Al Qaeda´s Finances Ample, Say Probers - Worldwide Failure to Enforce Sanctions Cited (WASHINGTON POST) By Douglas Farah 12/14/03 Page A01)
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Governments around the world are not enforcing global sanctions
designed to stem the flow of money to al Qaeda and impede the
business activity of the organization´s financiers, allowing the
terrorist network to retain formidable financial resources, according
to U.S., European and U.N. investigators.
Several businessmen designated by the United Nations as terrorist
financiers, whose assets were supposed to have been frozen more than
two years ago, continue to run vast business empires and to travel
freely because most nations are unaware of the sanctions and others
do not enforce them, the investigators said. Several charities based
in Saudi Arabia and Pakistan that were reportedly shut down by the
governments there because of the groups´ alleged financial ties to
Osama bin Laden also continue to operate freely, they said.
As a result, al Qaeda continues to receive ample funding not only to
carry out its own plots but also to finance affiliated terrorist
groups and to seek new weapons, the investigators and terrorism
A report released this month by a U.N. panel of experts documented
the continued flow of money -- including drug money -- to terrorist
organizations and warned that al Qaeda "has already taken the
decision to use chemical and biological weapons in their forthcoming
attacks. The only constraint they are facing is the technical
complexity to operate them properly and effectively" -- rather than a
lack of means to acquire them.
"We desperately need to revitalize our effort to choke off terrorist
financing, because until we cut that off, we have not crippled al
Qaeda´s ability to attack us," said one senior U.S. official who
monitors terrorist finances. "We started out well, picked all the low-
hanging fruit, and then, as we have squeezed, they have simply moved
on to different methods."
A separate report released last week by the General Accounting
Office, the investigative arm of Congress, noted that U.S. law
enforcement still has no clear idea of how terrorists move their
money and that the FBI, which is the lead agency in tracking
terrorist assets, still does not "systematically collect or analyze"
such information. It concluded that the Justice and Treasury
departments have fallen more than a year behind in developing plans
to attack terrorist financial mechanisms, such as the use of diamonds
and gold to hide assets.
Under the sanctions policy adopted by the United Nations immediately
after the Sept. 11, 2001, attacks, individuals designated by the
world body as terrorists or terrorist supporters were to have their
assets frozen and be banned from international travel.
So far, the world body has publicly named 272 people as sponsors of
But U.N. and U.S. officials said they do not know where more than a
handful of those people are, and only 83 of 191countries have
submitted the required U.N. reports on attacking terrorist financing
and implementing the travel ban. Only a third of those have given the
list to their border guards.
The investigators said some developing nations lack the resources to
comply with the sanctions, while some wealthier countries do not know
of the sanctions or are hampered by bureaucratic inertia.
U.S. officials said that about $138 million in terrorist assets have
been frozen since the attacks, and that some steps have been taken to
clamp down on charities and other known terrorist funding mechanisms.
Officials noted the closure of three large Islamic charities in the
United States and an ongoing investigation of a group of charities
and organizations in Northern Virginia. Numerous alleged sponsors of
terrorism, in the United States and abroad, have been publicly named.
But the officials acknowledged that al Qaeda, now more decentralized,
needs less money to operate than it did when bin Laden was supporting
training camps and propping up the Taliban government in Afghanistan.
The U.N. report said $75 million of the $138 million in frozen assets
claimed by the United States belonged to al Qaeda or the Taliban. The
Taliban money, which was a "substantial" portion, has been turned
over to the new Afghan government.
Illustrating the ineffectiveness of the sanctions regime, U.S. and
U.N. officials said, are the joint business empires of Yousef Nada
and Idris Nasreddin, which sprawl across Europe and Africa and are
worth hundreds of millions of dollars.
Nada, an Egyptian national who lives in Switzerland, was designated a
terrorist financier by the United Nations on Nov. 9, 2001, and was
publicly accused by U.S. and U.N. officials of providing direct aid
to al Qaeda. Nasreddin, an Eritrean who lives in Italy, was
designated a terrorist supporter on April 24, 2002. At that time, the
assets of more than a dozen of their joint enterprises were supposed
to have been frozen, and a travel ban was imposed on the pair.
Both men have strongly denied any involvement in terrorist activities.
But U.S. officials and the U.N. report said that many of the pair´s
businesses, including a luxury hotel in Milan, continue to operate
and that both men violate the travel ban with impunity.
The U.N. panel found that on Jan. 28, Nada traveled from his home in
Campione d´Italia, in Switzerland, to Vaduz, Liechtenstein, to change
the names of two of the companies that were targets of the asset
Despite his designated status, he traveled under his own name and
even applied for and received a new passport shortly before leaving.
