Posts Tagged ‘Sharia finance’

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The money jihad: recommended reading

February 13, 2014
  • A senior Al Qaeda facilitator/financier in Iran is “more active than ever”… more>>
  • Sharia-compliant finance was concocted by the Muslim Brotherhood to undermine the Western financial system and establish the banking backbone of a neo-Caliphate, says the American Center for Democracy… more>>
  • Al Qaeda affiliates have more money than Al Qaeda Central. Time to rethink who’s calling the shots… more>>
  • Sen. Warner says that he knows from the intelligence community that what happened to Target shoppers in its credit card breach “happens daily to financial institutions”… more>>
  • Banks and businessmen should keep an eye on Turkey because it’s still helping Iran evade sanctionsmore>>
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Top terror finance stories of 2013

December 30, 2013

From massacres on the streets of Syria to the streets of Boston, 2013 has offered far too many illustrations of how terror-borne bloodshed is financed:

  1. Sunni and Western powers risk funding Syrian rebels despite their Al Qaeda allegiance
    Saudi Arabia, Qatar, Turkey, the U.S., U.K., and France have provided money and supplies to the enemies of Syrian dictator Bashar al-Assad despite the risk of the materiel falling into the wrong hands.  Gulf-based support has gone directly toward Salafist fighters; Western aid has been targeted toward the supposedly moderate Free Syrian Army, but entire brigades of the FSA have pledged allegiance to al-Nusra Front—Al Qaeda’s affiliate in Syria—during 2013.  Reports this month of a “suspension” of U.S. aid have been somewhat exaggerated; as one official conceded, “the suspension of aid only applies to the opposition in northern Syria, adding that supply lines from Jordan in the south would continue.”  Foreign support has prolonged the conflict in Syria and increased the chances for Al Qaeda to take over the country.
  2. Boston marathon bombing made possible by Saudi money
    North Caucuses militants have been funded for decades by Saudi Arabia.  The Saudis and their wealthy expatriate terrorists like Ibn al-Khattab  and Osama Bin Laden and invested millions of dollars into the training and recruitment of fighters, the construction of radical mosques, and the creation of jihadist websites in Slavic languages.  Tamerlan Tsarnaev read and engaged with these websites and pursued support from these Saudi-sponsored sources when he traveled to Russia in 2012.  Tsarnaev and his brother Dzhokhar also learned from Inspire magazine by deceased terror imam Anwar al-Awlaki, who presided over Al Qaeda in the Arabian Peninsula.In effect, Saudi money created the breeding environment both online and on the ground in the North Caucuses in which the Tsarnaevs’ plot was hatched.

    Sadly, the media and public officials have been slow to recognize and expose the connections between the Saudis, the North Caucasus militants, and their followers living in North America.  Two Democrat-appointed federal judges inexplicably reversed the conviction this year of Pete Seda, a Muslim “peace activist” who sent money through a Saudi-based charity from Oregon to Chechen terrorists in the early 2000s.

  3. The U.S. became the world’s #1 energy producer in 2013.  This development reduces our dependence on Arab oil and the flow of petrodollars that fund terrorism.
  4. The compensation of victims of Iranian-sponsored terrorism was ignored during negotiations in Geneva on Iran’s nuclear program.
  5. The Somali Islamic terrorist group al-Shabaab’s finances rebounded in 2013 despite their loss of control in 2012 of the key harbor in Kismayo to Kenyan, African Union, and allied forces.  The main ingredients in their financial resurgence included an expansion al-Shabaab’s lucrative charcoal smuggling operation, the resumption of payments from the Dahabshiil money service to al-Shabaab, and indirect support from the Gulf.  The funding has allowed operations such as killing sprees in Mogadishu and the September terrorist attack on Westgate mall in Nairobi, Kenya.  Nevertheless, a British court injunction has forced Barclays to continue partnering with Dahabshiil to facilitate remittances to Somalia.
  6. Read the rest of this entry ?
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Bin Laden’s old bank signs £100m London deal

December 3, 2013

Osama Bin Laden used to send money to his operatives through Tadamon Islamic Bank, a sharia-compliant financial institution based in Yemen.  Hassan al-Turabi, the man largely responsible for the imposition of sharia law in the Sudan, also had free access to Tadamon in the 1990s.

