Archive for the ‘Columns, essays, & opinion’ Category

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5 terror finance predictions for 2016

January 11, 2016
  • TrendMicro says2016 will be the year of online extortion.” Rather than simply holding data for ransom, hackers will threaten to divulge personal information about users if a ransom isn’t paid. Cyber-criminals will use the psychology of fear to a greater extent than ever before through ransomware.
  • Enhanced financial monitoring in EU. This is as much of a reflection on 2015 as it is a prediction for 2016, but second-generation Muslim immigrants will continue returning from the Syrian front to Europe. Domestic intelligence services will be too under-resourced to monitor all of the jihadist returnees. A British psychic website goes as far as to predict a terrorist attempt to assassinate Chancellor Angela Merkel. While there is no way of predicting such a thing, it does seem that since Germany has been such a favored destination for Middle Eastern transients, Germany could very well be targeted by ISIS operatives for a major operation. German authorities would do well to beef up customs and border searches for the possibility of bulk smuggled cash and to increase monitoring by undercover agents of black market firearms purchases by suspected Islamists.
  • Forecasters are predicting a modest rebound but a continued low price for oil in 2016. This will put pressure on the budgets of the Arab Gulf monarchies. It should also mean that they’ll have less money to export Wahhabism and fund Islamist rebellions.
  • Expect Washington to promulgate more counter-terror finance regulations that paint with a broad brush. Compliance officer Doug Cornelius predicts that “FinCEN will come out with new regulations imposing anti-money laundering requirements on investment advisors and fund managers.”
  • Taliban spending spurt. There are mixed predictions for the Taliban in 2016. Some analysts predict that the Taliban will topple the Afghan government again, while others predict that the leadership scuffle in the wake of Mullah Omar’s reported death, the rival appeal of ISIS in Afghanistan, the strength of Afghan security forces, could weaken the Taliban or force it to a negotiated settlement. Sensing that it’s do or die for the Taliban, Money Jihad predicts they’ll employ more aggressive and audacious tactics, and they’ll be willing to expend hundreds of millions of dollars for their militant operations in 2016.
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10 biggest terror finance news stories of 2015

January 4, 2016
  1. Funding of Paris attacks

The November 2015 attackers paid for $32,000 worth of pre-attack operations including hotel lodging and car rentals through anonymous prepaid cards purchased in Belgium. Payments were loaded in small increments; rules for prepaid cards allow for reloading up to $2,500 without identity verification. Although the Islamic State of Iraq and Syria (ISIS) is responsible for the attacks and the training of several attackers, the precise source of the $32,000 is less clear. Money for travel appears to have become available after a stopover in Greece.

  1. Nuclear deal will release billions to Iran

The nuclear agreement that President Obama signed will release $100 billion to $150 billion of frozen assets to Iran, a state sponsor of terrorism. Hopefully the asset thaw will get gummed up in court while attorneys seek to collect the compensation that is owed to the victims of Iranian-sponsored terrorism first.

  1. Wahhabi funding monarch takes power

Saudi Arabia has crowned a new king, Salman bin Abdulaziz, who started his career in public service by bankrolling the exportation of radical Wahhabism throughout the Islamic world. We will be contending with well-funded terrorist groups for as long as men such as Salman rule Arabia.

  1. Coalition bombs ISIS oil fields

According to news reports, the U.S. is increasing pressure against ISIS’s financial assets by bombing oil fields in their territory. If true, the bombing means that the Obama administration has begun to recognize that it is worth destroying oil infrastructure to deprive ISIS of funding even if it means it will be harder to rebuild the infrastructure when and if ISIS retreats.

  1. Son of terror victim sues wire transfer company

The son of a slain Somali politician and singing star is suing the money transfer company Dahabshiil for its alleged involvement in issuing a bounty for the singer’s murder. Saado Ali Warsame had sung a song denouncing Dahabshiil as a financier of terror and a profiteer from inter-tribal conflict.

