Posts Tagged ‘risk’

h1

10 tips for businesses to avoid financing terror

November 24, 2014

If you run or work for a medium or small business that can’t afford to have an entire compliance department, or even a compliance officer, here are a few tips that will help your business reduce its risk of inadvertently funding a terrorist organization, running afoul of federal authorities, or both:

  1. Conduct due diligence before taking on new accounts, and do not rely exclusively on Internet searches for due diligence.
  2. For international accounts it is doubly important to carry out thorough due diligence (including overseas business partners, banks, security providers, and charities) before signing agreements with them. You will probably have to contract out for investigation services, but it’s worth the expense.
  3. If your business promotes or authorizes employee payroll deductions to make charitable contributions, review the list of participating charities. Do not offer payroll deductions for donations to charities suspected of financing terrorism or charities known to have worked with designated terrorists. This would include Islamic Relief USA and the Zakat Foundation (see here and here).
  4. If your business requires or offers diversity or equal opportunity training, do not make payments to any organization or person to conduct the training who has been implicated in terrorist financing schemes such as members of the Council on American-Islamic Relations or the Islamic Society of North America, both of which were unindicted co-conspirators in the Holy Land Foundation Hamas-financing case.
  5. Think twice before offering sharia-compliant investment accounts to employees or allowing a conventional retirement brokers to offer sharia funds to your employees. These financial products are less transparent with respect to fund management by sharia advisory boards whose members often share close ties with the international Muslim Brotherhood and are not subject to disclosure requirements on where they channel their profits.
  6. Do not buy corporate fruit baskets or other gift baskets from Edible Arrangements. Their CEO operates a foundation out of his office at Edible Arrangements allegedly linked to Pakistani front charities that fund Islamist militants.
  7. Do not have business lunches, meetings, or conferences catered by halal food providers such as IFANCA and Crescent Foods, which have been endorsed by or have catered events for entities that are suspected to have financed terrorism.
  8. If you are asked by an importer whether your business can ship to or “enter an Arab Port?” do not answer the question. That is code language used to ascertain your business’s willingness to participate in the Arab League’s boycott against Israel. Answering the question helps those who oppose the existence of Israel and will lead to fines by the U.S. Office of Antiboycott Compliance.
  9. Don’t let your data or your employees be held for ransom. Ask your IT department or technology provider about their security protocols against ransomware. Make adequate plans to protect your employees from abduction during overseas travel. Paying ransoms will serve to enrich criminal or terrorist groups which will be costlier and less secure for your industry in the long run.
  10. Bookmark and read blogs such as Money Jihad, Kenneth Rijock’s Financial Crime Blog, and Shariah Finance Watch for the latest threat trends in terror finance risk management. These websites are free unlike some of the other specialized news sites which are informative but fee-based.
Advertisements
h1

U.S. Bank backs out of Dahabshiil deal

August 3, 2014

Minnesota banks stopped providing remittance services to Somalia in late 2011 over concerns about the risks of terror finance and money laundering. U.S. Bank, a subsidiary of U.S. Bancorp, considered a partnership with Dahabshiil to reinstate money transfer services to Somalia, but cancelled those plans earlier this year.

Minnesotans for a Fair Economy reported in April that:

U.S. Bank officials informed representatives of Minneapolis-based Dahabshiil, a Money Service Business (MSB) that serves the Somali community, that it would not conduct remittances to Somalia…

Community leaders have met with U.S. Bank officials many times since the last Minnesota bank ceased conducting the transactions. Such a meeting took place just two weeks ago.

“On behalf of our community, I am very disappointed by this decision to back out of our agreement,” said Mohamed Nor of Dahabshiil.

U.S. Bancorp explained its decision by saying, “”Unfortunately, because of some items identified in the independent review of Dahabshiil and the inherent risks of doing business in Somalia, we are not able to open an account as we had hoped.”