Tadamon, now calling itself Tadhamon International Islamic Bank, maintains a “wholly owned subsidiary” investment bank called Tadhamon Capital in Bahrain.  Tadhamon Capital has just reached a £100 million (163 million USD) agreement to build a mixed-use student housing and commercial development on Paul Street in London.

From ArabianBusiness.com:

Bahrain investment firm inks $163m London deal

By Andy Sambidge

Saturday, 30 November 2013

Bahrain-based Sharia compliant investment firm Tadhamon Capital has announced the acquisition of its second Central London development in a deal worth more than £100m ($163m).

It said the Paul Street development was concluded in a joint venture with Apache Capital and McLaren Property following the full letting of its first prime London student development, Paris Gardens.

The Paul Street development will be comprised of three blocks, two of which will contain 456 student accommodation units with a 1,550 sq ft ground floor retail space, with the third block consisting of a stand-alone office building.

Tadhamon said in a statement that construction work is expected to commence in during the first quarter of 2014 with completion targeted by the end of Q3 2015.

It said the investment is expected to generate a minimum average annual net cash yield of 7.3 percent.

Paul Street is located on the northern fringe of the City, within proximity of the fashionable areas of Hoxton and Old Street.

Waleed Abdulla Rashdan, CEO of Tadhamon Capital, said: “Over the past four years we have taken a strategic decision to expand our investments within the UK and have since focused on building our social infrastructure platform.

“To date, we have successfully closed 10 transactions at a total value of £240m… We will continue exploring further opportunities within these sectors as part of our platform as they have proven their resilience to market changes, and continued their marked growth.”

He added “Over the past years we have established a solid real estate investment platform which will be used to replicate our success and experience within the UK to invest over the next 18 months in selected cities within the EU, US and Turkey.”

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Kuwaiti tycoon runs Hamas’s newest sharia bank

November 21, 2013

In May, Kuwaiti businessman Dr. Riyadh Al-Khulaifi launched Al-Intaj bank, an Islamic financial institution that has no license to operate from the Palestinian Monetary Authority.  Hamas and Al-Khualifi conceived of the bank to help keep Hamas afloat, to help evade international sanctions, and to increase sharia-compliant services in Gaza.

Hamas is probably concerned that Islamic National Bank, the other unlicensed sharia bank upon which the terrorist group relies, could be disrupted again by Israel, prompting the creation of Al-Intaj.

Al-Khulaifi is a member the International Islamic Fiqh Academy, a Muslim Brotherhood affiliated group that supports “armed resistance.”  His leadership over the Gaza bank could indicate an acceleration in Kuwait’s foot race with Saudi Arabia and Qatar to see who can buy the most Islamist loyalty abroad.

From IslamicFinance.de earlier this year:

A new bank is set to be inaugurated in the Gaza Strip next week, although it has not yet received the necessary license from the Ramallah-based Palestinian Monetary Authority (PMA). The Al-Intaj bank has a capital of $20m and a board of directors chaired by Kuwaiti businessman and member of the International Islamic Fiqh Academy, Dr Riyadh Al-Khulaifi. The bank… will be headquartered in Gaza City and have branches in other parts of Gaza Strip in the coming years. 50% of its capital will be channelled to production-oriented activities, while 40% will be allocated to the traditional transactions. The remaining 10% will be set aside to the ‘murabahat’ (Shari’ah-compliant transactions), the lender’s deputy board chairman Rushdi Wadi said.

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Two unlicensed sharia banks sustain Hamas

November 7, 2013

Islamic National Bank and Al-Intaj have no approval from the Palestinian Monetary Authority to operate.  These Islamic banks are dangerously under-capitalized and they circumvent international sanctions against Hamas.  Even the rabidly anti-Israel website Electronic Intifada is admitting this situation:

Unlicensed banks provide “safety net” to besieged Gaza

Hana Salah
29 October 2013

Gaza Strip—Two Islamic banks have played a critical role in helping Gaza cope with the siege imposed by Israel and enforced by the Egyptian government.

The Islamic National Bank and Al-Intaj have managed to stay in business despite attacks on them and threats to their operations; Israel bombed the Islamic National Bank in November last year. Meanwhile, the public sector which both banks sustain has been hampered by the closure of tunnels linking Gaza to Egypt.

