Archive for the ‘News commentary’ Category

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Turkey guts cash screening at customs

May 18, 2015

Turkey has revised its customs regulations to the point where one Turkish headline described it as “Unlimited cash entry into Turkey now legalized.” Turkey said the regulations are an improvement compared to the old policy, but experts contacted by Al-Monitor said there was nothing wrong with the previous regulations.

What’s so problematic about this development is that Turkey has been used as a key transit point for money and fighters for the Islamic State of Iraq and Syria. And that was when there were at least some nominal controls at customs points. Now it appears to be open season.

The other rotten element of this story is that Turkey appears to have waited to change these regulations until just after they came off of the international financial watchdog FATF’s grey list. It’s as though they knew they couldn’t get de-listed with regulations like these, so the bided their time.

Read all about it (h/t @moscow_ghost):

No questions asked about Turkey’s suitcases full of cash

Author Pinar Tremblay Posted May 14, 2015

The Turkish Ministry of Customs and Trade issued new regulations April 15 for entering and leaving Turkey with any amount of cash. The new Customs Code had passed without much public attention until early May, when the news broke with the headlines “Hot money days are over, now starts the black money days” and “Unlimited cash entry into Turkey now legalized.”

Umut Oran, deputy of the main opposition Republican People’s Party (CHP), submitted a parliamentarian query asking why the previous Customs Code was replaced with the new code, which would enable suspicious financial transactions, thus increasing the risk for money laundering, terror financing and tax evasion.

In a rather foggy statement, Minister of Customs and Trade Nurettin Canikli said the previous code was unclear, adding there were contradictory clauses in the code, and customs personnel could not be flexible. He said they had only simplified the code. “We had many complaints from exporters bringing money into the country,” Canikli said. “It could be from various countries, such as Iran, Iraq, Syria, the Balkans, where there are no banking services. Frankly, why does it matter if the money comes in cash or through a bank as long as it is money earned from exports? If this is dirty money, it will not be allowed to enter the country. There are no changes with regard to unrecorded cash.”

Yet, all pundits whom Al-Monitor contacted — bankers, customs officials, economists, senior economy editors of reputable news networks — agreed that the vagueness was introduced with the new code, and none were able to see what was wrong with the old code.

The previous Customs Code, which was six pages, was seen as compatible with EU regulations. When questioned about the compatibility of the 2015 codes with the EU, Canikli said, “We are not a member of the EU, we are Turkey.”

Indeed, there is sufficient reason to worry about the 2015 Customs Code, which is two pages shorter than the 2013 version. Yet, with those two deleted pages are red flags. Turkey has been on the gray list of the Financial Action Task Force (FATF) since 2011. The FATF took Turkey off its list of high-risk and non-cooperative jurisdictions only in October 2014. Turkey came to the brink of suspension of its membership in the FATF in October 2012. In its latest report, the FATF was still concerned with Turkey’s ability to institute a system that would identify and freeze terrorist assets. The report warned about Turkey’s definitions for “terrorism financing” and stated that Turkey’s procedures for freezing the assets of identified groups were too slow.

Emin Capa, CNN Turk’s senior economy editor, told Al-Monitor, “Turkey worked real hard to get off the gray list of the FATF. I doubt the government would enact any legislation that would reverse the decision.” Yet Capa had serious concerns about the new code. “There are three troubling topics. First, the sentence ‘passenger cannot be compelled to make a declaration at customs.’ What does this mean?” he asked. This line was added to the updated 2015 Customs Code, while many other items were excised. This line is indeed contradictory with the inspection regime…

 

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Hamas campus on Swedish dole

May 13, 2015

Nearly 60 million Swedish crowns flowed last year from Sweden’s taxpayers through the international charity Islamic Relief to programs in the Palestinian territories that blur the lines between social services and the financing Hamas operatives. From the opinion pages of Arutz Sheva:

Op-Ed: The Connection between Swedish Aid and Hamas Institutions

Sweden’s taxpayers are funding organizations that have names like Islamic Relief, but promote war and terror instead of welfare and peace.

Published: Wednesday, April 29, 2015 4:20 AM

The Swedish International Development Cooperation Agency (SIDA), which comes under the Swedish foreign ministry, has for several years cooperated with the organization Islamic Relief (IR). According to the SIDA documentation, SIDA renewed its agreement with IR last year giving the international organization more than 59 million SEK(6,8 million USD) for various aid projects.

