Archive for the ‘News commentary’ Category

h1

Denmark: Dahabshiil at risk for money laundering

September 16, 2014

Offices of the money transfer company Dahabshiil, which operates primarily in Somalia, have been found “completely inadequate” in their compliance with anti-money laundering and terrorist financing laws in Denmark, and the company has been referred to the police for further investigation.

The Danish Financial Supervisory Authority (FSA) began an investigation of Dahabshiil’s offices in Copenhagen, Kolding, Aalborg, and Aarhus in July 2013, and concluded by July 2014 that Dahabshiil “has violated the essential elements of the Money Laundering Act.” FSA found that Dahabshiil’s employees in Denmark received zero training on compliance with the Danish Money Laundering Act, and employees have reported zero cases of suspicious customer transactions over the past five years. The FSA also determined that the destinations of Dahabshiil’s money, Kenya and Somalia, are “countries that have totally inadequate rules to combat money laundering and terrorist financing.”

In response to the FSA’s findings, Dahabshiil denied that its company would be “abused by criminals.”

Financial crime consultant Kenneth Rijock offers the following analysis of FSA’s findings:

Apparently, the local [Danish Dahabshiil] offices had no compliance regime whatsoever, and relied upon the parent entity…

If an EU member nation has taken the trouble to conclude that Dahabshiil represents an unacceptable level of risk, a major UK bank [Barclays] sought to exit the relationship, and ties with Al-Shabaab, which the United States attacked today, and reportedly killed it leader, as representing a clear and present danger to American interests, why can’t OFAC finally smell the coffee, and designate it? Has pressure been exerted by Midwest politicians, who have large Somali expats in their district, and how much more evidence is necessary for sanctions to be imposed?

When I write about high-risk individuals, who are guilty of committing financial crimes, so that compliance officers will know to decline to onboard them as bank clients, I have found that OFAC often doesn’t sanction them for a number of years after the bad news is in the public domain. Why wait so long? There has to be a faster way to identify financial criminals, and terrorist financiers.

Indeed. The FSA’s findings were scarcely reported in Denmark this summer, much less in the United States. Compliance departments have a right to know what allegations and criminal referrals have been made against Dahabshiil.  U.S. financial regulators have some catching up  to do.

In addition to these compliance deficiencies, Money Jihad has previously reported that Dahabshiil makes recurring payments to the al-Shabaab terrorist organization in exchange for the “privilege” of operating in Somalia. Member of Parliament Saado Ali Warsame was slain this summer three years after recording a song describing Dahabshiil’s financing of terrorism and announcing her belief that Dahabshiil had put a bounty on her head.

Meanwhile, several U.S. agencies and politicians are pursuing new ways to ease remittances to Somalia through companies like Dahabshiil.

h1

ISIS fundraisers afoot in Ceuta

September 15, 2014

A cell of Islamic State of Iraq agents have been arrested after operating in Morocco. Several of the operatives are said to have raised funds for their cause in Ceuta, a Spanish city adjoining Morocco. The Local, which subsequently reported that there are as many as 95 Spaniards fighting with ISIS in Syria, has the story:

Spain helps Morocco break up ISIS terror cell

Nine jihadists belonging to a recruitment cell for the terrorist group ISIS were arrested on Thursday in the north of Morocco with the help of Spanish security forces.

The arrests took place in Fez, Tétouan and Fnideq (Castillejos), not far from North African Spanish enclave of Ceuta, after extensive investigations involving Spanish security agents.

Some of those detained had ‘strong ties’ to Spain, Spain’s Interior Ministry said in a statement.

The cell is believed to have been dedicated to the recruitment, financial support and deployment of jihadists. Moroccans and others recruited to the cause by the group would be sent to training camps in Siria and Iraq run by the terrorist organization ISIS.

Once there, they would learn how to use firearms, build and defuse bombs, steal cars and other skills needed to carry out terrorist attacks or suicide missions.