Both banks operate without the approval of the Palestinian Monetary Authority (PMA), which was established under the 1993 Oslo accords to oversee the financial system in the occupied West Bank and Gaza Strip. Instead, they have been given permits to operate by the Hamas-led administration in Gaza.

Due to their lack of PMA approval, these banks can only work in the Gaza Strip, without connections with Israeli or international banks.

“Safety net”

Mohsen Abu Ramadan, an economic analyst, said that the two banks have provided “a monetary safety net for the Hamas government, and replaced the licensed banks, which refused to deal with Hamas.”

The nexus between these banks and Hamas underscores once again the natural relationship that exists between Islamic banks and the financing of terrorist groups.

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Financial mischief: recommended reading

September 26, 2013
  • “We should bleed America economically,” says Zawahiri…  more>>
  • It was a lot of fun laundering $1.4 million for terrorist guerrillas, until he got caughtmore>>
  • The Muslim Brotherhood created international sharia-compliant finance, and still controls it… under Saudi supervision.  More>>
  • If Muhammad Atta II waltzed into SunTrust today, would he qualify for a bank account?  More>>
  • Uzi Shaya could prove to be a crucial witness in the terror finance trial against the Bank of China—if Israel lets him testify… more>>
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Prominent members of radical mosque indicted for money laundering

August 20, 2013

Amer Ahmad, the former deputy treasurer and CFO of the state of Ohio and former city comptroller for mayor Rahm Emanuel in Chicago, Illinois, and his longtime friend Mohammed Noure Alo have been indicted for money laundering.  They were members the radical Noor Islamic Cultural Center in Columbus, Ohio.

A tip of the hat to anti-money laundering lawyer Christine Duhaime for tweeting this out from Columbus’s Channel 10:

Former Ohio Deputy Treasurer, Columbus Lawyer Indicted In Alleged Money Laundering Scheme

Thursday August 15

COLUMBUS, Ohio – The former Ohio deputy treasurer and a lawyer from Columbus are accused of engaging in bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Amer Ahmad, 38, of Chicago, and Mohammed Noure Alo, 35, of Columbus, were indicted Thursday on charges of conspiracy and honest services wire fraud. Two others also were indicted.

Ahmad also is charged with money laundering, conspiracy to commit money laundering, federal program bribery and making false statements…

Ahmad and Alo have a documented history of improprieties.  In 2009, former Ohio treasurer Kevin Boyce “hired [Mohammed Noure] Alo’s wife in late December to fill a sudden opening in his office. Ahmad said the job, which pays $37,500 a year, was not posted. He announced the opening at his mosque and [his friend] Alo’s wife, [Walaa] Waeda, responded. She was the only job candidate interviewed, Ahmad said.”

The Dayton Daily News reported that Ahmad did not disclose this hiring of Waeda when a state contract was awarded to one of Alo’s clients, State Street Bank.  Recently, State Street was also selected to manage a major Saudi sharia-compliant investment fund in Ireland.

After serving as deputy treasurer of Ohio, Chicago mayor Rahm Emanuel hired Ahmad to become the comptroller of Chicago, despite the fact that “When Emanuel brought Ahmad to City Hall in late April 2011, newspapers in Ohio already had raised questions about the links between Ahmad and Alo after a Boston-based bank won business from the Ohio treasurer’s office after hiring Alo as its lobbyist.”

Current Ohio treasurer Josh Mandel was previously excoriated by the liberal media for accurately pointing out the improper dealings of Boyce, Ahmad, and Alo during his campaign to unseat Boyce.  So far, the media has yet to acknowledge that Mandel was right all along.

In addition to attending the radical Noor mosque, Amer Ahmad was a speaker in 2010 at the Council for the Advancement of Muslim Professionals (CAMP), a group with several ties to the Muslim Brotherhood in North America.

Ahmad and his wife created a community service organization called “SalamCorps” for which no registration or tax records could be found by Money Jihad.  Noure Alo and Walaa Waeda participated in a SalamCorps event.

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Banker supports taxes for jihad

June 30, 2013

The former chairman of Islami Bank Bangladesh, Limited (IBBL), Shah Abdul Hannan, explained his support for collecting taxes beyond zakat for the purposes of waging jihad in an article posted online around 2003 (available here and here).  Hannan based this argument on the writings of Yusuf al-Qaradawi, the notorious Muslim Brotherhood leader, Hamas charity front financier, and sharia finance proponent.