However IR is not only an organization associated with aid. It is also associated with the Muslim Brotherhood and with funding terror organizations, and therefore terror-listed by the United Arab Emirates since last year. In 2006 the Israeli authorities were notified of  IR’s terror connections, resulting in the arrest of IR’s project manager at that time. Iyaz Ali. Ali confessed that he was in contact with the Hamas and had transferred funds to organizations linked to Hamas.

Since June, 19, 2014 IR has been forbidden to work from within Israel, including Judea and Samaria (the “West Bank”). Israeli Defense Minister Moshe Ya’alon said in a statement, that IR is a source of funds for Hamas and that Israel has no intention of allowing it to operate and assist terrorist activity against Israel.  According to the Israeli Foreign ministry, IR’s activities in Judea and Samaria and Gaza were carried out by social welfare organizations controlled and staffed by Hamas operatives. The intensive activities of these associations have been designed to further Hamas’s ideology among the Palestinian Arab population, the Israeli Ministry of Foreign Affairs states.

After the Israeli ban, IR last year commissioned an “independent investigation” of its office departments and activities in the Palestinian “territories”. The investigation found no evidence of links to Hamas. However, the investigation took place long after the accusations against the organization were publicized and did not cover the entire international organization.

Criticism against the IR has also been made by the Gatestone Institute, a New York-based think tank, revealing that current Islamic Relief Worldwide board members have links to anti-Semitic and Islamist movements.

In the IR’s aid project Emergency Cash-for-Work, which was funded by SIDA between 2008-2014 with over 32 million SEK (3,69 USD), internships for unemployed academics were arranged in Gaza institutions and organizations. Islamic University of Gaza (IUG), founded by Hamas spiritual leader Sheikh Ahmed Yassin, is one of the institutions that has benefited from these unemployed academics. To date, the university is governed by Hamas members and activists.

At IUG, Hamas developed its Qassam rockets and the campus store sells assorted Hamas propaganda and DVD movies that pay tribute to terrorism. Additionally, televised anti-Semitic plays have taken place at the university. Sixteen of the teachers and lecturers at the university are elected Hamas politicians and many of the Hamas elite have either lectured or studied at IUG.

To top it off, the internationally notorious, anti-Semitic Islamic preacher Yusuf al Qaradawi, who advocates for terror attacks against Israeli civilians (including babies), has become IUG’s own Honorary Doctor.

In other words: Sweden has provided a labor force for a university that is a terrorist and anti-Semitic stronghold for Hamas, and has paid for it. Swedish tax money has paid the wages of academics in universities like IUG, is supposed to help hospitals and institutions in local municipalities.  Instead of using that money for job creation and true peace efforts for the people in Gaza, Hamas has used it on weapons and terror tunnels…

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30 sugar smugglers ID’d as al-Shabaab financiers

May 8, 2015

Money Jihad readers may recall that Kenya recently sanctioned 86 people and 13 money transfer companies for their financial ties to the Somali terrorist group al-Shabaab. It has since been revealed that 30 of the sanctioned individuals are sugar smugglers. (Hat tips to Chris Pariso and El Grillo.)

The Star reports:

…A confidential government report seen by the Star says: “Most of the smuggled sugar enters the country [Kenya] from areas controlled by al Shabaab in Somalia. The sugar barons pay illegal levies (or protection fees) to al Shabaab, who in turn uses the proceeds to fund terrorist activities/operations…

Imposing taxes on businesses is a common al-Shabaab tactic. They do it on the charcoal supply chain, the telecommunications sector, the remittance industry, etc.  Sugar and charcoal tax rates are often based on the rate set for zakat in the Koran:  2½ percent.  Money Jihad has previously covered how lucrative the sugar trade has been for al-Shabaab here.

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Iran pays $2m more to Gaza martyrs’ families

May 5, 2015

Al-Ansar Charity Association, a financial intermediary between Iran and the terrorist group Palestinian Islamic Jihad, has announced through social media that it will distribute $2 million to the families of shahids (martyrs for Islam) who died while fighting Israel from 2000 to 2014. This money is over and above the $900,000 Al-Ansar promised in January to the families of terrorists who died fighting Israel during the latter half of 2014.