Some of those recruited by the men arrested are believed to have participated in acts of violence in Syria and Iraq, including decapitations which were filmed and shared on social media…

h1

Jebril—Hamas fan, insurance fraudster, ISIS hero

September 14, 2014

While raiding the home of Ahmad Jebril and his father Musa Abdallah Jebril on suspicions of fraud, the FBI agents discovered a poster for Hamas, firearms, and blank passports. The Jebrils were eventually convicted on 42 counts of fraud including money laundering and bank fraud charges. At their 2005 trial it was learned that the Jebrils owned several rental units, which they enjoyed trashing in order to submit false claims to their insurance carrier. Netting over $400,000 from their crimes, no clear accounting of how they spent their money or to whom they transferred it has come to light yet.

Insurance fraud has been documented in other cases as a revenue measure for organized crime syndicates.

Ahmad Jebril spent part of his prison sentence in a federal penitentiary in Indiana that, according to the Detroit Free Press, “has been called Guantanamo North because many of the prisoners are Muslims whom prosecutors have tried to link to terror cases.” Only positive influences from his cell mates, to be sure.

Since his release, Jebril’s popularity among terrorists and his debts for restitution have only grown. Thanks to those who sent this in from the Detroit Free Press on Aug. 21:

U.S.: Dearborn cleric popular with ISIS fighters owes $250K for fraud

A cleric in Dearborn popular with supporters of the militant group ISIS owes a quarter of a million dollars in restitution and other costs stemming from his fraud convictions, according to newly filed court records.

Ahmad Jebril, 43, who has gained an international following among ISIS fighters and sympathizers, is on probation after serving 6½ years in prison. After being released in 2012, he has used social media to become what experts say is the most popular religious leader for Islamists from the West fighting for ISIS, also known as ISIL or the Islamic State…

Federal authorities in Detroit are trying to collect more than $250,000 in restitution from Jebril and more than $3,600 in special assessments for 42 counts of fraud. So far, Jebril has paid only $2,790, according to a motion filed Aug. 11 by the U.S. Attorney’s office in Detroit. On Aug. 12, U.S. District Judge Gerald Rosen approved the government’s motion, which calls for “actions necessary to enforce the collection of the restitution.”

In the motion, federal prosecutors wrote that a probation officer said she has “financial information about (Jebril) that would be helpful” to set up an “appropriate repayment schedule.” Jebril’s liability for restitution expires 20 years after his release from prison, which means he would have to pay more than $1,000 a month to pay his amount in full, which he is currently not meeting, said prosecutors.

Jebril and his attorney did not returns calls or an e-mail seeking comment. He was to appear for a deposition in the case on Aug. 13.

The government’s move to collect money from Jebril comes after Rosen placed restrictions on the Dearborn cleric in June because of his probation violations. Jebril was traveling out of state to speak at Islamic centers, but now is not allowed to leave the eastern half of Michigan and must share information about his computer activity to his probation officers if asked. The restrictions came after a Free Press report in May that noted his extensive activities online.

The Centre for the Study of Radicalisation and Political Violence released a report in April that said Jebril was the most popular inspirational figure for Western fighters flocking to the Middle East to join ISIS…

h1

Hard dose of reality on funding moderates

September 12, 2014

During his Wednesday night speech, Pres. Obama called on Congress “to give us additional authorities and resources to train and equip these [Syrian opposition] fighters. In the fight against ISIL, we cannot rely on an Assad regime that terrorizes its own people — a regime that will never regain the legitimacy it has lost. Instead, we must strengthen the opposition as the best counterweight to extremists like ISIL.”

The hazards of funding Syrian fighters have been clear for years, and the resurgence of ISIS should eliminate any temptation to fall in love again with the myth that we can identify “safe” partners in Syria and ensure that the money and arms we give them stay exclusively within their hands.

An extremely important piece of analysis on this subject by Dr. Marc Lynch was published by the Washington Post last month. Lynch comes to it from a different perspective of questioning the likelihood of effectiveness, noting that, “external support for rebels almost always make wars longer, bloodier and harder to resolve.” Read it all:

Would arming Syria’s rebels have stopped the Islamic State?

Former secretary of state Hillary Rodham Clinton made news this weekend by suggesting that the rise of the Islamic State might have been prevented had the Obama administration moved to more aggressively arm Syrian rebels in 2012. Variants of this narrative have been repeated so often by so many different people in so many venues that it’s easy to forget how implausible this policy option really was.