Referring to Qaradawi’s Fiqh al Zakah, Hannan wrote:

…Allah has made it obligatory to carry out Jihad (defence of Islam and Islamic territory and to put an end to oppression anywhere in this world) through employing one’s life and wealth. This is a duty beyond Zakat. To carry out a major Jihad in this age, if needed, there is no other way but to raise resources through taxes…

Hannan has also condemned peaceful Shahbag dissidents who are calling for justice against war criminals in Bangladesh.  Hannan calls the student demonstrators fascists.  Well, Mr. Hannan—it takes one to know one.

Money Jihad has been documenting the terrorist financing activities of IBBL, one of the biggest banks in Bangladesh and its largest sharia financial institution, ever since Bangladeshi authorities revealed in 2011 that Islami Bank has been diverting eight percent of its corporate zakat to jihadi militants.  A member of IBBL’s sharia advisory board was also detained and questioned for possible involvement in an attack against police.

IBBL fell under international scrutiny in 2012 after the U.S. Senate reported that HSBC continued to maintain a business relationship with IBBL despite evidence of its role in funding terrorism.

More recently, U.S. garment importers including Wal-mart and J.C. Penny have severed ties with IBBL due to the Islamic bank’s role in supporting militants.  Nonetheless, Western Union continues to do business with IBBL.

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Word of the week: soft loan

April 17, 2013

Among the hundreds of requests for zakat or other financial assistance that Money Jihad has received from overseas spammers, a couple have involved requests for a “soft loan.”

In June 2011 through our “Contact us” page, Wisnu Wibowo wrote, “Asalamualaikum… I hope someone can help with soft loan” purportedly to keep him out of jail for a $2,000 debt.  Borrowing from Peter to pay Paul, it would seem.

In January of this year, somebody named Krisna Busana Karya also contacted Money Jihad demanding “grants or soft loan” with a five year term to help with an oyster cultivation business with an eye toward a growing market in Jakarta.  Tempting offer, Krisna, but no thanks.

What is a “soft loan”?

A soft loan is defined as “A loan made on terms lower than or more favourable to the borrower than regular commercial terms”.*

Soft loans are repaid with interest, but it may be at a smaller interest rate or payable over a longer term than conventional loans.  Since interest is involved, soft loans are not sharia-compliant.

Nevertheless, extending a soft loan to a borrower who cannot meet conventional terms suggests that the lender is taking on risk in excess of what the capital markets normally bear.  Therefore, soft loans are somewhat similar to sharia finance in that both deviate from fair market interest rates.  Soft loans, like sharia loans, come with strings attached, such as concessions made by the borrower.

People do not lend for free.  Reduce or eliminate interest rates, and lenders will come up with ways of recouping the costs through fees or other methods.  Is “ethical finance” truly ethical when the actual cost of borrowing is obscured by fees and special conditions, rather than a transparent, market-based interest rate that is known to both parties?

* Food and Agricultural Organization of the United Nations, Glossary of Terms for Agricultural Insurance and Rural Finance (Rome:  FAO, 1992).

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Ex-banker: Taliban funded by sharia finance

April 1, 2013

Muhammad Aamir, a retired Pakistani banker, admits that, “It is true that Taliban militants receive financial support through the Islamic banking system, but there is no proof because these illegal transactions are never properly investigated,” according to an article from Central Asia Online last week.

Muhammad Junaid, a banker currently working in Peshawar, says he is familiar with three account holders who work closely with terrorists receive over $50K monthly from Islamic banks.

Some financial sector employees disagree, but the evidence that sharia banks finance jihad has grown to the point where it is impossible to ignore.  Thanks to meankitteh for sending in this article, which frankly understates the scope of the problem:

Islamic banking: A conduit for terror funding?

Opinions differ on whether the financial network is being misused to funnel support to militants, but the system does have loopholes that would allow for it.

By Ashfaq Yusufzai

2013-03-27

PESHAWAR – Some worry that the Islamic banking model is open to potential misuse by those involved in funding terrorist activities, but opinions differ on whether the financial network is directly involved in such schemes.

The dividing line for the opinions seems to come down to how one is involved in the business.

“It is true that Taliban militants receive financial support through the Islamic banking system, but there is no proof because these illegal transactions are never properly investigated,” Muhammad Aamir, a retired banker, told Central Asia Online.

