Posts Tagged ‘China’

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China fails to fool FATF body on Pakistan’s terror financing

July 9, 2015

India has blocked a Chinese maneuver within the Asia Pacific Group on Money Laundering to white-list Pakistan.

That would be the same Pakistan that created the Taliban, harbored Osama bin Laden, and is probably protecting terrorist fat cat Dawood Ibrahim.  Pakistan funnels millions of dollars through its ISI spy service to terrorist and militant groups in Afghanistan, Kashmir, and beyond.  Pakistan is well-known for corruption, graft, and slipshod tax administration.  China sought to shield Pakistan from any scrutiny of its abysmal counter-terror finance and anti-money laundering programs purely for geopolitical purposes.  Kudos to India for keeping the pressure on.

From TNN on June 30 (hat tip @TerrorismWatch):

India blocks China’s bid to save Pakistan on terror finance scrutiny

NEW DELHI: Pakistan’s enforcement of UN financial sanctions against terrorism will be closely monitored by Financial Action Task Force (FATF) through its associate body, the Asia Pacific Group on Money Laundering (APG), after India successfully blocked China’s attempt at a recent FATF meet in Brisbane to save non-FATF member Pakistan from such scrutiny.

FATF is a policy-making body whose objectives include setting standards to combat money laundering and the financing of terrorism and supporting implementation of these standards. APG on money laundering, somewhat of a mini-FATF of which Pakistan is a member, is committed to the effective implementation and enforcement of standards set by FATF.

According to sources in the government, India, with the support of allies like the US, managed to derail China’s bid which was backed by Australia to shield Pakistan on terror financing. The FATF meet agreed with India’s argument that Pakistan, despite not being part of FATF, was part of APG which works in close collaboration with FATF, and its enforcement of targeted financial sanctions against terrorism should be subject to monitoring by FATF through the APG.

At the FATF meeting last week, India and the US spoke up against Pakistan’s lack of conviction in implementing anti-terror financial sanctions by freezing assets or attaching properties of 26/11 masterminds Hafiz Saeed and Zakiur Rehman Lakhvi and 1993 Mumbai blasts accused Dawood Ibrahim etc. China, however, argued that Pakistan was doing enough and reporting on the action taken to APG.

India was not satisfied with the report submitted by Pakistan to APG as it listed only unnamed accounts, without identifying their origins and their implications for the group’s functioning. This was despite India furnishing enough details on Falah-e-Insaniyat, linked to LeT and Jamaat-ud-Dawah, publicly raising funds. Similar fund-raising at Hafiz Saeed’s rallies was also highlighted.

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Stashes and sanctions: suggested news reading

May 28, 2015
  • ISIS financier killed in raid; documents seized… more>>
  • Danish jihadists receive 400,000 crowns in welfare benefits, and counting… more>>
  • Iraq faced sanctions for years thanks to Saddam. Now it faces sanctions again thanks to an Iraqi airline helping Iran evade its sanctions… more>>
  • Spain busts up a Chinese money laundering operation that helps illustrate how “smurfing” works… more>>
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Terror takers: recommended news reading

May 21, 2015
  • Money freed up during Iran talks appears to be rebuilding Hamas’s tunnelsmore>>
  • The black market created by extensive regulation of the tobacco industry is enriching terroristsmore>>
  • ISIS seeks $23 million ransom for captives… more>>
  • Alibaba poses a risk for exporting sensitive military technology to China… more>>
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China blocks money flow to Pak-backed jihadists

January 28, 2014

Demonstrating its concern that Pakistani-funded terrorists are brewing a witch’s cauldron of jihad in its Western territory, the government of China has signaled that it will crackdown on illicit financial transfers among Islamists in their western frontier.

The key thing for Western readers to understand here is not so much that China is doing anything particularly noteworthy beyond common sense, but to appreciate that most of that part of the world—Afghanistan, India, Bangladesh, and China—recognizes Pakistan as a base for terrorist activity.  The American public, except for U.S. forces who have served in Afghanistan and have witnessed this first hand, isn’t being told this basic fact.  The recent budget bill adopted by Congress included some glancing pre-conditions for the resumption of U.S. foreign aid to Pakistan, but John Kerry is likely to endorse the continuation of such aid regardless of the conditions in the bill.