It’s easy to understand why desperate Syrians facing the brutal regime of Bashar al-Assad hoped for Western support, especially by early 2012 as the conflict shifted inexorably from a civic uprising into an insurgency. It is less obvious that U.S. arms for the rebels would have actually helped them. Arming the rebels (including President Obama’s recent $500 million plan) was, from the start, a classic bureaucratic “Option C,” driven by a desire to be seen as doing something while understanding that there was no American appetite at all for more direct intervention. It also offered a way to get a first foot on the slippery slope; a wedge for demanding escalation of commitments down the road after it had failed.

There’s no way to know for sure what would have happened had the United States offered more support to Syrian rebels in the summer of 2012, of course. But there are pretty strong reasons for doubting that it would have been decisive. Even Sen. John McCain was pretty clear about this at the time, arguing that arming the rebels “alone will not be decisive” and that providing weapons in the absence of safe areas protected by U.S. airpower “may even just prolong [the conflict].” Clinton, despite the hyperventilating headlines, only suggested that providing such arms might have offered “some better insight into what was going on on the ground” and “helped in standing up a credible political opposition.” Thoughtful supporters of the policy proposed “managing the militarization” of the conflict and using a stronger Free Syrian Army as leverage to bring Assad to the bargaining table.

Would the United States providing more arms to the FSA have accomplished these goals? The academic literature is not encouraging. In general, external support for rebels almost always make wars longer, bloodier and harder to resolve (for more on this, see the proceedings of this Project on Middle East Political Science symposium in the free PDF download). Worse, as the University of Maryland’s David Cunningham has shown, Syria had most of the characteristics of the type of civil war in which external support for rebels is least effective. The University of Colorado’s Aysegul Aydin and Binghamton University’s Patrick Regan have suggested that external support for a rebel group could help when all the external powers backing a rebel group are on the same page and effectively cooperate in directing resources to a common end. Unfortunately, Syria was never that type of civil war.

Syria’s combination of a weak, fragmented collage of rebel organizations with a divided, competitive array of external sponsors was therefore the worst profile possible for effective external support. Clinton understands this. She effectively pinpoints the real problem when she notes that the rebels “were often armed in an indiscriminate way by other forces and we had no skin in the game that really enabled us to prevent this indiscriminate arming.” An effective strategy of arming the Syrian rebels would never have been easy, but to have any chance at all it would have required a unified approach by the rebels’ external backers, and a unified rebel organization to receive the aid. That would have meant staunching financial flows from its Gulf partners, or at least directing them in a coordinated fashion. Otherwise, U.S. aid to the FSA would be just another bucket of water in an ocean of cash and guns pouring into the conflict.

But such coordination was easier said than done. The Qatari-Saudi rivalry was playing out across the region, not only in Syria. Their intense struggles over the Muslim Brotherhood, Egypt and the overall course of the Arab uprisings were peaking during the 2012–13 window during which arming the rebels was being discussed. Their competition largely precluded any unified Gulf strategy. Turkey and Qatar channeled money and support to a variety of Islamist groups. Meanwhile, U.S.-Saudi relations were also at their nadir, before fears of jihadist blowback began to concentrate Saudi minds. Riyadh showed no more interest in following the United States’ lead in Syria than it did on Egypt or Iranian nuclear talks. External backers of the rebels didn’t even agree on whether the goal was to protect civilians, overthrow Assad, bring the regime to the table, or to wage a region-wide sectarian war against Iran. It is difficult to see Gulf capitals embroiled in these regional battles becoming more receptive to American guidance just because the United States had some “skin in the game.”

Meanwhile, huge private donations from the Gulf flowed toward mostly Islamist-oriented groups. These were massive public mobilization campaigns, mostly led by popular and ambitious Islamist figures who framed support for Syria along religious and sectarian lines in increasingly extreme ways. (Incidentally, the magnitude of those campaigns reveals the absurdity of recent claims that Arabs had ignored Syria’s war compared to Gaza.) Kuwait became the key arena for collecting money, as other Gulf states more tightly controlled private donations for Syria, but Islamists from across the region and especially Saudi Arabia continued to play a prominent role in the campaigns. Fears of jihadist blowback have led Gulf states to crack down on these private efforts, including Kuwait’s recent stripping of the citizenship of Nabil al-Awadhy, one of the most prominent of these Syria campaigners. But at the time Clinton’s plan was under discussion, those campaigns were peaking, with massive public support built around Islamic and sectarian identity.

