Posts Tagged ‘OFAC’

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Hezbollah financier in Nigeria exposed

March 3, 2015

We’ve known for years that Hezbollah uses supermarkets in West Africa to launder drug money for Hezbollah (such as Tajco Ltd). Amigo Supermarket in Abuja, Nigeria, is just the latest. The U.S. Treasury Department has named 1) Amigo, 2) an amusement park, and 3) a holding company in Nigeria as Hezbollah front companies. Treasury also sanctioned Mustapha Fawaz, age 47, a Lebanese-born Nigerian citizen who co-owns the companies, calling him, “a significant donor to Hizballah” who has “solicited donations in Abuja, Nigeria, and helped arrange the transmission of these funds to Hizballah in Lebanon.”  Treasury’s action freezes any U.S. assets Fawaz may have and prohibits Americans from dealing with Fawaz.

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Treasury Department stays limp on Dahabshiil

November 3, 2013

UPDATE—FEB. 28, 2015:

In October 2012, Dahabshiil commenced defamation proceedings in The Netherlands against Dahir Alasow (a Somali asylum seeker living in The Netherlands) in respect of various articles written by Mr Alasow and published on his websites including Sunatimes, Waagacusub and ASOJ. These articles alleged that Dahabshiil was, inter alia, involved in the financing of terrorism and other serious crimes, allegations which were categorically denied by Dahabshiil.

On 16 December 2014, the ’s-Hertogenbosch Court of Appeal of The Netherlands, following an extensive examination of the evidence, ruled that the articles were untrue and defamatory of Dahabshiil. Mr Alasow was ordered to remove various articles containing the defamatory allegations from his websites, publish a notice of rectification and pay Dahabshiil’s legal costs. The court’s decision can be found here:
http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHSHE:2014:5351


Financial crimes expert Kenneth Rijock is asking why the U.S. Treasury Department hasn’t levied sanctions against Dahabshiil, a Somali financial services company that funds the terrorist organization al-Shabaab.

It’s a very valid question considering the amount of evidence that Money Jihad has catalogued against Dahabshiil.  The answer is partly because this money services business (MSB) and other Somali remitters are being protected by an alliance of Somali leaders in Minneapolis, Democrat politicians in Minnesota, national nonprofits and Muslim advocacy groups.  They want to keep the remittance channels to Somalia open at any cost—even if it means that the money will be siphoned off by al-Shabaab to pay operatives and buy weapons.  They lobby Treasury behind the scenes to ensure the spigot stays open, and mistakenly claim that anybody opposed to the money transfers is Islamophobic, and that any bank that severs correspondent relationships with Dahabshiil is cutting off a “lifeline” to the people of Somalia.

Treasury is under orders to ease the skids for zakat and remittance transfers from the U.S. back to the Islamic world.  The larger financial and strategic risks are being ignored because of rigid ideologies and domestic political backscratching.

Rijock makes the case for a change:

Why Won’t OFAC Sanction the Somali MSB Dahabshiil?

Dahabshiil, the money service business headquartered in Somalia, has gone to court in the United Kingdom, seeking injunctive relief against Barclays, which is scheduled to exit their relationship, for both money laundering, as well as terrorist financing, grounds. Barclays has declared that it will delay closing Dahabshiil accounts, pending the imminent court ruling. What’s wrong with this picture ?

Dahabshiil has a long and checkered history of accommodating, and facilitating, the finances of Al-Shabaab, which is a designated terrorist organization. Al-Shabab has:

  1. Received what amounts to annual bribes, or tribute, from the MSB.
  2. Forwarded money, from other Middle Eastern countries, to Dahabshiil accounts in Somalia, which was then used to fund terrorist acts inside the country, including the targeted killing of Somali government officials.
  3. Extorted money, from Somali expats abroad, and sent it in to itself in Somalia, through Dhaabshiil accounts.

Dahabshiil has also been accused of using bribes and threats to shut down critical media comments on its operation.

Where is OFAC on all this ? Someone in a position of leadership at Treasury needs to take action to designate this MSB immediately, and not two years later, please. Al-Shabaab represents not just a clear and present danger to the Government of Somalia, it threatens Kenya and the entire East African region. Its conversion of expatriate Somalis could even pose a terrorist threat to the United States.