Al-Ansar’s background and their announcement were uncovered by this report from The Meir Amit Intelligence and Terrorism Information Center last week (with thanks to @skinroller and @El_Grillo1):

  1. The Al-Ansar charity association operates in the Gaza Strip and is affiliated with the Palestinian Islamic Jihad (PIJ). It was founded during the second intifada (2001) and serves the Iranians as a pipeline for funds to finance terrorism in the Gaza Strip and as a way to increase Iran’s influence over the Gazan population. Al-Ansar supports the families of terrorists who were killed (“shaheeds”), families whose houses were destroyed, and families of terrorist operatives imprisoned in Israel. In the past, it also supported the families of shaheeds in Judea and Samaria, with the authorization and sponsorship of Mahmoud Abbas. It is uncertain if it continues to do so today, and if it does, how the funds are delivered (See Appendices A and B).
  2. The PIJ, the second most important Palestinian terrorist organization in the Gaza Strip, is Iran’s preferred Palestinian terrorist organization. Iran supports the PIJ both financially and militarily (providing weapons, training, technological knowledge, etc.). Iran transfers large sums of money, up to several mission dollars a year, to the Al-Ansar charity association through the Palestinian branch of the Iranian Martyrs Foundation (established in Iran by the Ayatollah Khomeini to aid and support the families of Iranians killed in the Iran-Iraq War). The Iranian Martyrs Foundation has two branches in Lebanon, a Lebanese branch that supports Hezbollah and a Palestinian branch that supports Hamas and the PIJ (See Appendix B for information about the Iranian Martyr’s Foundation and its Palestinian branch). The funds for the Palestinians are probably transferred from Lebanon to the Gaza Strip by bank transfer but it is not clear which banks are involved.
  3. Since the days of the second intifada, the radical Islamist “charitable societies” operating in the Gaza Strip, Judea and Samaria have served as pipelines for Iran to transfer funds to the Palestinian terrorist organizations. The money finances the terrorist organizations’ social network (mosques, educational institutions, support for the families of shaheeds), especially those of Hamas and the PIJ. Past experience has shown that the funds earmarked for the social network can easily be diverted to the military-terrorist wings of the various terrorist organizations. Thus the Iranian Islamic regime provided religious legitimacy for the money transferred to support Palestinian terrorism (according to the Ayatollah Khomeini, Muslim charity funds could be given to support the Palestinians).
  4. Al-Ansar, which receives funds from the Iranian Martyrs Foundation, was outlawed in Israel in 2003. It is headed by a PIJ activist named Nafez Othman Abd al-Rahman al-A’raj (Abu Suheib). His brother Omar al-A’raj was a senior PIJ military-terrorist operative, killed in 1996 during a Palestinian Authority (PA) attempt to detain him in the Gaza Strip. (Omar al-A’raj founded the PIJ’s military-terrorist network and was in charge of manufacturing IEDs for a series of deadly attacks carried out in Israel). In 2007 the Iranian Martyrs Foundation and its branches in Lebanon were designated as sponsors of terrorism by the United States Department of the Treasury because they provided Hezbollah, Hamas and the PIJ with financial support (See below).
  5. On April 12, 2015, the Al-Ansar charity association in the Gaza Strip announced that $2 million would be distributed among 5,000 families of Gazan shaheeds who had died between the beginning of the second intifada (2000) and June 31, 2014, that is, before the outbreak of Operation Protective Edge (Alansar.ps, April 12, 2015). On April 5, 2015, Al-Ansar said in a statement that the financial support was funded by the Palestinian branch of the Iranian Martyrs Foundation (Facebook page of Al-Ansar, April 5, 2015).
  6. On January 18, 2015, Al-Ansar in the Gaza Strip posted a notice on its Facebook page to Gazans whose family members had been killed in Operation Protective Edge and who had not yet registered with the society. They were requested to go to the Al-Ansar offices with a death certificate, a picture of the deceased, medical reports, and similar relevant documents, so that the transfer of funds could be arranged (Facebook page of Al-Ansar, February 11, 2005). In ITIC assessment, based on an average payment of $400 per family, the Iranian Martyrs Foundation can be expected to transfer an additional $900,000 for the families of Gazans killed in Operation Protective Edge (for approximately 2,200 families) once registration and bureaucratic procedures have been completed. Payment will mainly be made through branches of the post office in the Gaza Strip.
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Uganda’s police chief to probe remitters

May 3, 2015

The head of Uganda’s national police force said they will investigate money services businesses (MSBs) after Kenya suspended 13 MSBs alleged to finance the terrorist group al-Shabaab in Somalia. Several of those same companies operating in Somalia and Kenya also do business in Uganda.  Dahabshiil is probably the most prominent of the money transfer companies identified.

