Posts Tagged ‘FATF’


Dubai atop a “toxic tide of illicit cash”

January 29, 2010

Today’s post involves another news story about the connections between crime and terrorism.  However, this article is better than average, because it doesn’t try to equate terrorism with international crime, like the speech analyzed here in yesterday’s post.

Last Sunday’s Guardian printed a follow-up to the story of hawaladar Naresh Jain’s arrest.  I’ve blogged about Jain here earlier, so I’ll cut out the background and go straight to the heart of the Guardian piece, which is how Dubai was the perfect setting for Jain’s and other people’s crimes:

Jain has reportedly admitted to Indian police that he has laundered cash, but denies being involved in the drugs trade.

However, investigators believe that his businesses are based on huge sums of cash originating in Africa and passed on to him by diamond smugglers and drug dealers – and that most of that illicit cash flows into Dubai. But the allegations against him do not make him unique in the emirate. “[Jain’s arrest] was an important incident, but many wanted men reside in Dubai,” says Dr Christopher Davidson, an expert on Gulf economics at the University of ­Durham.

To many, Jain is the latest, perhaps the biggest, example that proves the United Arab Emirates is not so much awash with vast oil wealth but built on a toxic tide of illicit cash: a place where Russian mafia and drug cartels clean their dirty cash and al‑Qaida finances terror atrocities. And at its heart is Dubai, a world financial centre that in the past 15 years has grown exponentially.

As Dubai’s ruling elite pick through the wreckage of its bombed-out economy, which exploded under the weight of $60bn of debt last year, an equally pressing issue threatens to undermine not just Dubai but the UAE as a whole.

Next month, a meeting of the Financial Action Task Force (FATF), the powerful intergovernmental body responsible for combating money laundering and the financing of terrorist networks, will meet in Abu Dhabi. The meeting is expected to establish which countries to put on a high-risk jurisdiction list following a request by G20 finance ministers last year. It is thought likely that the UAE will feature on the list. Such a development would be a serious blow to the money men of Dubai, but would confirm many people’s fears that it remains a port of choice for dirty cash. Read the rest of this entry ?


Pot to kettle: Brits judge Indian CFT

January 7, 2010

Last month the Financial Action Task Force (FATF), an organization originally established by the old G-7 to review certain countries for their compliance with modern anti-money laundering and combating the financing of terrorism (CFT) standards, paid a visit to India.

The FATF is most famous for its “blacklist” (or Non-Cooperative Countries and Territories [NCCT]) list of nations with poor AML-CFT controls.  However, the FATF does not evaluate all the countries in the world.  It only evaluates countries that its benefactor nations of the G20 request it to investigate.

Approval from FATF is a green light for international investment.  Being blacklisted is a powerful incentive for the country to reform its anti-terror finance practices.

Currently no countries are on FATF’s blacklist.  All the ones that were have since reformed their policies and been removed.  Membership in FATF is the equivalent of a stamp of approval of that country’s financial safeguards.

FATF says it will rule on India’s application for membership in June.  India just got a slight boost from Japan whose prime minister endorsed Indian FATF membership.

What caught my attention is the FATF committee that will evaluate India’s application.  FATF’s British representatives will be one of the nations examining India’s regulatory framework.  That’s fine and dandy, since London is one of the world’s biggest banking hubs.

But it’s just slightly ironic that the FATF visit took place amidst rampant media speculation over how the 26/11 Mumbai attacks were funded, when, as Money Jihad reader Puneet Madaan pointed out in a helpful comment here, British pounds funneled through U.K. mosques may have helped fund 26/11 and Lashkar-e-Taiba in the first place.

But the U.K. connection to terrorism against India is deeper than just 26/11.  Muslim charities in Britain apparently sent money to terrorists in 2006 under the guise of earthquake relief.  The U.S. Copts Association says that, “British Muslims have become a mainstay of the global jihad” along with the money from Britain that is funding jihad.  And in a eye-popping crazy-if-true post yesterday over at “Order-Order,” a hate-preaching imam gets more in British welfare benefits than a frontline soldier.

As we in the West get on our high horses to judge India’s anti-terror policies, who will judge us?


Are Western Union’s controls enough?

November 27, 2009

As the one-year anniversary of the 26/11 terrorist attacks against Mumbai passed yesterday, many questions in India remain unanswered.  Government officials are still prosecuting and arresting those involved, and are still trying to figure out what steps to take to prevent terrorist attacks in the future.

The role of Western Union money wires has come under special scrutiny in India, which receives $50 billion a year in remittances from Indians living in other countries.  Reportedly, Western Union has taken additional steps to verify the identity of those involved on both sides of the transaction.  The Economic Times offers this report:

MUMBAI: The person at the Western Union counter has a delicate job these days. When a burkha-clad lady steps into the agency, likely to collect the money her husband sends on the first Friday of every month from Muscat, she is politely asked to lift her veil just for a second — a standard operating procedure to make sure that the lady behind the veil is the same person whose photo appears on the ID.

Read the rest of this entry ?