Barclays should have to be the only entity going up against this terrorist organization. The US & the UK need to strand up and be counted with sanctions.

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Charity’s bank accounts closed over Hamas ties

February 19, 2013

The Al-Aqsa Foundation’s account with the First National Bank of South Africa has been suspended.  The alleged Palestinian relief charity is already blacklisted by the U.S.

An intriguing part of this article is a brief reference to Al-Aqsa opening an account with a second bank, Al-Baraka, after Al-Aqsa was notified that First National Bank would be closing Al-Aqsa’s account.  Al-Aqsa must have believed that Al-Baraka, a branch of the Bahrain-based sharia finance conglomerate known as the Al-Baraka Banking Group, would have been a safe haven for its tainted funds.  However, once the attempt to evade international sanctions by simply opening a new account with a second South African bank was discovered, Al-Baraka has no choice but to suspend Al-Aqsa’s account as well.

In similar developments elsewhere, TCF Financial Corp. is closing the accounts of several Iranian students at the University of Minnesota, and UBS closed a bank account belonging to the UK-based Islamic Relief late last year.

From the Daily Maverick:

Banking woes for SA charity suspected of financing Hamas

The Al Aqsa Foundation has had its banking facilities with two South African banks suspended in recent weeks. Despite being registered with the South African government as a bona fide charity, the foundation is believed to be covertly funnelling funds to Hamas. By KHADIJA PATEL.

The Al-Aqsa Foundation, a charity registered with the Department of Social Development focusing on providing aid to Palestinians has recently had its banking facilities with two South African banks suspended. The Foundation is suspected by the US government to be raising funds for Hamas, the Palestinian resistance movement and governing authority of the Gaza strip.

In December, First National Bank (FNB) issued Al-Aqsa Foundation with three months’ notice before completely shutting its account. In a statement, the CEO of FNB Commercial Banking Michael Vacy-Lyle explained, “It has come to the bank’s attention that the foundation is expressly listed by the US Department of Treasury, Office of Foreign Assets Control (OFAC) and other international sanctions lists.”

The move received widespread condemnation from the South African Muslim community, with at least one prominent cleric calling for a boycott of FNB. The Media Review Network, an organisation focused on the representation of Islam and Muslims in the media, deplored FNB heeding to the dictate of “foreign” agents, despite the Foundation receiving a clean audit from the Department of Social Services.

FNB, however, has sought to dismiss allegations that it has been bullied by the US government into closing the account. The listing is said to have come to the attention of the bank over a year ago during routine internal governance processes, and closing the account is an act of expedience that allows FNB to keep up its relationships with other financial institutions in the US.

Vacy-Lyle said, “The international financial community imposes stringent obligations in respect of the maintenance of banking relationships with entities listed by OFAC and the decision by FNB to terminate its relationship with the foundation is a consequence of this fact alone.”

Annette Hübschle, a researcher focused on the organised crime-terror nexus, said the move to close the Foundation’s account in light of the US listing was revealing of who holds the greatest power in global politics.

Last week it was revealed that another South African bank, Al-Baraka bank, had also frozen an account of the Al-Aqsa Foundation – this account had been opened after FNB had indicated it would be terminating the Foundation’s account.

According to another statement from FNB quoted by Channel Islam International, “The closure is a requirement of global banking governance and is applicable to all South African Banks including Al-Baraka Bank.”

Hübschle agrees. “They have all signed up to the Basel regulations,” she said. “In essence, banks do have to comply, not necessarily with the US, but more if they want to do business in the US then they actually do have to comply.”

She names the example of The Palestinian Relief and Development Fund (Interpal) as a case in point. “In 2003, the US Treasury named Interpal a ‘specially designated global terrorist group’ that directly financed Hamas, while the British Charity Commission gave Interpal a clean bill of health. This perhaps reflects a disagreement about where charity ends and extremism begins,” she said.

The Al-Aqsa Foundation has been described by the United States as a “critical part of Hamas’ transnational terrorist support infrastructure”. According to the US government, Hamas “uses humanitarian relief as cover to provide support to the Hamas terrorist organisation”. Hamas, the governing authority of the Gaza strip, is further designated by the US Secretary of State as a “Foreign Terrorist Organisation”. According to the US, Hamas is known to raise millions of dollars per year throughout the world using charitable fundraising as a cover. Al-Aqsa Foundation is alleged to be one such mask for more nefarious Hamas activity…

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Al-Nusra jihadists in Syria sanctioned by U.S.