  1. Jihadists in Yemen fund Charlie Hebdo assassins

Al Qaeda in the Arabian Peninsula (AQAP) gave $20,000 to future Charlie Hebdo attacker Said Kouachi before he and his brother left Yemen in August 2011. The foreign funding helps explain how a group of underemployed ex-cons were able to buy AK-47s for their January 2015 attacks and pay for Said Kouachi’s international travels.

  1. PA and PLO owe damages for terror attacks

A jury found the Palestinian Authority and the PLO liable for terrorist attacks with American victims in the early 2000s, with damages set at $656 million in Sokolow v. PLO. A federal judge set $10 million bond while the PA and PLO appeal.

  1. Taliban takes control of more turf

The Washington Post reports that the Taliban has taken control or maintains a significant presence in 30 percent of Afghanistan—the most territory it has occupied since 2001. The problem with this from a financial standpoint is that the Taliban lives off the land. One of their primary sources of income is taxation on commercial activity in the areas they control. More turf means more money.

  1. Arab Bank settles with terror victims

Arab Bank PLC provided client services to Hamas affiliates which funded terrorist attacks against Israel. After years of lawsuits, the settlement was reached between the bank and American victims of these terrorist attacks, possibly for $1 billion. Together with the Sokolow, these cases show that legal tactics can be used effectively to hit terrorists where it hurts: their wallets.

  1. Debt-financing of San Bernadino attack

Syed Rizwan Farook took out a $28,000 debt consolidation loan weeks before waging an assault against his victims. This method of financing attacks is particularly popular among jihadists living in Western countries where easy credit is, well, easy.

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Terror tycoon sheltered by our “partner”

August 3, 2015

Pakistan, an alleged “partner” of the U.S., is sheltering yet another international terrorist.  This time it’s not Osama Bin Laden or Mullah Omar, but underworld kingpin and terrorist financier Dawood Ibrahim.

France often serves as a waiting area for revolutionaries before they go back to their home countries.  Saudi Arabia is often a flophouse for deposed Arab dictators.  Now we know who Pakistan likes hosting the most–fundamentalist Islamic madmen who murder civilians at will.

From the Sunday Guardian (h/t El Grillo):

Dawood hiding in plain sight with new identity: US experts

MADHAV NALAPAT New York | 25th Jul 2015

Experts in counter-terrorism activities say that there is “credible information that India’s most wanted person”, Dawood Ibrahim Kaskar, aka Sheikh Dawood Hassan, who, ironically, was the son of a Mumbai police constable of known integrity, “was in March 2003 given a new identity and accompanying papers by the ISI, in order to reduce the chances of detection and to facilitate his travel to multiple locations across the globe, including South Africa, Malaysia, Thailand, Hong Kong, Portugal and Dubai”. They say that this identity change was carried out once it was confirmed that the United States (responding to repeated requests by the A.B. Vajpayee government at the level of Home Minister L.K. Advani and National Security Advisor Brajesh Mishra) would declare Dawood a Specially Designated International Terrorist. This was done in October 2003, or six months after Dawood’s identity makeover. According to these sources, “such a step had no effect on Dawood’s international operations, both business and terror-related”, in view of the fact that he was thereby enabled to travel safely to multiple locations through use of the documents prepared for him by the ISI. They claim that Dawood was made aware in advance — presumably by the Pakistan authorities — that he would be labelled an international terrorist by the US. Responding to this, towards the close of 2002 itself, the canny fugitive had transferred properties which were in his name to nominees and benamis, so that nothing of any value was seized anywhere in the world, including in India, where he has substantial assets, especially in Mumbai and Hyderabad.

