacks.

The FBI began as a special agent force in 1908 and received its current title in 1935. Since its genesis, the FBI has seen its share of success and failure. Though it has successfully foiled numerous plots, conspiracies and espionage attempts, it has been criticised for shoddy investigation tactics and ignoring intelligence reports that could have prevented past attacks. Regardless, it has survived a century of challenges.

- The writer is a journalist based in Abu Dhabi.

Source: GulfNews

Kuwait: No evidence acquits Asian man in money-laundering charges

The Criminal Court Sunday acquitted an Asian man, identified only as Sabeer M. — who had been sentenced in absentia —for money-laundering citing lack of evidence.

Case papers indicate an employee of the Central Bank of Kuwait investigated the financial status of the man and discovered he worked as a driver for the embassy of a Gulf State in Kuwait for KD 108 monthly salary.

It was also discovered the man maintained two bank accounts — one at the Kuwait Finance House (KFH) and the other at the National Bank of Kuwait (NBK). The man had deposited KD 80,000 at the KFH from January 2005 to September 2006. His deposit at the NBK was KD 160,000.

Police investigations revealed the man was trafficking in international communications. They also found that he had transferred the money out of Kuwait.
This means the man had opened the two accounts only as a ‘transit act’ before transferring it overseas. When police went to arrest the man they discovered he had left the country.

In its verdict, the court said according to Items No 1 and 2 of Law No 35 of 2002, a person can be convicted of money-laundering only if it is clear that the money used in money-laundering was obtained from a crime or in an illegal manner.

The court added according to case papers, there is no evidence to prove the man has committed the crime because no telecommunication equipment had been seized from him.
The session was presided by Judge Abdullah Al-Sane.

http://www.arabtimesonline.com/client/pagesdetails.asp?nid=11469&ccid=22

US workshop in Jordan builds support to battle money laundering

The U.S. government organized a workshop in Jordan to teach officials from the Arab countries how to detect and investigate the smuggling of money.

The U.S. has been working with Jordan and other Arab countries to ensure that banking institutions are subject to appropriate oversight and that they have effective programs in place to prevent money-laundering and terrorist financing.

Participants, including representatives from Jordan, Algeria, Egypt, Kuwait, Lebanon, Mauritania, Morocco, Oman, the Palestinian Authority, Qatar, Tunisia and Yemen, examined anti-money laundering standards used by the Financial Action Task Force, a Paris-based inter-government body set up in 1989 by the Group of Eight industrialized nations.

This week, U.S. federal prosecutors said two NY residents were indicted on charges of trying to smuggle $500,000 (euro323,000) from the U.S. to Jordan.

Authorities said a grand jury in Hartford, Connecticut returned an indictment charging 35-year-old Hassan Abuzaitoun and 33-year-old Mohammad Alazzam with conspiracy to commit money laundering and conspiracy to smuggle bulk cash from the United States. Both are naturalized U.S. citizens from Jordan residing in Yonkers, New York.

Jordanian authorities have often asserted that Jordan was free of money laundering because of its strict monetary regulations and practices.

In 2004, three different groups of families of suicide bombing victims in Israel filed suits in a Brooklyn, N.Y. federal court against Jordan's largest financial institution _ Arab Bank _ alleging that it moved donations from Saudi Arabia to militant Palestinian groups, including Hamas and Islamic Jihad.

The bank denied the allegation. It later decided to close down its New York branch saying it was pursuing its strategy to focus on operations in the Arab world and Europe.

http://www.amlosphere.com/america/legislation/us-workshop-in-jordan-builds-support-to-battle-money-laundering.html

Kuwaiti Charity Designated for Bankrolling al Qaida Network

June 13, 2008
HP-1023

Washington - The U.S. Department of the Treasury today designated the Kuwait-based Revival of Islamic Heritage Society (RIHS) for providing financial and material support to al Qaida and al Qaida affiliates, including Lashkar e-Tayyiba, Jemaah Islamiyah, and Al-Itihaad al-Islamiya. RIHS has also provided financial support for acts of terrorism.