December 11, 2012

The U.S. State Department listed al-Nusra Front as a foreign terrorist organization yesterday (h/t Twitter user Sal Imburgia ‏@salimb94).  A parallel designation by the Treasury Department will include a prohibition against business deals between Americans and al-Nusra and a freeze of al-Nusra assets in U.S. banks.

A BBC profile of the al-Nusra Front calls the group’s ideology “clearly jihadist,” and says that al-Nusra has claimed responsibility for “many of the bombings that have rocked Syria since the uprising began in March 2011.”

Additional reports have indicated a warm relationship between al-Nusra and Al Qaeda.

Given U.S. support for many groups fighting in the Syrian rebellion, the designation may present a schizophrenic approach to American foreign policy in Syria wherein certain Syrian rebels receive financial support and rebels that they work alongside with receive financial penalties.  McClatchy lays out several other complicating factors in the al-Nusra designation in a good report here.

Kenneth Rijock also weighed in prior to the the designation on what it would mean for U.S. banks with commercial relationships in Syria and the Palestinian territories:

Multiple reports of the imminent OFAC  designation of the Al-Nusra Front, a radical Sunni organisation fighting the Assad regime in Syria, should alert compliance officers whose clients are sending relief funds, and supplies, to Syrian Opposition groups. Its Arabic name is Jabhat Al-Nusra, and the approximate English translation is Front for the Protection of the People of the Levant.

One important detail: Al-Nusra, which has spewed forth anti-American and Anti-Israeli hatred, reportedly contains a fair number of Palestinians. Don’t get caught in an OFAC violation if your clients are in the midst of what you thought were contributions to Palestinian causes, but go straight to Al-Nusra. It has been reported that the OFAC action will take place around 12 December.

I would piggyback on Rijock by making the following suggestion to non-profits, NGOs, charities and their donors:  if you are involved with relief work in either Syria or the Palestinian territories, you should factor the risk of funding this Al Qaeda offshoot into your aid distribution plans.  Are making such donations so important to you that you would risk supporting an Al Qaeda takeover of Syria?

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Expert: Obama’s Syria license “dangerous”

November 3, 2012

What good are sanctions against funding Al Qaeda if the Treasury Department issues a blanket license to the Islamist-dominated Syrian Support Group to sponsor whatever causes it deems fit in Syria?  It is worse than simply letting the SSG operate in Syria—it is giving them the express legal authority to do so.  If the money ends up in the wrong hands, the SSG can always say, “We got a license from the U.S. government.  Don’t blame us.”

By Patrick Poole on Oct. 25:

Anti-Terror Authorities Question Where Money Goes From Group With Special License From Obama Administration

In July, the Obama State Department approved an extraordinary license for a newly formed U.S.-based organization, the Syrian Support Group, to raise money for Syrian rebels – overriding the administration’s own sanctions and Obama’s Executive Order against such activity.

To some counterterrorism and terror finance authorities in Washington D.C., this extremely rare privilege raises considerable concerns.

This is especially true because two related figures with the organization, Louay Safi and Mazen Asbahi, have previously been tied to terror fundraising efforts by Islamic organizations identified by the U.S. government in federal court as fronts for the Muslim Brotherhood.

One U.S. Treasury official specializing in terror finance said:

This license sets a dangerous precedent because it gives complete and perfect cover to virtually all of their activities. They can honestly say, “I can’t be fundraising for terror because I have a license from the State Department.” But we have absolutely no idea where that money is going once it leaves the United States. And as the Supreme Court recognized in a court case a few years ago, money raised for terrorist groups is fungible.

The situation in Syria is so fluid, we don’t have the slightest idea who is actually benefiting from this money being raised here, and anybody from the administration who says that they do is bald-faced lying.

The Syrian Support Group was incorporated in April 2012, according to records obtained from the District of Columbia Corporations Division.