Thanks to our Twitter friend Moinak for sending this over:

China moves to choke funding of terror outfits in Xinjiang

Move underlines Beijing concern over Pakistan-based outfits

China’s central bank on Friday announced new measures aimed at enabling authorities to freeze assets of domestic terrorist groups and their “overseas affiliates,” in a move seen as underlining China’s continued concern over outfits believed to be operating out of Pakistan.

The People’s Bank of China (PBOC) said the rules, issued along with the Ministry of State Security, “will prevent terrorism and is in accordance with a United Nations requirement that all nations freeze, without delay, funds or other assets of terrorists,” the official Xinhua news agency reported.

This followed a directive from the National People’s Congress (NPC) in 2011 requiring “financial and certain non-financial organisations” to take steps to freeze funds seen as being directed toward terrorist activities.

The PBOC said the regulation “mainly applies at home, but also has effects on overseas branches and affiliates of relevant organisations.”

That the move is aimed at curbing funding towards activities in the far-western Muslim-majority Xinjiang region, which has seen a spate of violent attacks, appears likely in the wake of measures taken by the Ministry of Public Security, or police authority, to restrict funds moving into Xinjiang following attacks in 2012.

In April of that year, the Ministry asked Pakistan to hand over six members of the East Turkestan Islamic Movement (ETIM), and said it had taken steps to freeze their assets.

Identified as “core members” of the outfit, they were named as Nurmemet Memetmin, Abdulkyum Kurban, Paruh Tursun, Tursunjan Ebibla, Nurmemet Raxit and Mamat Imin Nurmamat.

According to Chinese officials, Mr. Memetmin trained terrorists who carried out knife and bomb attacks in Kashgar in 2011 that left at least 20 people killed.

Officials also believe Mr. Nurmamat is hiding in Pakistan, or near the Afghanistan border, after he fled China in October 2009 when an explosion accidentally struck his bomb-making unit in Shache.

The Ministry of Public Security said in 2012 it hoped “foreign governments and their law enforcing departments would help to arrest the six and hand them over to Chinese authorities.”

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Shin Bet’s dirt on the China-Hamas connection

October 4, 2013

Haaretz has published an unusually detailed report on longstanding use of Chinese banks to launder money for the Hamas terrorist organization.  Many readers are already familiar with the ongoing lawsuit against the Bank of China made wire transfers to Hamas and Palestinian Islamic jihad from 2004 to 2007, but this this newly disclosed operation involving “Abu Othman” indicates that China was still active in laundering money for Hamas as recently as 2012.  Take a look:

Infographic on criminal money transfer conspiracy

Shin Bet probe reveals scope of Hamas money laundering through Chinese banks

Laundering continued years after the Bank of China affair, Israel’s security service reveals.

By Chaim Levinson | Sep. 29, 2013

A Shin Bet security service investigation reveals that China is a central financial channel for funding Hamas activity worldwide. Its February-March 2012 probe connected Chinese banks to the transference of money to Hamas prisoners. The Shin Bet seized numerous documents of the transfers and a list of accounts in which the money was deposited in China.

The key to discovering the network was the testimony of Amar Mer’i, a West Bank money changer who had previously transferred money from laborers from Gaza to their families, but had stopped this activity after pressure from the Palestinian Authority to cut his ties with Gaza. He told the Shin Bet he was contacted by a man known as Abu Othman, who had received his name and number from Mer’i’s counterpart in Gaza. Mer’i said he suspected Abu Othman was a Hamas operative.

The Shin Bet arrested Mer’i at a border crossing in February 2010 in possession of $126,000 and NIS 80,000 in cash. Mer’i received the money from two men from the village of Musmus in the Wadi Ara region.