That intra-state competition and popular mobilization is the regional context within which U.S. efforts to arm the FSA would have unfolded. The FSA was always more fiction than reality, with a structure on paper masking the reality of highly localized and fragmented fighting groups on the ground. Charles Lister’s comprehensive recent survey of the current Syrian military battlefield should quickly dispense with the simpler versions of the conflict. Syria’s civil war has long been a dizzying array of local battles, with loose and rapidly shifting alliances driven more by self-interest and the desires of their external patrons than ideology. Even at the height of the conflict between the Islamic State and its more secular rivals, local affiliates fought side by side in other theaters of the war. No one should be surprised that, as Hassan Hassan reports, some U.S.-backed and vetted groups have aligned with the Islamic State.

The idea that these rebel groups could be vetted for moderation and entrusted with advanced weaponry made absolutely no sense given the realities of the conflict in Syria. These local groups frequently shifted sides and formed alliances of convenience as needed. As MIT’s Fotini Christia has documented in cases from Afghanistan to Bosnia, and the University of Virginia’s Jonah Shulhofer-Wohl has detailed in Syria, rebel groups that lack a legitimate and effective over-arching institutional structure almost always display these kinds of rapidly shifting alliances and “blue on blue” violence. A “moderate, vetted opposition” means little when alliances are this fluid and organizational structures so weak.

The murkiness of the “terrorist group” line in this context is apparent in these changing alliances and conflicts. For instance, the United States recently designated two key Kuwaiti Islamists as terror financiers, accusing them of channeling funds to Jubhat al-Nusra and the Islamic State. But both were better known as backers of Ahrar al-Sham, a large Salafist organization that then worked within the Saudi-backed Islamic Front. And as recently as June, when they were allegedly funding the Islamic State and al-Nusra, one of them was holding events with FSA commander Riad al-Assad. These complexities, so deeply familiar to everyone who studies the conflict, deeply undermine the assumptions underlying plans resting on identifying and supporting “moderate rebels.”

Many have argued that the United States might have changed all of this by offering more support for the FSA. But based upon his outstanding recent book “Networks of Rebellion,” the University of Chicago’s Paul Staniland urges caution. Initial organizational weaknesses have long-lasting implications. “Pumping material support” into them, he observes, “might buy some limited cooperation from factions that need help, but is unlikely to trigger deep organizational change. This means that foreign backing for undisciplined groups will not do much.” Syria’s famously fractured and ineffective opposition would not likely have been miraculously improved through a greater infusion of U.S. money or guns.

In short, then, discussion of U.S. support for Syria’s rebels overstates the extent to which such aid would matter given the diverse sources of support available. U.S. arms would have joined a crowded market and competed within an increasingly Islamist and sectarian environment…

h1

Imran Khan says ditch the banks and use hawala

September 9, 2014

The ex-cricket star, political gadfly, and possible future prime minister of Pakistan Imran Khan is commanding his supporters and their families abroad to send money back and forth to each other through hawala, the traditional Islamic system of transferring money, rather than using conventional banks or wire transfer services.

This account comes from Dispatch News Desk on Aug. 23. As the article notes, Pakistan has officially sought to discourage hawala since it has been so often used to finance terrorist attacks, which is what makes Khan’s instructions disturbing.

“Use Hawala Hundi system for transfer of money to Pakistan”, says Imran Khan

The Chairman of Pakistan Tehrik-i-Inasaf (PTI) Imran Khan has directed his followers living outsides Pakistan to stop sending money to their families in Pakistan through banks(remittances)  and directed them to use Hawala Hundi system for transfer of money to Pakistan. He passed these directions while addressing his workers on Saturday night.