Terrorism, hawala and narcotics go hand in hand in Dawood’s business empire, which at its peak had an estimated annual turnover of $4 billion in value before beginning a decline around 2007, because of increased US tracking of his assets and the financial networks operating on his behalf in Hong Kong and Singapore. The heightened interest was because of the expansion of operations of the LeT to Europe. “During 2006-2011, (Dawood) sold much of his international businesses and relocated some assets to India and most to Pakistan”, these US-based sources claimed, adding that there was little effective countering of Dawood’s operations in India during the period in office of both Prime Ministers Vajpayee and Manmohan Singh. But they added that “the heat has increased after (Prime Minister) Modi took over in 2014”. During Narendra Modi’s visit to the US in September 2014, National Security Advisor (NSA) Ajit Doval stayed an extra two days in Washington “mainly to work out ways of capturing or otherwise incapacitating Dawood”. They add that Doval told his US interlocutors that he had been on the fugitive’s trail for two decades, and that he wanted to ensure success in the hunt during his tenure in office as the NSA.

However, the problem facing the sleuths in India is that the mastermind of the 1993 Mumbai bomb blasts has been travelling under a new legal identity since 2003, and has adopted a very low profile, shunning the high-profile events he was earlier seen in, “although he retains his contacts with Bollywood and is working to ensure through his contacts that favourites of his be given meaty roles”. They say that sports and movies are his favourite hobbies, as well as being money-spinners, mainly through match-fixing in the case of the first and influence over distribution networks in the subcontinent in the case of the second.

These sources claim that “the 26/11 attack could not have succeeded the way it did but for longstanding contacts within the Mumbai police and state political network of Dawood and his close associates”. They claim that “high-level politicians, afraid of being implicated through Dawood ensured that the domestic angle was never seriously probed by the police following the blasts”, with the bulk of attention being focused on captured operative Ajmal Kasab and his contacts in Pakistan…

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EU to delist IRGC subsidiary in Iran deal

July 28, 2015

One of several poison pills in the pages of the nuclear agreement with Iran is an offer to lift sanctions on an Iranian construction company controlled by the Islamic Revolutionary Guard Corps (IRGC).  The maneuver would enrich the IRGC front company and strengthen the IRGC’s political and economic stranglehold over public life in Iran.  Money made by the construction company will also be funneled into terrorism by the IRGC.  From Ali Alfoneh of the Foundation for Defense of Democracies (h/t @skinroller):

EU Delisting of IRGC Construction Giant Will Boost Terror Financing

Ali Alfoneh
27th July 2015 – FDD Policy Brief

The Iran nuclear deal signed July 14 stipulates that eight years after its implementation, the European Union will delist a construction conglomerate owned by the Islamic Revolutionary Guard Corps (IRGC). In so doing, the EU will inject a massive cash flow into one of the IRGC’s other primary industries: terrorism.

Khatam al-Anbia (literally, “Seal of the Prophets”) was born as an IRGC engineering corps during the Iran-Iraq War (1980-1988), building trenches and fortifications. Since then, it has developed into the largest contracting company in Iran – potentially even the country’s largest firm outright – benefitting from government contracts on a no-bid basis.  Its projects now include developing Iran’s massive South Pars gas field, building a pipeline to Pakistan, and a Tehran metro line, to name a few.

In 2010, the U.S. Treasury sanctioned the conglomerate, citing declassified intelligence that the profits from its activities “support the full range of the IRGC’s illicit activities, including WMD proliferation and support for terrorism.”

The demise of Hassan Shateri, the head of Khatam al-Anbia’s Lebanon branch, is a case in point. On February 12, 2013, Shateri was killed while accompanying an arms convoy en route from Syria to Lebanon – allegedly in an airstrike by Israeli jets. Details soon emerged that he was heading efforts to replenish Hezbollah’s missile arsenal and its launch sites along the Israeli border. Shateri, reports revealed, was actually a commander of the Quds Force, the IRGC external arm responsible for “exporting the revolution” worldwide…

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What can be done: looting counter-offensive

July 21, 2015

Deutsche Welle has interviewed archeologist Mark Altaweel about the Islamic State of Iraq’s plundering of antiquities.  DW asked Altaweel what can be done to help stop this problem, and he offered some good ideas:

First, try to learn a little bit from blood diamonds – put a stigma on these things so that people are not buying ancient antiquities. It’s hard to say for a lot of these things if they are truly coming from Syria or Iraq. I think if we put a negative stigma on buying antiquities – that would help. It’s not completely possible for the police to control this.