On May 24, the group sent a letter to the State Department’s Office of Foreign Assets Control, and on July 23 that same office issued the license – a copy of which was obtained by The Blaze – allowing them to “export, reexport, sell, or supply to the Free Syrian Army (‘FSA’) financial, communications, logistical, and other services otherwise prohibited by Executive Order 13582 in order to support the FSA.”

The Free Syrian Army is affiliated with the Syrian National Council governed by that group’s military bureau, which is overwhelming dominated by Islamist groups, including the Syrian Muslim Brotherhood…

Details of the Muslim Brotherhood connections are laid out in The Blaze.

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HSBC’s mixed record on Sudan

September 14, 2012

Since 1997, the U.S. has maintained sanctions against Sudan, a state sponsor of terrorism.  The United Nations has imposed an arms embargo on Sudan’s Darfur region since 2004 and asset freezes of some Sudanese officials since 2005.  The U.S. Office of Foreign Assets Control (OFAC) has limited U.S. dollar transactions in Sudan since 2005.

But those sanctions have not prevented HSBC from periodically making improper transactions in U.S. dollars in Sudan from 2005 to 2008.  The instances described do not sound like intentional efforts to undermine the international sanctions regime against Sudan, but the actions were nonetheless negligent.  From the U.S. Senate’s report on HSBC earlier this summer (with internal citations omitted):

A second set of OFAC sensitive transactions involved Sudan, a country which is also subject to a comprehensive sanction program in the United States.  Internal bank documents indicate that, from at least 2005 to 2008, HBUS processed a considerable volume of U.S. dollar transactions involving Sudan that, once the new GCL [group circular letter from HSBC’s Compliance Group] took effect, should have decreased. The reasons they continued include a wide range of factors, from inadequate bank staffing reviewing OFAC transactions, to deceptive wire transfer documentation, to ongoing actions by HSBC affiliates to send these potentially prohibited transactions through HBUS.

In August 2005, a month after HSBC Group issued the GCL policy barring HSBC affiliates from engaging in U.S. dollar transactions in violation of OFAC prohibitions, HSBC Group head of Global Institutional Banking, Mark Smith, circulated a managerial letter identifying correspondent relationships that would be affected.  The letter stated: “An overriding observation is that the revised policy will most significantly impact the Cuban and Sudan correspondent bank relationships.” It also observed: “For Sudan and Cuba, most of our business is conducted in USD and the discussions already initiated with the affected banks will dictate the extent of our ongoing relationships.” In September 2005, a senior HBEU payments official Rod Moxley completed an analysis of U.K. transactions over a 10-day period that were stopped by the WOLF filter and noted “a considerable number of USD denominated transactions” for Sudan.

A year after the GCL took effect, however, one affiliate attempted to clear a Sudan-related transaction through HBUS in violation of company policy. On December 6, 2006, HBUS blocked a $2.5 million payment originating from an HSBC branch in Johannesburg, because the payment details referenced the “Sudanese Petroleum Corporation.” Although the payment had also been stopped by the WOLF filter in HSBC Johannesburg, an employee there had approved its release and sent the transaction through their correspondent account at HBUS. An internal email from HSBC Johannesburg explained that the release of the funds was:

a genuine error in an attempt to push the day[‘]s work through before the cut-off time. I believe the loss of three staff in the department leaving only two permanent staff remaining is causing the[m] to work towards clearing their queues rather than slow down to read the warnings such as these. … Having said that I also feel it is a matter of training where seeing the word ‘Sudan’ alone should have been warning enough.

The email also noted that the transaction had been sent by Commercial Bank of Ethiopia, which was “aware that this payment may not go through as they have attempted to make this payment via their other correspondent banks and failed.”

In July 2007, HBUS discovered that another client, Arab Investment Company, had been sending “multiple Sudan-related payments” through its U.S. dollar account at HBUS, that other banks later blocked for specifying a Sudanese originator or beneficiary, “suggesting that HBUS has been processing cover payments for this client.” An email identified seven wire transfers over a one-year period, collectively involving more than $1.1 million, in which the documentation provided to HBUS made no reference to Sudan, preventing the transfers from being stopped by HBUS’ OFAC filter. The email noted that two of the wire transfers later blocked by other banks had resulted in letters from OFAC seeking an explanation for HBUS’ allowing the transfers to take place, and suggested closing the client account to prevent more such incidents.