Chairman Pakistan Tehrik-i-Insaaf (PTI) Imran Khan on August 17, 2014 announces Civil Disobedience against sitting government asking his workers and followers not to pay any utility bills and taxes. Now he has directed to stop sending remittances to Pakistan.

Hawala or Hewala also known as hundi, is an informal value transfer system based on the performance and honour of a huge network of money brokers, primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems. This is the biggest channel being used by Arab and Afghan terrorists including Al-Qaeda to transfer money and finance their projects, therefore this channel is being discouraged by Pakistan since war on terror.

h1

Why can’t you send money home to Somalia? Because your politicians want sharia banking first

September 8, 2014

The fairy tale is that existing financial channels from conventional Western banks in England and Minnesota can create a new, “safe corridor” for high-tech, well-screened remittances from the Somali diaspora back to their families with an eliminated risk of financing terrorism or corruption in the process. The sharia banking plan is to leapfrog over the creation of a conventional, interest-based banking sector in Somalia by establishing sharia financial sector based exclusively on Islamic law. The word on the street is that the notorious money transfer company Dahabshiil is peddling influence with Somali politicians to ensure that no new financial institution cuts into their racket—a charge which (like every other mounting charge against it) Dahabshiil denies.

The result of all this is that there has yet to be a conventional bank in Somalia that can provide banking and money transfer services.  Thus it is becoming increasingly clear that Western banks should not be blamed for the inability of Somali leaders to authorize their own private banks and remittance channels.  The next time you hear somebody demand Western banks to keep the “lifeline” of Somali remittances open, ask yourself why Somali politicians won’t create a lifeline of their own.

The following excerpt from an Aug. 25 Foreign Policy article entitled, “Franchise Opportunity: Western Union in Somaliland” (hat tip Sal) goes a long way to explain why:

…For the past year, Somaliland’s parliament has failed to enact legislation allowing the creation of a commercial banking sector. The reluctance, government insiders say, is rooted in the belief that sends the muezzin’s call to prayer echoing from every corner of Hargeisa five times a day: the Islamic faith. Mindful of a constitution explicitly drafted according to Islamic principles, Somaliland’s parliamentarians have approved an Islamic Banking Law, but have yet to pass its commercial equivalent. They fear it could introduce the charging of interest on economic activity, which is unacceptable under sharia law.

“We’ve visited parliament; we have sat down with the chairman to explain how important this is, how much we need these foreign banks. We push and push and push,” says Abdilahi Hassan Aden, director general of Somaliland’s (unrecognized) central bank. “But we are still waiting.”

A Western advisor to the government sees parliament as ultimately persuadable, but not without work. “A lot of this is about changing the narrative when it comes to religion, changing mentalities,” the advisor says. “Islamic countries like Malaysia or Indonesia, for example, still manage to have commercial banking sectors.”

In private, some officials voice the suspicion that a commercial banking law has been so long in coming because the MTOs, influential local economic players that they are, until recently preferred the remittance system to remain just as it was. It’s a charge Dahabshiil, for its part, rejects. Abdirashid Duale, chief executive officer, insists the company is keen to see legislation allowing commercial banking passed. “Dahabshiil is very supportive of any law or other initiative that supports the commercial banking sector,” he says.*

Dahabshiil, which says it does background checks on all the customers it can, sees itself instead as a victim of world events. “All of this started because of 9/11,” Duale says. “Before then, there was no difference between us and a grocery store opening a bank account to deposit its earnings. With 9/11, the world changed, especially for Muslims.”

MTO operators say Barclays’s move would do the opposite of improving competition on a continent whose inhabitants already pay well over the odds for their money transfers. U.S.-based Western Union and MoneyGram, which the Barclays decision would not affect, charge far higher fees than Dahabshiil, which prides itself on being the cheapest MTO in the world.

Dahabshiil has now applied for and been granted a banking license under Somaliland’s existing Islamic banking legislation. But if that materializes, there would still be an open question of how thousands of rural families who will never see the inside of a bank — too far away, too expensive — would survive financially.