"Designating and freezing the assets of an organization engaged in charitable work is a decision not taken lightly because the last thing we want to do is cut off needed humanitarian assistance," said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence. "However, the reality is that RIHS has used charity and humanitarian assistance as cover to fund terrorist activity and harm innocent civilians, often in poor and impoverished regions. We have a responsibility to do all we can to shut down the funding channels of terrorism."

RIHS was designated today under Executive Order 13224, which targets terrorists and those providing financial, technological, or material support to terrorists or acts of terrorism. Any assets RIHS holds under U.S. jurisdiction are frozen and U.S. persons are prohibited from engaging in any transactions with RIHS.

The RIHS offices in Afghanistan (RIHS-Afghanistan) and Pakistan (RIHS-Pakistan) were designated by the U.S. Government and the United Nations 1267 Committee in January 2002 based on evidence of their support for al Qaida. At that time, there was no evidence that the Kuwait-based RIHS headquarters (RIHS-HQ) knew that RIHS-Afghanistan and RIHS-Pakistan were financing al Qaida.

Since that time, however, evidence has mounted implicating RIHS-HQ in terrorism support activity. The U.S. Government has learned that RIHS senior leadership, who have actively managed all aspects of the organization's day-to-day operations, have been aware of both legitimate and illegitimate uses of RIHS funds.

"We designated two branches of RIHS in 2002, and since then a number of other countries have taken action against RIHS. We look forward to continuing our work with Kuwaiti authorities to ensure that legitimate charitable giving can reach those in need and not be diverted to terrorist organizations," Levey continued.

Suspected of providing support to terrorism, RIHS offices have been closed or raided by the governments of Albania, Azerbaijan, Bangladesh, Bosnia-Herzegovina, Cambodia, and Russia.

In countries where RIHS activities are banned or scrutinized by local governments, RIHS-HQ has developed multiple methods to continue its operations. After the Government of Bangladesh closed RIHS offices, RIHS-HQ funneled money into Bangladesh through another organization to continue RIHS activities and to help shield it from scrutiny there. RIHS-HQ has used RIHS officials and other individuals to courier funds out of the country in order to evade the scrutiny of the international financial system. In some countries, including Albania and Kosovo in particular, RIHS senior officials have assisted RIHS branch offices with name changes, and then continued to provide financial support to the new organizations.

RIHS Support for Terrorism in South Asia

RIHS-HQ provides significant financial and logistical support to the U.N.-designated terrorist group Lashkar e-Tayyiba (LeT), a Pakistan-based terrorist group with links to the al Qaida network. LeT was reportedly implicated in the July 2006 attack on multiple Mumbai commuter trains, and in the December 2001 attack against the Indian Parliament. As of 2007, RIHS provided office space to an LeT leader who visited Kuwait to raise funds for LeT operations. RIHS officials accompanied the LeT leader while he raised funds throughout Kuwait. As of late 2007, RIHS sent money to LeT elements on a monthly basis, and regularly transferred funds to LeT representatives' bank accounts in Pakistan. In some cases, LeT has received the funds at charitable entities associated with RIHS.

RIHS also reportedly provided a key source of funding for terrorist attacks carried out by an extremist group in Bangladesh in 2005. Despite a February 2005 Bangladeshi government ban of the terrorist group Jamaaat Mujahidin Bangladesh (JMB), on August 17, 2005, JMB launched a series of near-simultaneous bomb attacks across Bangladesh, killing two and injuring 64 persons. Over 400 bombs exploded during the course of these attacks, which were carried out in 63 of Bangladesh's 64 provinces. Following the bombings, RIHS was identified as one of the key sources of funding needed for staging these attacks. After the August 2005 bombings, RIHS was accused of funding JMB's military activities with overt and covert funds. These funds were channeled through a senior leader of a Bangladeshi Islamic organization. As of early 2005, RIHS in Bangladesh had contributed millions of dollars to this organization.