In Liechtenstein, Nada sought to liquidate both renamed companies and
listed himself as the liquidator, a move that would have allowed him
to pocket the proceeds. When U.N. officials discovered the move and
protested, the liquidation was halted.
Lawyers for the two men did not return telephone calls seeking
Victor Comras, a former State Department official who helped write
the U.N. report, said that, in the immediate aftermath of the
terrorist strikes, the United States and other countries effectively
froze some terrorist assets, but that the success was largely limited
to halting money in the banking system.
Once al Qaeda understood the weaknesses and loopholes in the
sanctions regime, Comras said, "money was quickly moved out of harm´s
way" by taking it out of banks and putting it into commodities, such
as diamonds and gold, or into front companies.
"Al Qaeda had assets, and those assets are still around," Comras
said. "They had a number of different ways to handle the problem, and
they are using all of them."
U.S. and U.N. officials said the lack of enforcement is especially
acute in Europe and Saudi Arabia, and they expressed dismay that, 27
months after the terrorist attacks, many countries have done little
to install a legal framework that would make the sanctions effective.
Most lacking in Europe are laws that would allow the seizure or
shutdown of shell companies, businesses and properties -- not just
bank accounts -- if there is evidence linking them to terrorism.
Legal issues, including how to confiscate properties when one owner
is a designated terrorist sponsor but others are not, present another
obstacle, officials said.
"The question is, how do you go after real properties and not just
bank accounts," said Juan C. Zarate, the Treasury Department´s deputy
assistant secretary for terrorist finance. "These are men of
resources, men of high finance who know how to reformulate their
businesses and how to move money."
U.S. and U.N. officials said that some failures to effectively
implement the sanctions stem in part from ignorance of the sanctions
regime, and that others are the result of bureaucratic inertia.
"The European Union has very strong regulations covering money and
travel issues in compliance with the United Nations," one U.N.
official said. "One has to question how some of these governments can
justify not being in compliance with EU regulations."
In addition, the body set up by the European Union to monitor
compliance with the U.N. regulations has only two people assigned to
the enforcement office and has no real authority.
U.N. and U.S. officials also said another problem is the ongoing
activity of charities that were supposed to have been shut down.
Several branches of the al Haramain Charitable Foundation, a Saudi
Arabia-based organization that in the past raised as much as $30
million a year, remain active, they said. Several offices of the
organization were directly implicated in the financing of al Qaeda,
and in May the Saudi government announced that the charity had been
required to suspend all activities outside Saudi Arabia.
"Al Haramain is still active in a number of countries and has just
opened a new Islamic school in Jakarta, Indonesia," the U.N. report
The al Haramain office in Saudi Arabia did not respond to telephone
calls, but in the past its leaders denied any links to terrorism.
U.S. officials said that shutting down al Haramain and ensuring that
other suspected terrorist financiers are put out of business by Saudi
Arabia is at the top of the two nations´ agenda.
Similarly, the U.N. report noted that the al Rashid Trust, a
designated Pakistani charity, "continues its operation in Pakistan
under various names and partnerships . . . it has continued to be
active in funding al Qaeda related activities as well as other social
and humanitarian projects."
The investigators also expressed concern about the alleged activities
of Wael Julaidan, a businessman who helped found al Qaeda and who was
designated by the U.N. on Sept. 6, 2002, as a terrorist financier.
Until last year, Julaidan was the Saudi chairman of the Rabita Trust,
a Pakistani charity also found by the United Nations to have funded
al Qaeda activities. U.N. and U.S. officials said Julaidan continues
to work in charities and to handle large sums of money.
A source with direct knowledge of U.S. actions said the "highest
priority of the U.S. government is to get the Saudis to do what they
said [they] would do and close down what they were supposed to close
down." The source noted that, after agreeing to put him on the U.N.
list, senior Saudi officials publicly denounced Julaidan´s
"Then the Saudis said he was questioned but wouldn´t tell us what he
said," the source said. "They said his assets are frozen, but won´t
say where. It´s like Humphrey Bogart in ´Casablanca.´ They round him
up when the pressure builds and are shocked to find anything going
A senior Saudi official disputed the U.S. and U.N. accounts of the
ongoing activities of al Haramain and Julaidan.
"Julaidan is not operating," the official said. "His assets are
frozen. Al Haramain cannot spend a penny outside Saudi Arabia. We are
doing what we can."
He added: "If they think al Haramain is doing something in Indonesia,
then it is up to the government of Indonesia to take action, not
Saudi Arabia." (© 2003 The Washington Post Company 12/14/03)
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