U.S. Bancorp should be applauded for its sensible decision. There are simply too many questions about the financial relationship between Dahabshiil and the terrorist group al-Shabaab to proceed with business partnerships between Dahabshiil and Western financial institutions.

h1

Money Jihad’s recommended reading

February 27, 2014
  • Despite budgetary hard times, the Palestinian Authority is able to cough up $46 million to terrorist ex-convicts—from your tax payments… more>>
  • Is a financial-cyber war against America already underway?  More>>
  • Sharia law dictates that gambling is haram (unclean), and Sheldon Adelson is Jewish and pro-Israel. Perhaps those are two of the reasons why Adelson’s Las Vegas Sands has been the target of a major cyber attack… more>>
  • New legislation in Turkey threatens to prevent meaningful due diligence by bank compliance officers by suppressing negative information on the Internet… more>>
h1

Covert finance news: suggested reading

January 2, 2014
  • Considering that Saudi Arabia and the U.A.E. fund al-Nusra Front, which other chapters of Al Qaeda are they financing?more>>
  • The U.S. and British pause in arming the rebels hasn’t deterred Turkey’s gunrunning program to Syria. They’ve just dropped off almost 50 tons of weapons across the border… more>>
  • How an Al Qaeda acolyte used a stun gun on the streets of London to mug and fund his personal jihad to Syria… more>>
  • The risks of banking and doing business deals in Turkey has grown too great… more>>

 

h1

Pakistan scrambles to get off FATF’s gray list

September 16, 2013

The world’s leading financial standards body, FATF, alerted the international community earlier this summer that Pakistan and 11 other countries have failed to make sufficient progress in preventing money laundering and terrorist financing.

The newspaper Pakistan Today notes that if Pakistan fails in “coming up with proper and combating the financing of terrorism and anti-money laundering legislations the country may face severe financial sanctions that may affect its financial deals with the World bank, the Asian Development Bank and other top financial institutions” (h/t Zia Ur Rehman).  Pakistan should make reforms prior to FATF’s next meeting in October to avoid such sanctions.

Not so coincidentally, Pakistan’s central bank has rolled out a new requirement for Pakistani financial institutions to adopt nationwide software by Sept. 30 that will facilitate the filing of suspicious activity reports by bank employees.  When a certain customer or transaction is regarded as suspicious, the financial institutions would use this software to report their observations back to the central bank.

Anybody familiar with new software deployments, even under the best circumstances in well-developed high-tech nations, will recognize that this is an overly ambitious timetable to for implementation.  Widespread training and adoption of the software is unlikely to be complete by FATF’s deadline, but the stated goal may be enough to persuade FATF that Pakistan is moving in the right direction.

Pakistan has been cited before by the Financial Action Task Force for its financial regulatory deficiencies.  Despite the history of shortcomings, Western nations have continued to saturate Pakistan with foreign aid.  Without adequate money laundering an CFT controls in place, there is a high risk of any such military and development aid being abused by malicious actors without fear of detection or prosecution.

h1

Lights out for terror-funding Islamic charity

August 7, 2013

Canadian nonprofit ceases operations after bank closes account

Once again pointing to the power of tax authorities to expose and defang dangerous front charities, a Muslim nonprofit in Canada has stopped accepting donations after its bank closed its account.  The bank’s decision followed an audit and finding by tax officials that IRFAN was no longer eligible for tax-exempt status, largely because of its role in funding Hamas.

The bank account closure and operational suspension is also a victory for Canada’s taxpayers, who will no longer see their money being channeled through a network of smaller Islamic charities and mosques for distribution by IRFAN.

From the National Post; thanks to Gisele for sending this in:

Relief organization that allegedly supported Hamas suspends operations after CIBC closes bank accounts

Stewart Bell | 13/07/15

A humanitarian relief organization that lost its charity status two years ago over its alleged support for Hamas said Monday it was suspending operations after the Canadian Imperial Bank of Commerce won court approval to close its accounts.