RIHS Support for Terrorism in Southeast Asia and the Horn of Africa

RIHS has provided financial and logistical support to the Southeast Asia based terrorist group Jemaah Islamiyah (JI). Specifically, an RIHS employee provided logistical support to JI's fugitive leader Nurjaman Riduan Isamuddin (a.k.a. "Hambali") prior to his capture in 2003. Due to the high security conditions during the 2002 Asian Summit, the RIHS employee escorted Hambali from Phnom Penh, Cambodia, to an alternate location, where he then provided him with accommodations. The employee was later captured and sentenced to life imprisonment on terrorism charges. An RIHS representative in Indonesia provided funding to a JI member collecting money for JI activities. The JI member funneled the funds he received from RIHS and other sources to JI associates for the procurement of weapons to support their operations.

RIHS has also funded al Qaida and like-minded terrorist groups in Somalia. Al Qaida supporters in Somalia reportedly have historically received significant funds through RIHS. In addition, RIHS provided hundreds of thousands of dollars to a university controlled by Al-Itihaad al-Islamiya.

IDENTIFIER INFORMATION

Revival of Islamic Heritage Society

RIHS Headquarters-Kuwait
Revival of Islamic Heritage Foundation
RIHF
Society for the Revival of Islamic Heritage
Islamic Heritage Revival Party
Islamic Heritage Restoration Society
IHRS
Kuwaiti Heritage
Ihya Turas Al-Islami
Ijha Turath Al-Islami
Jamia Ihya Ul Turath
Jamiat Ihia Al-Turath Al-Islamiya
Jam'iyat Ihya' Al-Turath Al-Islami
Jami'at Ihy'a Al-Tirath Al-Islamia
Jamiatul Ihya Ul Turath
Jamiyat Ikhya At-Turaz Al-Islami, Society of the Rebirth of the Islamic People
Jamiatul-Yahya Ut Turaz
Jomiatul Ehya-Ut Turaj
Jomiyatu-Ehya-Ut Turas Al Islami
Jama'ah Ihya Al-Turaz Al-Islami
Jami'ah Al-Hiya Al-Turath Al Islamiyah
Lajnat Ihya Al-Turath Al-Islami
Lajnat Al-Ihya Al-Turath Al-Islami
RIHS Administration for the Building of Mosques and Islamic Projects
RIHS Mosques Committee
Administration of the Revival of Islamic Heritage Society Committee
RIHS Arab World Committee
RIHS Committee for the Arab World
RIHS Committee for West Asia
RIHS Central Asia Committee
Committee for Europe and the Americas
RIHS Europe and the Americas Committee
RIHS Two Americas and European Muslim Committee
RIHS Europe America Muslims Committee
RIHS Southeast Asia Committee
RIHS Committee for South East Asia
RIHS Indian Continent Committee
RIHS Indian Subcontinent Committee
RIHS Committee for India
RIHS African Continent Committee
RIHS Committee for Africa
Revival of Islamic Society Heritage on the African Continent
RIHS Public Relations Committee
RIHS Cultural Committee
RIHS Principle Committee for the Center for Preservation of the Holy Qu'aran
RIHS General Committee for Donations
RIHS Youth Center Committee
RIHS Scientific Committee-Branch of Sabah Al-Nasir
RIHS Fatwas Committee
RIHS Center for Manuscripts Committee
RIHS Educating Committees, Al-Jahra'
RIHS Audio Recordings Committee
RIHS Project of Assigning Preachers Committee
RIHS Office of Printing and Publishing
RIHS Committee for Women
RIHS Committee for Women, Administration for the Building of Mosques
RIHS Women's Branch for the Project of Endowment
RIHS Administration for the Committees of Almsgiving
RIHS Committee for Almsgiving and Charities
RIHS Committee for the Call and Guidance
RIHS-Cambodia
RIHS Cambodia-Kuwait Orphanage Center
The Kuwaiti-Cambodian Orphanage Center
The Kuwait-Cambodia Islamic Cultural Training Center
RIHS Chaom Chau Center
Nara Welfare and Education Association
RIHS-Bosnia and Herzegovina
Kuwaiti Joint Relief Committee, Bosnia and Herzegovina
KJRC-Bosnia and Herzegovina
Plandiste School, Bosnia and Herzegovina
Organizacija Preporoda Islamske Tradicije Kuvajt
Kuwait General Committee for Aid
General Kuwait Committee
RIHS-Albania
Center of Call for Wisdom
CCFW
Thirrja Per Utesi
NGO Turath
RIHS-Kosovo
Dora E Miresise
Hand of Mercy
RIHS-Azerbaijan
RIHS-Russia
RIHS-Lebanon
RIHS-Bangladesh
RIHS-Somalia
RIHS-Ghana
RIHS-Tanzania
RIHS-Benin
RIHS-Cameroon
RIHS-Senegal
RIHS-Nigeria
RIHS-Liberia
RIHS-Ivory Coast