Second, I do think we need some kind of high-profile police action to put a little more deterrence and certainly tighten up the laws and continue to pressure countries like Turkey and Lebanon [to stop] receiving these objects near their borders. I know Turkey has been clamping down a little more lately, which is good. But Lebanon certainly needs to be held accountable.

Good point.  A UN resolution and a lawsuit by a dig site in Iraq against a museum in Istanbul or Beirut won’t get very far very fast.  But putting some dealers in jail immediately would make a definite impression.  Or arrest some of the middlemen smugglers and get them to turn against their overlords.

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Financial system compromised by Iran deal

July 20, 2015

The deal with Iran doesn’t just give a murderous regime $100 billion in sanctions relief.  It gives them ongoing access to the international financial system.  It will make their funding of Hezbollah, Hamas, and the Islamic Revolutionary Guard Corps so much easier.  Expert analysis from Mark Dubowitz and Jonathan Schanzer writing in Foreign Policy last week:

It Just Got Easier for Iran to Fund Terrorism

Iran’s supreme leader, Ayatollah Ali Khamenei, did not enter into Tuesday’s historic deal with six world powers to reset relations with the West. It was the promise of more than $100 billion in sanctions relief, rather, that greased the wheels of the recently completed diplomacy in Vienna. And though the windfall of cash will certainly strengthen its position, the real prize for Iran was regaining access to a little-known, but ubiquitous banking system that has been off-limits to the country since March 2012.

SWIFT, the Society for Worldwide Interbank Financial Telecommunication, is the electronic bloodstream of the global financial system. It is a member-owned cooperative comprising the most powerful financial institutions in the world, which allows more than 10,800 financial companies worldwide to communicate securely. It’s hard to find a bank that doesn’t use SWIFT to communicate with other banks — unless, of course, you’ve lived in Iran for the past few years.

SWIFT disconnected 15 Iranian banks from its system in 2012 after coming under pressure from both the United States and the European Union at the height of the effort to curb Iran’s nuclear ambitions. It was a major blow to Tehran. Sure, it was how Iran sold oil, but it was also how Iranian banks moved money. According to SWIFT’s annual review, Iranian financial institutions used SWIFT more than 2 million times in 2010. These transactions, according to the Wall Street Journal, amounted to $35 billion in trade with Europe alone.

SWIFT is now poised to let those 15 banned Iranian banks, including the Central Bank of Iran, back in. But the move is controversial, to put it mildly. The system is subject to EU laws and international banking standards, which are unambiguous about terrorism finance. Deal or no deal, Iran remains a threat because of its past financing of terrorist networks. As recently as this past June, the Financial Action Task Force, a global anti-money laundering and anti-terrorism finance standards body, warned that Iran’s “failure to address the risk of terrorist financing” poses a “serious threat … to the integrity of the international financial system.”

Even U.S. President Barack Obama at his press conference this week acknowledged Iran’s “support for terrorism” and “its use of proxies to destabilize parts of the Middle East.” With Iran re-connected to SWIFT, it will be poised to more easily move funds to terrorists’ coffers, foment conflict around the region, and possibly even procure equipment for a clandestine weapons program, should it choose to violate the nuclear deal.

“De-SWIFTing” Iran did not happen without controversy. But under congressional pressure, Obama administration and EU officials eventually agreed to take the step in mid-2012. Around the same time, the White House began its back channel nuclear negotiations with Iran. This was no coincidence: Cut off from the formal financial sector, Iran was desperate for a way back in. The Obama administration saw this as an opportunity. Secret talks led to public negotiations in October 2013 and the announcement of an interim agreement one month later.