After a spirited lobbying campaign by the Somali diaspora, fronted by Olympic sprinter Mo Farah, whose family lives in Somaliland, the British government set up an action group in the fall of 2013 to try to hammer out a solution. The Department for International Development (DFID), alongside the British Treasury, is working on establishing a “safer corridor” for remittances. Its feasibility study explores ways of improving customer due diligence, from biometric fingerprinting to PINs to bar codes, and the establishment of an independent “trusted third party” to audit transactions. But more than a year after the remittance issue first blew up, the “safer corridor” remains a distant aspiration.

British consultants who were in Hargeisa to address a conference on money laundering, attended by Somaliland government ministers, remittance companies, the local Chamber of Commerce, and the World Bank, dismiss the “safer corridor” idea as a non-starter. (They have been commissioned by Dahabshiil to carry out a regional banking survey.) “It’s a Hans Christian Andersen story concocted by DFID, a case of the emperor’s new clothes,” says Peter Norris of Obiter Consult. “It’s been very unhelpful in luring everyone into a false sense of security.”

“The idea that you can have some massive computer system and somehow feed all this information in … and the computer will somehow work out which clients are dodgy and which are clean is a nonsense,” he adds…

h1

Mayor urges joint venture between investors and armed Marxist guerrillas

August 30, 2014

Rodrigo Duterte, mayor of the third largest city in the Philippines, is urging the Communist rebels to lease or sell 50,000 to 100,000 hectares of land to a group of Malaysian and Thai investors to use for a palm oil plantation.

According to the Philippine military, Marxist violence in that country led to the deaths of 3,000 people between 2001 and 2009. Yet Mayor Duterte thinks that local rebels in his city can be happily bought off with rents paid by foreign investors.

This is the same mayor who let it slip that he himself has paid revolutionary taxes to these insurgents (a common terrorist financing tactic), and he encouraged corporations to do the same. Just what kind of investors are these who would be willing to make such deals? One suspects that corruption between Duterte and this unnamed group of investors is afoot; backscratching is going. The only good news is that the Communist terrorists themselves don’t seem too interested Duterte’s corrupt deal.

It should be noted that the tendency of businessmen to cave into the demands of terrorists and pay them money is how ISIS rebuilt its capital before beginning to sweep down the Iraqi countryside.

From Davao Today in June:

Duterte urges rebels to engage in palm oil “joint venture” with Malaysian, Thai company

By JOHN RIZLE L. SALIGUMBA

June 13 2014

DAVAO CITY — Mayor Rodrigo Duterte urged New People’s Army guerillas to “bury your guns, or hang it on a tree” and engage into a joint business venture with a Malaysian and Thai entity that is looking for a 100,000-hectare area to plant oil palm and sesame seeds plantation.

With Paquibato District a known “stronghold” of the NPA in northern Davao City, Duterte said a plantation in their mid would be solely offered to the guerrillas to grab the opportunity.

Wa ko mangayo nga ang NPA isurrender ilang armas, tagoan lang nila unya akoy mopagador, sabot mo kung pila ilang pangayuon sa yuta. Kay ilang paliton ang palm oil unya naay trabaho. (I do not ask the NPA to surrender their arms; they just have to hide it. You [NPA] should talk [to investors] how much [rent] you want for the land. They [investors] will buy it and provide jobs),” he said.

Duterte said if the NPA agreed, he guarantees to talk with President Benigno Simeon Aquino III and the Armed Forces of the Philippines about “closing” Paquibato.

“Inyo na, kamo diri ug mga NPA,” said Duterte during the 116th Philippine Independence Day commemoration program he attended in Barangay Paquibato Proper, Paquibato District here.

Duterte was talking about his proposal several times since May this year but it was only lately that he gave the nationalities of the supposed investors. The size of the supposed plantation range from 50,000 to 100,000 hectares, which are figures given by Duterte himself in interviews with the media.

The NPA has not issued any statement yet on Duterte’s offer but the guerrillas have spoken against oil palm plantations in several statements.

The Communist Party of the Philippines refers to the NPA as “‘the tax enforcement agency of the people’s revolutionary government’ as it collects ‘revolutionary taxes’—especially from foreign-owned enterprises—in the regions where it operates.”

Follow

Get every new post delivered to your Inbox.

Join 5,330 other followers