Addresses: Part 5, Qurtaba, P.O. Box 5585, Safat, Kuwait
House #40, Lake Drive Road, Sector #7, Uttara, Dhaka, Bangladesh
Number 28 Mula Mustafe Baseskije Street, Sarajevo, Bosnia and Herzegovina
Number 2 Plandiste Street, Sarajevo, Bosnia and Herzegovina
M.M. Baseskije Street, No.28p, Sarajevo, Bosnia and Herzegovina
Number 6 Donji Hotonj Street, Sarajevo, Bosnia and Herzegovina
RIHS Office, Ilidza, Bosnia and Herzegovina
RIHS Alija House, Ilidza, Bosnia and Herzegovina
RIHS Office, Tirana, Albania
RIHS Office, Pristina, Kosovo
Tripoli, Lebanon
City of Sidon, Lebanon
Dangkor District, Phnom Penh, Cambodia
Kismayo, Somalia
Kaneshi Quarter of Accra, Ghana
Al-Andalus, Kuwait
Al-Jahra', Kuwait
Al-Qurayn, Kuwait
Sabah Al-Nasir, Kuwait
Qurtubah, Kuwait
Hadiyah, Kuwait
Al-Qadisiyah, Kuwait
Al-Fayha', Kuwait
Al-Riqah, Kuwait
Al-Firdaws, Kuwait
Khitan, Kuwait
Al-Sabahiyah, Kuwait
Jalib Al-Shiyukh, Kuwait
Bayan Wa Mashrif, Kuwait
Sabah Al-Salim, Kuwait
Al-Rumaythiyah, Kuwait
Al-Salimiyah, Kuwait
Al-Aridiyah, Kuwait
Al-Khalidiya, Kuwait
Al-Dhahr, Kuwait
Al-Rawdah, Kuwait
Al-Shamiyah Wa Al-Shuwaykh, Kuwait
Al-Amiriyah, Kuwait
Al-Nuzhah, Kuwait
Kifan, Kuwait
Website: www.alturath.org

Source: US Department of Treasury Press Room

Kuwait fights money laundering

During a forum on money laundering organized by the Ministry of Commerce and Industry Sunday, a number of attending officials presented their veiws on measures taken to tackle the phenomenon in Kuwait. MP and President of the Financial and Economic National Assembly Committee Abdulwahed Al-Awadhi said that Kuwait needs to improve its background on the issue applying further legislation to combat money laundering. Al-Awadhi indicated to current numbers released by the International Monetary Fund pertaining to international money laundering that have risen from $1.5 trillion in the nineties to $2.8 trillion.

Deputy Director of Field Inspection in Kuwait’s monetary authority, the Central Bank of Kuwait, Talal Al-Sayegh, told KUNA that the country has linked up with many international organizations related to the cause, as well as signing treaties and agreements in regard to tackling measures. Head of the Department of Charitable Associations and Institutions in the Ministry of Social Affairs and Labour Nasser Al-Ammar said that Kuwait’s National Committee for Combating Money Laundering Operations was founded in 2002 following the terrorist attacks of 11 September on the United States. The committee was established in order to trace charity funds which amount to millions, until their true destination.