So long as the Iranians continued to engage in dialogue, the P5+1 world powers agreed to provide sanctions relief. Direct sanctions relief under the Joint Plan of Action, the interim deal signed in November 2013, yielded the Iranian regime a total of $11.9 billion from frozen oil revenues, allowing the country to replenish its dwindling foreign exchange reserves. This contributed to a modest economic recovery in 2014 and 2015, but the pressure from sanctions remained, and Iran’s economy remained stymied.

“Without SWIFT, there was nowhere to spend [the sanctions relief],” one U.S. government official told us in April. “The Iranians have been complaining to us throughout the JPOA process that sanctions relief means little without the ability to bank.”

It is no coincidence, then, that the deal explicitly calls for the banks that were originally banned from SWIFT to be allowed back into the system. SWIFT issued a release on Tuesday afternoon in response to the announcement, stating that it “is aware of the Joint Comprehensive Plan of Action and the potential sanctions relief this may entail.”

For the time being, however, the financial messaging service noted that “all the current EU sanctions remain in place…. Any decision to lift sanctions on countries or individual entities rests solely with the competent government bodies and applicable legislators.”

In plain English, SWIFT is putting the onus on the EU to assume the burden of the decision of whether Iran will be reintegrated into its system. So, upon “Implementation Day” — when the International Atomic Energy Agency verifies that Iran has fulfilled the implementation of specified nuclear measures — the EU will be obliged to order SWIFT to readmit Iran’s banks.

While Iran’s readmission to SWIFT is underway, Iranian banks will also get a boost from a provision in the agreement that calls for the United States to delist the Central Bank of Iran. This is no small matter. In 2011, invoking Section 311 of the Patriot Act, the U.S. Treasury took the extraordinary step of designating the entire “Islamic Republic of Iran [as] a jurisdiction of primary money laundering concern.” The Treasury cited Iran’s “support for terrorism,” “pursuit of weapons of mass destruction,” and “deceptive financial practices” as reasons for the action. It specifically targeted Iran’s Central Bank and made it clear that the entire country’s financial system posed “illicit finance risks for the global financial system”…

…To make matters worse, the agreement just reached in Vienna grants more than $100 billion in cash to Iran, which could flow to the coffers of terrorist groups and rogue actors like Hezbollah, Hamas, Palestinian Islamic Jihad, the Houthis, and Syrian President Bashar al-Assad’s regime in Damascus. At the president’s press conference on Wednesday, Obama dismissed this fear, claiming the money would not be a “game-changer” for Iran. It’s hard to understand his logic: This infusion of cash will relieve budgetary constraints for a country already spending at least $6 billion annually to support Assad. For a country with only $20 billion in fully accessible foreign exchange reserves prior to November 2013, this is hugely significant.More importantly, the relaxed banking standards will grant the Iranian regime the ability to move its money anywhere in the world. With EU sanctions also set to be lifted on Iran’s Islamic Revolutionary Guard Corps, major IRGC companies and banks, and the Quds Force, the IRGC’s extraterritorial terrorist arm, Europe will become an economic free zone for Iran’s terrorist activity…

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Turkey’s 2014 surge of exports to Syria coincided with surge of of ISIS

July 10, 2015

A recent research paper on the Syrian economy included an instructive revelation.  Chatham House fellow Hayder al-Khoei drew special attention in a tweet to the off-hand but crucial finding in the report: that Syria’s economy grew 80 percent in 2014 due to a spike in Turkish imports that coincided with the rise of the Islamic State of Iraq and Syria.  Specifically, the report found:

… It is not clear what caused this surge in Turkish exports, but it coincided with the height of the advances by ISIS in both Iraq and Syria, and some of the additional sales could have been accounted for by additional procurement from Turkey by ISIS – for example steel pipes and sections for oil refining projects…  (p. 26)

It won’t be proven in a court of law, but it is clear what Chatham House is suggesting.  It is clear what readers will take from this.  And it has been clear for some time that ISIS would not have been able to surge to such a dominant position in Iraq without extensive cross-border Turkish support.  Money Jihad reported on the very phenomenon of Turkey’s contributions to ISIS almost to the day one year ago.

Hat tip to Moscow Ghost.