[iwar] [fc:War.On.Al.Qaeda.Funds.Stalled]

From: Fred Cohen (fc@all.net)
Date: 2002-08-29 07:15:59
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From: Fred Cohen <fc@all.net>
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Date: Thu, 29 Aug 2002 07:15:59 -0700 (PDT)
Subject: [iwar] [fc:War.On.Al.Qaeda.Funds.Stalled]
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Washington Post
August 29, 2002
War On Al Qaeda Funds Stalled 
Network 'Fit and Well,' Ready to Strike, Draft of U.N. Report Says 
By Colum Lynch, Special to The Washington Post
UNITED NATIONS, Aug. 28 -- A global campaign to block al Qaeda's access to
money has stalled, enabling the terrorist network to obtain a fresh infusion
of tens of millions of dollars and putting it in a position to finance
future attacks, according to a draft U.N. report.
In the months immediately following the Sept. 11 attacks, the United States
and other U.N. members moved to shut down al Qaeda's financial network,
freezing more than $112 million in assets belonging to suspected members and
supporters of the organization.
But only $10 million in additional funds has been blocked over the past
eight months, according to the 43-page draft report, which was written by a
U.N. panel responsible for monitoring the enforcement of an arms, travel and
financial embargo against al Qaeda and its associates.
Al Qaeda continues to draw on funds from the personal inheritance of Osama
bin Laden, the Saudi-born militant who heads the network, as well as from
investments and money diverted or embezzled from charitable organizations,
according to the draft report.
The report of the Monitoring Group on al Qaeda, which is expected to be
released next week, offers a rare survey of the state of the financial war
on terrorism. In the aftermath of the attacks in New York and on the
Pentagon, President Bush announced the freezing of assets of dozens of
organizations and individuals linked to al Qaeda, and U.S. diplomats
harnessed the authority of the U.N. Security Council behind the effort. The
Security Council adopted a resolution requiring the United Nations' 189
members to seize the assets of individuals placed on a U.N. list of
suspected associates of al Qaeda.
Despite this campaign, the report says, al Qaeda's financial backers in
North Africa, the Middle East and Asia manage at least $30 million in
investments for the group, with some estimates going as high as $300
million. The money reportedly includes investments from Mauritius,
Singapore, Malaysia, the Philippines and Panama, it says.
Al Qaeda is also suspected of having bank accounts under the names of
unidentified intermediaries in Dubai, Hong Kong, London, Malaysia and
Vienna. And private donations to the group, estimated at $16 million a year,
are believed to "continue, largely unabated," the report says.
"Despite initial successes in locating and freezing" al Qaeda assets, the
network "continues to have access to considerable financial and other
economic resources," the report says, adding that it has proven "exceedingly
difficult" to identify these funds.
"Al Qaeda is by all accounts 'fit and well' and poised to strike again at
its leisure," it says. "The prime targets of the organization are likely to
be persons and property of the United States of America and its allies in
the fight against al Qaeda, as well as Israel."
The U.N. panel says the task of blocking al Qaeda's funds has been
frustrated by the group's decision to shift its assets into precious metals
and gems, and to transfer its money through an informal money exchange
network, known as hawalas, that is virtually impossible to trace. Revenue
from hard-to-track "illegal activities including smuggling, petty crime,
robbery, embezzlement and credit card fraud augment these funds," it says.
But the effort to shut down al Qaeda's financial network has also been
hampered by the inadequate auditing of religious charities, the lax border
controls in several European countries -- members of the Schengen Area
group, which allow travelers to cross their borders with a single visa --
and the "stringent evidentiary standards" required by European governments
before they will seize an individual's assets, the draft report says.
The report says the Schengen Information System -- a computer program used
to monitor border crossings in the group's 15 member states -- holds in its
database only 40 of the 219 names on the U.N. list. Several members of the
Schengen group said their "national laws precluded them from placing" their
citizens' names on "national watch lists without appropriate judicial
basis," according to the U.N. report.
The Schengen group is made up of 13 European Union members as well as Norway
and Iceland. Britain and Ireland are the only EU members that are not part
of the group.
The U.N. panel warns that the refusal of key European countries to fully
comply with the Security Council's sanctions could have a "derogatory
impact" on the effort to shut down al Qaeda's financial operations.
European governments have faced legal challenges from citizens on the U.N.
list who say they have been denied their right to a trial, which is
enshrined in the Council of Europe's Human Rights Charter. They have
expressed concern that the procedures for placing individuals on the
sanctions list lack the legal safeguards required by their own courts for
the freezing of assets.
"Several states have indicated that they are facing legal challenges to the
blocking of assets," the report says. They have also cited humanitarian
concerns and the dearth of evidence linking suspects to terrorist
activities.
Luxembourg told the U.N. sanctions monitors that it recently released the
assets of an unidentified organization allegedly linked to Al Barakaat, a
Somali-based money exchange company that the Bush administration charges has
been used by al Qaeda. The Luxembourg government said the country's banking
regulatory agency "did not have access to releasable intelligence
information related to the case." Luxembourg had previously frozen the
group's assets at the request of the United States, according to diplomats.
Switzerland has "indicated that it has released small amounts of money from
frozen accounts for personal and business expenses where account holders
have demonstrated hardship," the report says. Swiss officials said that a
government decree authorizing the blocking of assets requires that funds be
made available to enable account holders to meet basic humanitarian needs.
Germany has signaled that it may face "legal constraints" in the blocking of
assets of individuals being pursued by the United Nations, the report says.
"German authorities are closely cooperating with the [U.N.] monitoring group
to reach full implementation of the U.N. Security Council sanctions," said
Dirk J. A. Rotenberg, a spokesman for the German mission to the United
Nations. But he added that any action must conform with Germany's legal
system and the "rule of law."
In its report, the U.N. panel says that scores of individuals who have been
linked to al Qaeda -- including Suleiman Abu Ghaith, bin Laden's Kuwaiti
spokesman, and Gulbuddin Hekmatyar, a powerful Afghan chieftain -- have not
been placed on the list, making it difficult for governments to freeze their
assets. It also says 38 individuals who have been arrested in 13 countries
-- including the United States, Italy, Pakistan and Morocco -- have not been
added to the U.N. list. The panel does not name them.
In response to those concerns, the United States and Italy today jointly
introduced to the Security Council committee that oversees the al Qaeda
sanctions list the names of 11 individuals and 14 businesses that are
allegedly linked to al Qaeda.
The United States has also sought to address some of the European concerns
by proposing a Security Council resolution allowing suspected supporters of
al Qaeda to withdraw money to meet their basic living needs. But Washington
has continued to press its European allies to fully comply with the U.N.
sanctions. "We are concerned about it, and we have raised this issue
bilaterally with the Europeans," a U.S. official said. "We have been told
that it's not as big a problem as claimed in the report."
The U.N. panel's report also cites the failure of the U.S. and other
governments to provide complete information about the suspected al Qaeda
members. It warns that the publication of distinct terrorist lists by the
United Nations, the European Union, the United States and other countries is
creating confusion and undermining the efforts to freeze al Qaeda assets.

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