Its Director, Sheikh Nemr Fahad Al-Sabah said that the committee holds its inspections annually.

The committee also looks forward towards gaining more expertise, making use of international and regional experiments in the field. Cases of money laundering in Kuwait are extremely low due to the efforts of the government to fight corruption in compliance with international resolutions in regard, said Undersecretary of the Ministry of Commerce and Industry Dr Rashid Al-Tabtabaei on Sunday.

Kuwait issued an anti-money laundering law in 2002 and also forming the National Committee for Confronting Money Laundering Operations, he said in a speech at the Conference on Anti-Money Laundering held in Kuwait. Money gathered for charity in Kuwait needs authorization from the Ministry of Social Affairs and Labour through a valid license, said the undersecretary. The Central Bank of Kuwait is also an inspection body in the country, watching over companies and is in an endless search for fresh methods to tackle the phenomenon, he said. Money launderers look to Arabian Gulf countries as new targets for their operations, especially after the constricting laws in the US and Europe, he noted furthermore.

Source: Arab Times

CBK must be strict to prevent ‘money laundering’

KUWAIT CITY: The Ministry of Social Affairs and Labour has asked the Central Bank of Kuwait (CBK) to be strict in implementing the decisions of the UN Security Council on fighting terrorism, a reliable source told Al-Qabas. He said the ministry has asked CBK to take into consideration the studies conducted by the ministry on regulating charitable works and the procedures for collecting donations to ensure such contributions do not end up in the hands of terrorists, adding “the Mubarrat and Charitable Societies Department at the Social Affairs Ministry has asked Governor of CBK and Chairman of the National Committee to Fight Money Laundering Sheikh Salem Abdul Aziz Al-Sabah to take strict measures to prevent money laundering.” The department considers it important donations collected in the country are sent abroad through legal channels, which can be monitored to review the results, he said.

Meanwhile, the Central Bank of Kuwait (CBK) has issued some new regulations in an effort to increase its control on the loans granted by local commercial banks, says Al-Qabas.

A reliable source said CBK has instructed all local banks to take into consideration the credit limit of their customers as fixed by popular credit cards like Visa and Master Cards in granting loans against deposits, adding “CBK has given all local commercial banks and financial companies three months to comply with the new decision and re-calculate their financial position.”

Claiming the CBK’s condition has taken local banks and financial companies by surprise, the source said “all the banks are against this issue because credit card is an additional service given to customers for daily usage.” Indicating the total cost of purchase made using credit cards is usually deducted at the rate of 10 per cent every month, he said “this cannot be considered a huge liability for customers. Credit cards give them flexibility in purchasing the materials they want.” He also said “in the view of local banks customers do not face any problem in using credit cards because they can use it only according to their credit limit, which cannot be exceeded.”Meanwhile, sources says CBK is looking for ways to reduce the loans given by banks following reports Kuwait is one of the top countries in the region in using credit cards.

http://www.arabtimesonline.com/arabtimes/kuwait/Viewdet.asp?ID=10013&cat=a

Strategy for combating terrorism financing

Dr Moyara Ruehsen

Academic Director of the Terrorism Research and Education Program, Monterey Institute of International Studies California. Dr Ruehsen is an expert on illicit marketing and smuggling with particular focus on the Middle East. The following is based on her lecture in New Delhi organized by IPCS US government efforts in combating terrorism suffer from lack of ad-equate institutional as well as human capital.

The institutional set up includes only one unit within the Treasury Dept called the Financial Crime Enforcement Network - the US financial intelligence unit; one unit within the Federal Bureau of Investigation (FBI), one in the Central Intelligence Agency (CIA), one in the National Security Council (NSC) and one in the State Department.
Coupled with this, some of the top officials are found to be changing their positions on an average every two years which results in lack of continuity while many are transferring to other jobs creating a deficit of skilled experienced officials.

In addition, law enforcement agencies in the US are ill-equipped to deal with cross-cultural links in organized crime, for instance, the FBI in their fight against Chinese organized crime had just one person in their entire force who could speak Chinese.