But Adnan Rasool, an Islamabad-based Islamic banking specialist with a state-owned bank, said it is “totally wrong” to say that the system helps terrorism.

“In Pakistan the share of Islamic banking has risen to 10%, which shows the public confidence in the system,” Adnan said. “We have more than 1,000 dedicated Islamic banks as well as more than 700 Islamic banking counters operated in conventional banks.”

Allegations arose in early 2001 that the system aided terrorism, but authorities couldn’t prove any of them, Adnan said, adding that Islamic banking has come of age worldwide and in Pakistan, where it has financed huge projects that benefit the people.

Why Islamic banking is vulnerable to terrorist misuse

Islamic banking, which began in the early 1970s, is a financial system that involves making loans without charging interest, in accordance with Sharia law. It is worth about US $2 trillion (Rs. 197 trillion) worldwide and has posted an annual growth rate of 15%.

Terrorists have long relied on various channels to finance their activities and Islamic banking is one option that terror supporters have used in the past, Aamir said, describing an example of suspected terror funding.

A resident of Hangu District received “a hefty amount through Islamic banks from different sources in the UAE, Saudi Arabia and other Islamic countries” in 2001, he said. “He was a common man who disappeared after the 9/11 incidents in New York and Washington.”

Police briefly investigated the case, he said, but nothing came of it.

Another banker also has suspicions about the system.

Muhammad Junaid, an employee of a private bank in Peshawar, agreed with the notion that Islamic banking is key to financing terror bids in Pakistan and elsewhere but said these illegal acts aren’t easily traceable.

“For instance, I knew three account-holders in our bank who each received about Rs. 5m (US $50,829) every month from some Muslim countries,” said Junaid. “The men – pretending to be getting the money for construction of mosques and religious seminaries – seemed to be hand-in-glove with terrorists.”

That is indicative of something suspicious, he said, because “one cannot believe that simple people have such frequent financial transactions through banks. But … there are no complaints from any quarter.” But again, proof is scant and Adnan stands by his industry.

“Islam strictly forbids terrorism in all its form and therefore Islamic banking seeks to promote Islamic values,” he said. “We have an internal system in Islamic banking that prevents the illegal investments and transactions; therefore, it is impossible to send the money through this network to terrorists.”

Islamic banking system has loopholes

Islamic banking was designed to follow Islamic values, Junaid said. In accordance with Sharia law, it is expected to avoid interest-based transactions and unethical practices while it helps boost the economy.

However, loopholes make it difficult to identify illegal transactions in the system, he said.

Pakistan began implementing the system in 1978, economist Jalal Khan, at the Institute of Management Studies at the University of Peshawar, said. Early measures included doing away with interest from the operations of specialised financial institutions – including the House Building Finance Co. Ltd., Investment Corporation of Pakistan and National Investment Trust Ltd. in July 1979 – a practice that extended to commercial banks in the 1980s.

The premise of interest-free loans, even though it goes along with Islamic ideals, has not protected the system from suspicion of links to terror funding, Shah Jehan, a banker at a private financial institution, told Central Asia Online.

Hawala, an informal system that allows fund transfers without much regulatory control, also was allegedly linked to terror financing, he said.

“Despite a hue and cry by global leaders spearheading the war against jihadist groups, new legal modes of transactions [including wire transfers] that have now replaced the hawala system are part of the Islamic banking system and have been lifelines for terrorists,” Jehan said…

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News on the money jihad: recommended reading

February 28, 2013

• The Muslim Brotherhood played midwife to the birth of contemporary Islamic banking.  All it took was $100 million, an open door policy in Luxembourg, and the blessings of a Saudi king… more>>

• Al Qaeda insurgents in Iraq were paid about $40 a month.  Hezbollah agents in Cyprus?  $600… more>>

• Their tunnels flooded, Gaza’s bulk cash smugglers search for a workaround.  Bank compliance officers, be forewarned… more>>

• Israel’s civil defense minister exposes the “real base” of Hezbollah’s revenues—Europe… more>>

• No longer content to tax coca farmers and drug traffickers, Peru’s Shining Path may target tourists for kidnapping.  Time to reconsider that trip to Machu Picchu… more>> (h/t Jose Maria Blanco)

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