Still no oversight of Gulf charities

March 31, 2010

NPR aired a story last week on the Taliban’s finances.  The media usually focus on the Taliban’s opium revenues, but this report was more helpful because it actually addresses the cash pipeline of zakat “donations” from the Persian Gulf to Afghanistan:

[T]here is a steady stream of cash that flows to the Taliban, wittingly or otherwise, from Muslim charities and religious institutions outside Afghanistan.

‘Charitable’ Donations

Haroun Mir, director of Afghanistan’s Center for Research and Policy Studies, says many of those donations come from the oil-rich countries that make up the Gulf Cooperation Council, or GCC.

“There [is] a network of charities in the GCC countries which directly support institutions in Pakistan which are supporting financially these extremist movements such as the Taliban,” Mir says. “And our estimates are in Afghanistan that between $150 [million] to $200 million every year reaches directly to Taliban via this network of charities that exists in the Gulf countries.”

Mir says he recently asked Bahrain’s foreign minister what can be done to halt the money flowing to the Taliban.

“He recognized the problem,” Mir says. “But he responded there is no mechanism in the region to monitor the transfer of charity funding. And I think it would be good if the United States government, in cooperation with the countries in the region, creates a mechanism in order to monitor. And he also mentioned licensing of the charity organizations.”

Analysts say that in a region where nongovernmental aid groups and charities operating domestically often face severe scrutiny and regulation, such lack of oversight on the religious charities seems a glaring omission.

Read or listen to the full report here.  What’s stunning above is the statement from Bahrain’s foreign minister, big boy Shaikh Khalid Bin Ahmed Bin Mohamed Al Khalifa, that “there is no mechanism in the region to monitor the transfer of charity funding.

This sounds like confirmation that Saudi requirements for SAMA to approve charitable transfers abroad are misleading or meaningless.  It’s also an admission that Bahrain hasn’t done much to regulate its own charitable sector.  This is not very reassuring when Bahrain had at least one state minister laundering up to $30 million and the country has no means of freezing illegally used assets.

U.S. Treasury and State Department officials need to do a much better job of cajoling the Gulf nations to regulate their charitable sectors.

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