The best work in this area is being done by the private sector in the financial service industry. This is primarily because the private sector is concerned about liability, for they do not want to face the enormous fine being imposed on them for not doing their due diligence. Since 9/11, the private sector is more vigilant about learning about their customers and monitoring their activities.
Methods of terrorism financing

There are persistent areas of concern which are not being addressed such as monitoring of charity work, bulk cash smuggling - which according to reports largely funded the Iraq insurgency - and false trade invoicing.

False trade invoicing, which has been used by hawala operators to balance their account sheets for a long time, is now being used for organized crime. It is the easiest mechanism of movement of cash, albeit the most neglected one.

Reports on 9/11 reveal that over invoicing between honey importing companies in the Middle East, particularly Kuwait and Yemen, and the US constituted one of the main source of funding of the 9/11 attacks.

Accordingly, the recorded value of honey exported from the US was found to be much higher than the actual value. The names of these companies are on the terrorism fact list on the internet because of their suspicious transactions. The US Department of Commerce however started to take note of these suspicious transactions only recently.

Another source of money laundering is the deduction of money in the form of zaqat by Islamic banks particularly in the Middle East. For instance, it was found that banks in Abu Dhabi automatically deduct a two and a half percentage of money of the account holder without their knowing what the zaqat will be used for.

Yet, another source is private money being donated by philanthropic millionaires around the world who empathize with the Wahabi ideology and who are donating money directly to the madrassas in Pakistan or to groups like Lashkar-e-Taiba operating in Kashmir from Pakistan.

Legalizing hawala operators could be a possible method of countering terrorism financing. India presents a unique case for it is the only country in which hawala transactions are illegal, where as in the rest of the world they are legal so long as the hawala operator is licensed and/or registered. The rationale behind allowing them to operate with a license is so that the law enforcement authority can keep track of these transactions and monitor them. This approach was endorsed by many countries in the Abu Dhabi Declaration.

Another measure for combating terrorism financing is through the setting up of Trade Transparency Units (TTU) in which US is leading the way. A TTU not only monitors commercial transactions, but also uses computer software to pull out all suspicious transactions including under and over invoicing. As of now, the US is focused on South America.

Indo-US cooperation

The reason behind the limited nature of Indo-US cooperation in this field is the close alliance between Pakistan and the US. The US sponsored the development of Pakistan's financial intelligence unit. It also sponsored Pakistan's membership to the Egmont group - a coalition of 101 countries that have a well-established financial intelligence unit in order to share information on various methods of terrorism financing such as money laundering et al.

India's efforts

India has made efforts to strengthen its anti-money laundering laws but two probable measures might help to improve it further: one, joining the Egmont organization that would serve to strengthen India's investigative efforts by reducing chances of investigation being hampered because of lack of shared information between nations; two, setting up of a TTU in India that will help to monitor commercial transactions.

The following are excerpts from the debate generated by Dr Moyara Ruehsen's remarks:

• The proposition of legalizing hawala operators is not feasible in the case of India considering the difficulty in distinguishing between trade transactions for profiteering purposes and those for terrorist activity, the sheer volume of transactions being carried out in India, and the strict banking rules already in place.

• Since terrorism activity is not very capital-intensive, defeating terrorism through financial channels may prove to be futile. A glaring example of this is that of Osama bin laden personally funding terrorist activities in the initial years. Therefore, tracking the use of technology may be a better technique.

• Unless the US takes deliberate measures as a matter of strategy to do something about its relation with Pakistan, there is limited scope for Indo-US cooperation. Another concern is the proliferation of weapons from the US to nations like Pakistan purportedly for fighting the militants, but which in turn finds their way to terrorist organizations. Therefore, American talk and efforts against terrorism are rendered ineffective given the fact that it itself is facilitating the passage of weapons to smaller groups engaged in militant activities.