From the Kampala Observer via All Africa (h/t Chris Pariso):

Police chief Kale Kayihura has said they are to investigate transactions of money transfer companies here, after evidence in Kenya suggested that some were being used to channel money for financing terrorism.

Speaking in Kampala last week, Kayihura said some of the transfer companies under investigation in Kenya are affiliated to some institutions in Uganda. According to an April 14 gazette notice issued under Kenya’s Prevention of Terrorism Act and signed by police chief Joseph Boinnet, money transfer companies topped the list of 86 accounts alleged to fund terror groups.

The notable money transfer companies mentioned include Dahabshiil, which has agent locations and branches in 126 countries worldwide, including Uganda. Another mentioned company is Kendy Money Transfer Limited, which launched its money transfer services in Kenya last September…

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Half of Pakistani hawala dealers are unlicensed

April 28, 2015

The U.S. State Department’s international narcotics report for 2015 says that half of remittances sent from the diaspora back home were processed by hawala dealers. Hawala is the traditional Islamic method of transferring funds. Hawala is also a preferred method of sending money among terrorist groups because of the difficulty in tracing such transfers. The remittances handled by hawala amount to $9 billion according to the report:

From January through November 2014, the Pakistani diaspora legitimately remitted approximately $18 billion back to Pakistan via the formal banking sector. Though it is illegal to change foreign currency without a license, unlicensed hawala/hundi operators are prevalent throughout Pakistan, and it is estimated that use of these operators accounts for over half of the total remittances. Unlicensed hawala/ hundi operators are also common throughout the region and are widely used to transfer and launder illicit money. Some support the financing of terrorism.

The report goes on to note that unlicensed hawala is especially common in Karachi and Peshawar.

By the way, even a 50 percent registration rate of hawala businesses is higher than it is in the U.S. Our authorities are only licensing 17 percent of hawala dealers according to a study out of George Mason University.

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Hawala saturates 90% of Afghan financial market

April 27, 2015

The U.S. State Department has published its international narcotics report for 2015. The report notes that only 10 percent of financial transactions in Afghanistan are handled through the formal banking sector. The other 90 percent are handled through hawala, the traditional Islamic system of debt transfers. Hawala is a way of moving value without moving physical cash. Its untraceable nature is tailor made for terror financing and other illicit activities.

The State Department report indicates that the prevalence of hawala in Afghanistan facilitates the movement of proceeds from the Afghan drug trade. As crazy as it may sound to Western compliance officers, the thousands of hawala dealers in Afghanistan have yet to file any suspicious transaction reports to Afghanistan’s central financial regulator—not even a single one. And even their banks are using hawala! All this and we’ve been there for over 13 years…

The growth in Afghanistan’s banking sector has slowed considerably in recent years; and traditional payment systems, particularly hawala networks, remain significant in their reach and scale. Less than 10 percent of the Afghan population uses banks, depending instead on the traditional hawala system, which provides a range of financial and non-financial business services in local, regional, and international markets. Approximately 90 percent of financial transactions run through the hawala system, including foreign exchange transactions, funds transfers, trade and microfinance, as well as some deposit-taking activities. Official corruption and weaknesses in the banking sector incentivize the use of informal mechanisms and exacerbate the difficulty of developing a transparent formal financial sector in Afghanistan. The unlicensed and unregulated hawaladars in major drug areas such as Helmand likely account for a substantial portion of the illicit proceeds being moved in the financial system. Afghan business consortiums that control both hawaladars and banks allow criminal elements within these consortiums to manipulate domestic and international financial networks to send, receive, and launder illicitly-derived monies or funds intended for criminal, insurgent, or terrorism activities…

…There is no clear division between the hawala system and the formal financial sector [in Afghanistan]. Hawaladars often keep accounts at banks and use wire transfer services to settle their balances with other hawaladars abroad. Due to limited bank branch networks, banks occasionally use hawalas to transmit funds to hard-to-reach areas within Afghanistan. Afghanistan’s financial intelligence unit, FINTRACA, reports that no MSBs or hawaladars have ever submitted suspicious transaction reports (STRs)…

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