A reader recently asked Money Jihad for information on terrorist financing based in the Netherlands. An examination of Dutch charities, the banking sector, and crime rings is necessary to begin understanding how terrorists have used the Netherlands to fund their activities.
Dutch zakat
The majority of terrorist financing problems in the Netherlands over the past decade have originated from the Islamic charitable sector, particularly from Dutch Muslim groups purporting to provide “relief” in the Palestinian territories.
In 2003, the Dutch blocked Al-Aqsa Foundation assets in the Netherlands after discovering that Al-Aqsa funded terrorism in the Middle East. A previous manager of Al-Aqsa in the Netherlands, Amin Abu Rashed, was recently described by a financial crimes expert as, “the principal representative of Hamas in Holland.” Al Haramain Islamic Foundation, the Saudi-based terror front charity, was once active in the Netherlands as well.
Palestinian terror funding probably shifted after the Al-Aqsa closure to Internationale Steun Rechtstreeks Aan Armen (ISRAA). ISRAA remains active in the Palestinian territories and Syria, and maintains tax-exempt status in the Netherlands.
In April 2011, the Netherlands froze the assets of the Dutch branch of the Turkish, pro-Hamas charity IHH. A court later overturned the freeze, and IHH Nederland continues to operate in Holland.
Islamic Relief Nederland, a chapter of Islamic Relief Worldwide, is involved at least indirectly in the financing of terrorism through its parent organization. IRW has previously funded Hamas and Al Qaeda operatives. Like ISRAA, IR Nederland is currently active in Syria.
Groups linked with the Muslim Brotherhood in the Netherlands have used domestic and foreign funds to finance their projects. Dutch intelligence revealed in 2010 that Salafi networks exploit generous Dutch public benefit programs to fund their own activities. Europe Trust Netherlands (ETN), a leading Dutch-Muslim group, has worked with Muslim Brotherhood leaders last year to arrange Gulf-based financing for the controversial Blue Mosque project in Amsterdam.
Banking sector threats
The large Dutch banking sector, which includes internationally known firms such as ING (which settled with U.S. authorities in 2012 over Cuban and Iranian sanctions violations), has probably been a factor in drawing some terrorist financiers and interlocutors to have a presence in the Netherlands. After 9/11, it was reported that the Al Rajhi banking family, whose patriarch was named in the Golden Chain document for funding Osama Bin Laden, reportedly maintained “a large portion of their funding from the Netherlands. The family owns an investment company in Amsterdam, which has funded ‘islamic investments’ for well over a billion dollars.”
The Islamic finance sector in the Netherlands is also a source of concern. Islamic finance has been documented as a sector marred by a lack of transparency and an increased risk of diverting profits toward terrorism as a form of corporate zakat.
Financial crimes and smuggling
Illicit transfers for terrorism based in the Netherlands have also taken place among criminal rings of various sizes. Tamil Tiger terrorists have used the Netherlands as a funding base with front organizations operating there. The trade in khat, a stimulant that is legal to import in the Netherlands, has been known for several years to fund the al-Shabaab terrorist organization in Somalia. More recently, Sunni donors have transferred funds from the Netherlands for jihad in Yemen. Meanwhile, a Dutch fugitive from Panamanian justice, Okke Ornstein, is subject to an INTERPOL red notice and is probably involved with laundering money for Hamas.
Lastly, it should be noted that former Dutch dependencies which have relaxed regulatory climates may also be susceptible to abuse for financial crimes. Hezbollah allegedly maintains bank accounts in the Dutch Antilles. Khalid Bin Mahfouz (the Saudi billionaire who sued Rachel Ehrenfeld for reporting that he funded terrorism), once parked money in the Dutch Antilles in a company called Pathfinder Investments, according to the Wall Street Journal. Pathfinder funds were subsequently transferred to the Success Foundation, a Virginia-based front charity for the International Islamic Relief Organization, a Saudi-backed office which was closed after 9/11 for its role in financing Al Qaeda.
India’s currency change combats counterfeiting, but backdoor still wide open for money laundering
February 28, 2014An email from our old friend Puneet aprised us to a new initiative in India to replace old currency notes with new notes with enhanced security features.
The reason for the change is speculated by many, including the BBC, to reduce the flow of black money (including undeclared, untaxed, counterfeit, and laundered money) through India’s economy.
Indeed, counterfeiting is a national crisis in India, and the new security features on the bills should help reduce the ability of counterfeiters to replicate the notes.
But in terms of getting illegally acquired but genuine notes off the street, this program doesn’t do much to cleanse the economy from the scourage of black money.
Live Mint points out that anybody who wants to exchange their old bills for new ones will be able to do so, and they won’t have to divulge their identities:
Also, Money Jihad notes that there doesn’t seem to be any provision in the new currency roll-out for bank tellers to report unusual amounts of cash that are brought in for exchange, or for them to report exchanges that they suspect are being made on behalf of undisclosed third parties. Officials should move to incorporate such safeguards.
Posted in News commentary | Tagged counterfeiting, currency, India, know your customer, SAR | Leave a Comment »