Dr Moyara Ruehsen's lecture and the debate thereon were recorded by Devyani Srivastava, Research Assistant, IPCS.


http://www.indiapost.com/members/story.php?story_id=6069

Jordan's PM urges worldwide effort to combat corruption

The Associated Press
Sunday, December 10, 2006
AMMAN, Jordan

Jordanian Prime Minister Marouf al-Bakhit on Sunday urged stepped up international efforts to combat corruption, saying it had reached unprecedented levels and played a significant role in global terrorism.

"Corruption of its various sorts has a strong link to organized crime, including drugs, human trafficking, terrorism, arms smuggling, illegal immigration and the misuse of authority, al-Bakhit said.

"Therefore, international cooperation, experience-sharing, information exchange and consolidating technical assistance between countries, international organizations and civil society institutions is highly significant and a human duty," he asserted.

Al-Bakhit said global corruption reached "unprecedented levels." Quoting World Bank figures, he said bribery is estimated at US$1 trillion (€750 million) each year.

"The money spent on bribery is 10 times the international assistance available for development, which makes us realize the seriousness and gravity of the crime of corruption.

Al-Bakhit made the remarks at the opening of a four-day U.N.-sponsored anti-corruption conference on the Jordanian shores of the Dead Sea.

Some 500 participants from 125 countries are reviewing the U.N. Convention Against Corruption, the first legally binding international anti-corruption tool, which came into force on Dec. 14, 2005.

So far, 140 countries have signed the convention and 80 have ratified it to become full-fledged parties.

It addresses corruption in both the public and private sectors and requires countries to criminalize money laundering, bribery, embezzlement of public funds, and obstruction of justice.

Participants include government ministers, civil society representatives and the private sector, who are examining ways to enforce compliance with the convention, asset recovery and technical assistance to build national capacity to combat corruption.

They are also seeking to strengthen legal cooperation between countries in gathering evidence for use in trials and extradition proceedings are also under discussion.

Conference host Jordan, which ratified the convention on Feb. 24, 2005, is among seven Arab countries that are party to the convention, including Egypt, Kuwait, Yemen, Djibouti, Libya and Algeria.

Last Monday, Jordan's ruler, King Abdullah II, issued a royal decree approving the country's anti-corruption commission law, endorsed by parliament in September. It establishes an official body in Jordan entrusted with combating public sector corruption in line with the U.N. convention.

The commission is expected to have a free mandate to pursue current and former officials who are suspected of being involved in corruption.

http://www.iht.com/articles/ap/2006/12/10/africa/ME_GEN_Jordan_U.N._Anti_Corruption.php

Kuwait participates in conference on terror and social development

SOC-ARAB-KUWAIT-TERROR
Kuwait participates in conference on terror and social development

CAIRO, Dec 7 (KUNA) -- The international conference, dubbed "The Effects of Terror on Social Development", is taking place in Sharm El-Sheikh between December 6 and 8.

Third Secretary in the Embassy of Kuwait in Egypt Abdulmehsen Al-Zaid told Kuwait News Agency (KUNA) that the three-day conference focuses on terror, issues hindering social development, Arab expertise in confronting terror, terror and development of economics, and terror and political and social reform in the Arab region.

Al-Zaid noted that the Kuwaiti delegation presented a work paper to the conference that discusses organizing charity works as an active measure for preventing the financing of terrorism.

He added that a number of work papers were presented to the conference that touch on the social and development effects of terror, the Saudi efforts for combating terror, challenges of social integration in Iraq, effects of terror on Arab development, terror threats against social peace and civil security, the future of political reform in lights of confronting terrorism, exceptional laws and their effects on social development, in addition to many other topics.

Al-Zaid said that the conference is held with the participation of a Kuwaiti delegation that includes Assistant Undersecretary for Social Development in the Ministry of Social Affairs Dr. Jassem Ashkanani, Director of Charity Organizations Nasser Al-Ammar, and Public Societies' Observer Salah Al-Rabah. (end) kz.

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KUNA 071851 Dec 06NNNN

http://www.kuna.net.kw/home/story.aspx?Language=en&DSNO=931682