The CIBC gave notice in May that it intended to stop providing banking services to the International Relief Fund for the Afflicted and Needy — Canada. The Ontario Superior Court of Justice upheld that decision, which went into effect on Monday.

Without a bank, the Toronto-based relief group, which spent $9-million on charitable activities in 2009, said it could no longer transfer money abroad for programs that include the support of orphans in the Palestinian Territories, Lebanon and Sudan.

“IRFAN-Canada is choosing not to accept donations at this time because they are unable to transmit funds to the intended destinations,” the group’s lawyer, Naseer Syed, told the National Post. “Therefore, without donations, they will be forced to suspend their humanitarian relief programs”…

Formed in 1998, IRFAN-Canada was mostly active in the Muslim world but it ran afoul of federal regulators, who revoked its charity status in 2011. The Canada Revenue Agency said an audit had determined the group was an “integral part” of an international fundraising effort that supported Hamas, a Palestinian terrorist group…

h1

Chase assesses risk, closes suspected accounts

June 21, 2013

Banks have a responsibility under federal law to deny account services to customers who are at risk for funding terrorism, money laundering, or evading economic sanctions.  Banks can’t allow customers to send money to countries that lack safeguards against such activities either.

Accordingly, JPMorgan Chase has closed an unspecified number of accounts that are at risk for abuse or criminal behavior by customers who are, according to the Michigan chapter of the Council on American-Islamic Relations, Muslims or Arabs.

The Arab-American Civil Rights League also alleges 50 “improper” account closures by banks such as Flagstar, Charter One, and Comerica.

Opponents of such bank closures would be better served by proposing changes to federal law rather than threatening lawsuits against banks that are simply carrying out their duties under the existing rules.

From the Detroit News:

Muslim, Arab-American groups say banks closing accounts without explanation

  • Mark Hicks, June 13, 2013

Two groups are seeking answers to what they say is a growing practice of Muslim and Arab-American groups having their bank accounts closed without cause or explanation.

The Council on American-Islamic Relations–Michigan is asking the Office of the Comptroller of the Currency, part of the U.S. Department of the Treasury, to investigate the complaints and the Arab-American Civil Rights League in Dearborn is pursuing a lawsuit against major banks.

“We see a type of pattern taking place in the Muslim/Arab community,” Dawud Walid, executive director of CAIR–MI, said Wednesday. “Bank accounts are being closed with no real justification … so it appears on the surface that there could be some sort of bias involved.”

One of the latest reported incidents, according to CAIR–MI, involved Alif Arabic, a business described as teaching Arabic to American citizens online. Officials there were notified May 30 by JPMorgan Chase their bank account would be terminated within 10 days. JPMorgan Chase officials did not detail why, according to the letter.

When an Alif Arabic employee asked the bank for clarification, they were told an analytical tool “alerted them that Alif’s account could pose a possible risk,” the letter read.

Walid said such a move could suggest discrimination based on religion and ethnicity. “We need answers and the bank is not giving answers,” he said.

Emily Smith, a JPMorgan Chase spokeswoman, said privacy reasons prevent the company from discussing details of its customer relationships. However, “on occasion, Chase determines it can no longer maintain a customer’s account but those decisions are not based on the customer’s religion, ethnicity or any other similar basis.”

Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency, said: “We have just become aware of the letter and have not had a chance to review. We will look into these allegations.”

Meanwhile, the Arab-American Civil Rights League plans to file a lawsuit after nearly 50 incidents of individual and business accounts being closed.

The group earlier this year asked the U.S. Department of Justice to investigate and launched a hotline for complaints after some area residents were notified by Huntington National Bank and other institutions their accounts were terminated without explanation.

That affected professionals and others who believed they acted lawfully, said Nabih Ayad, the league’s board chairman.

“It’s just a shame this continues to happen. It’s not fair to the community,” he said. “These sort of circumstances, they’re basically telling Arab Americans: ‘You’re not at the same level or beneath the average American”…

H/t to Creeping Sharia for sending this over.