On another occasion, HBUS identified five wire transfer payments between January and November 2007, totaling more than $94,000, that turned out to be intended for a Sudanese company, but had been processed as straight through payments at HBUS, because “there was no beneficiary address and no mention of ‘Sudan’.”

In still other cases, wire transfers clearly referencing Sudan were stopped by HBUS’ OFAC filter for further review, but then allowed by HBUS staff to proceed. An HBUS internal report on OFAC compliance noted, for example, two blocked wire transfers involving Sudan, one for over $44,000 and the other for over $29,000, blocked on November 5 and December 7, 2007, respectively, by HBUS’ OFAC filter, but subsequently “released due to human error.”

In August 2008, HBUS noted that it was then holding over $3.2 million in Sudan-related payments sent to the bank from other HSBC affiliates.

The bulk of the funds came from blocking a $2.5 million payment from HSBC Johannesburg destined for the Sudanese Petroleum Corporation, but three other Sudan-related payments from HSBC affiliates were also identified, a $300,000 payment sent by HSBC Hong Kong; a payment for more than $367,000 payment from HSBC Dubai, and a payment for more than $58,000 from British Arab Commercial Bank Ltd.

The email listing these blocked funds noted that a court order was seeking transfer of the funds to a federal court in the United States in connection with a lawsuit seeking compensation for the families of 17 U.S. sailors killed in a 2000 terrorist attack on the USS Cole in Yemen.

In August 2010, in connection with an effort to exit correspondent relationships with 121 international banks that HBUS determined it could no longer support, HBUS CEO Irene Dorner sent an email noting references to 16 banks in Sudan. Ms. Dorner wrote:  “In Phase 2 there will be Trade names the exit for which may be more complicated but to give you a flavor of the problem we seem to have 16 correspondent banks in Sudan which cannot be right.”

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Ex-money launderer says ING should lose license

July 9, 2012

OFAC, a division of the U.S. Treasury Department, settled with ING last month for violations of economic sanctions against Cuba and Iran.  Former self-professed money launderer and financial crimes analyst Kenneth Rijock says that he is “totally disgusted” by how weak the settlement is, especially considering that trade with Iran could support its attempt to become a nuclear aggressor.  Mr. Rijock asserts that given the seriousness of the violation that ING should have lost its license outright.

Taken together with sanctions expert Eric Ferrari’s exasperation over OFAC’s settlement with Genesis Assets Managers over Iran sanctions, and our own frustration with the Department of Justice settling with Islamic Investment Company of the Gulf (IICG) over Muslim Brotherhood funding, we are once again seeing the painful results of the Obama administration’s settlement strategy.  Whereas Bush sought to investigate, raid, and shut down nefarious Islamic charities and sanctions violators, Pres. Obama has opted for a softer, gentler, smoother, weaker, less risky, more politically correct path.

Surely, the feds are balancing economic and political considerations by choosing not to revoke ING’s license.  But if we were truly serious about stopping Iran dead in its tracks, would we really have let ING off with a slap of the wrist?

From Mr. Rijock’s blog:

SHOULD ING BANK LOSE ITS US LICENSE ?

I  am totally disgusted with the latest OFAC settlement; $619m fine levied against ING bank, clearly their biggest yet,  for the most egregious sanctions violations seen in a long time. Look at what the bank admitted to doing:

(1) Omitting references to Cuba in payment messages sent to US financial institutions.

(2) Creating and providing fraudulent bank endorsement stamps, for use by Cuban financial institutions.

(3) Use of corporate entities to obscure the identities of sanctioned clients.

Frankly, the fine is insufficient; why haven’t any of those bloody bank officers who committed these violations been arrested ?

Finally, the only punishment that bankers will understand is the revocation of a US bank license; anything else is not a sufficient deterrent. Helping Iran to evade sanctions, and probably facilitate its WMD and ballistic missile programmes, through purchasing of equipment and supplies; helping all the sanctioned jurisdictions make purchases ?   Let the punishment fit the crime; take away something meaningful, Mr. Regulator, please. Not another financial slap on the wrist. That is the cost of doing business.

your public servants at OFAC

Shut down their New York offices for five years.