Mer’i’s information led to a complicated web. His contacts from Musmus, Mohammed Agbaria and his cousin Mohammed Abu Shahab, would receive text messages from Abu Othman with an encoded telephone number of an Eritrean national. Agbaria would meet the Eritrean in Tel Aviv’s Central Bus Station area, take the money from him and pass it on to Mer’i, who would deposit it in the Bank of Palestine in Yabad, near Jenin. After that, Mer’i would receive an email message from Abu Othman with instructions on where to transfer the funds.

Most of the money would be transferred to accounts in the Bank of China. One transfer was made to a Citibank account in New York and another to a bank in Alabama. Several transfers were made to a HSBC bank in Hong Kong. Some money was transferred to accounts in India and Turkey.

Mer’i personally handed over some of the cash to Hamas activists in the West Bank as compensation for having served jail time.

The Shin Bet asked Mer’i why Abu Othman had to pay a mediation commission to an Eritrean national, couriers from Musmus and also to him. Mer’i said it didn’t make sense to him and he suspected the convoluted money route was illegal. He said the text messages also made him suspicious.

Mer’i said he had called Abu Othman to ask him if the money belonged to Hamas, but was told it did not. Altogether he carried out 40 money transfers, totalling $1.1 million.

Mer’i also transferred money to Brookside Agra, an Illinois-based company that sells fertilizers.

He told the Shin Bet interrogator that Abu Othman asked him on the phone if he could handle money the latter had in Sudan. Mer’i said he asked several money changers and the Bank of Palestine, but none of them had any contact with Sudan.

Mer’i said that, a few days before his arrest, he received a text message from Abu Othman with the names of three women and the sums of money to give them. These included $3,000 to Um Faiz, $3,000 to Fatma and $3,500 to Um Sa’ad. He said he called the three and set up meetings with each.

The money was intended as support to the families of Hamas prisoners in Israeli prisons. Couriers Agbaria and Abu Shahab transferred funds to Hamas families as well. In one case, Hamas prisoner Ayman Abu Daud testified he had received $38,000 for serving time in an Israeli prison.

Abu Daud was arrested in 2002 and sentenced to 36 years in prison after carrying out four shooting attacks in the Hebron area. He was released in the Gilad Shalit prisoner-exchange deal…

There is more; read it all here.

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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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Afghan mining deal could fund terror

December 16, 2012

Taliban may tax supply routes

A business deal for copper mining rights at Aynak in Afghanistan by a Chinese consortium poses the risk of inadvertently funding local conflict and increasing the likelihood of extortion by armed groups, according to a November report from the human rights organization, Global Witness.

Excerpts from Witness’s report on the secret Aynak contract follow (with internal citations omitted):

The development of the mine and associated infrastructure brings with it a host of valuable supply and sub-contracts.  The international aid experience over the past ten years has shown that, without appropriate safeguards, the management of such supply and sub-contract can end up inadvertently funding conflict.  Aynak is a high-profile target for attacks which could be aimed at gaining attention or extorting money…

The risk of off-budget gains by, for example, security forces or powerbrokers controlling supply routes also needs to be guarded against.  [In the Democratic Republic of Congo] they do this by imposing illegal taxes at mine sites and along transportation routes, or by confiscating and trading minerals directly.  Companies sourcing minerals from the DRC are now required to carry out due diligence to ensure that their mineral purchases do not contribute to conflict or human rights abuses.

In the Afghan context, where conflict is ongoing and mines have traditionally played a role in providing financing to armed groups, supply chain due diligence by companies is an important step.

Indeed, given the Taliban’s history of profiting from flawed subcontracting measures and by levying taxes dictated by sharia law, including Taliban taxes on the mining sector (see here and here), the importance of forestalling Taliban infiltration in the Afghan-Chinese supply chain cannot be overstated.

Islamic law imposes a zakat tax of 20 percent (also known as khums) on rikaz, which Islamists regard as any source of wealth discovered underground, including oil, minerals, and buried treasure (Sahih Bukhari 2.24.575).