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Typologies of Terrorist Financing

(Article published in the Jun  3, 2009 issue of Manila Standard Today)

   The meetings called by Vic Aquino, executive director of the Anti-Money Laundering Council (AMLC), of the Financial Sector Liason Committee (FSLC) are among those I try my best to every time attend.  There is always something new to learn; always some interesting person to meet; not to mention, always a reasonable lunch or merienda to put a gustatory touch to the digestion of the ideas of well-chosen presentors. 

The 12th FSLC Meeting held on 13 May 2009 at the Turf Room, Manila Polo Club, Makati City, was no exception. In the morning meeting held that day, Vic Aquino unveiled his jewel, Ms. Mary Rose M. Alim of the AMLC Secretariat, who gave a most informative  powerpoint presentation on Terrorist Financing Typologies.

 Ms. Mary Rose M. Alim presented two case studies: the first, on the money flow within the global financial empire of the Al Queda as uncovered by the Financial Review Group that investigated the financing of the terrorist attack known as “9/11”; and the second, bringing the subject close to home, the flux of Al Queda financing to Muslim extremists in the country through the channels used by Al-Mujil, the bankroller of the Al-Qaeda network in Southeast Asia, and the Philippine responses thereto.

It has been established through, narrates Ms. Alim, that, worldwide, Al Queda gets its money a combination of 3 major sources, to wit, (a) criminal activities, such as burglarly and car thefts; (b) “legitimate” sources such as businesses that it runs and individual financiers ; and (c) donations from Muslim charities.  Combatting the first is essentially a police matter; addressing the other two is rather problematic for regulators and policy makers as well as for prosecutors and the courts.
 










     

The businesses undertaken by Al Queda are of the kind that conveniently justifies the moving around of people and funds.  For example, Al Queda runs Hjira Construction which is engaged in various infrastructure projects as well as  Al Ikhlas, Al Shifa and Al Nur  which are honey producers.  Both are claimed to be covers for smuggling of money, weapons and drugs. 

Individual financiers include those in the so-called “The "Golden Chain" which is a list of sponsors seized during the March 2002 raid by Bosnian police authorities of the premises of the Benevolence International Foundation (BIF) in Sarajevo. The list includes at least 20 top Saudi and Gulf State financial sponsors including bankers, businessmen, and former ministers. Non-Saudi individuals allegedly giving financial aid to Al Qaeda include a group of wealthy Spanish-Syrian dual citizens engaged in real estate business and a European chief financier. 

The prime example of Muslim charities that are said to be aiding Al Queda is the Benevolence International Foundation (BIF)  which has many offices in various cities in Europe, Asia, and America.  It is headed by Enaam Arnaout.  Although in a statement released in 10 February  2003, Arnaout claimed that the plea agreement he entered into on that day with the US prosecutors “is an acknowledgment by the government that neither Mr. Arnaout nor BIF ever provided any support to al Qaeda, Osama bin Laden, or any other terrorist organization,” many believe, on the contrary, that his pleading guilty to the charge of racketeering was really a smart legal maneuver to avoid further scrutiny and exposure of his links to Osama Bin Ladin.  A classic illustration of the “half-full, “half-empty” view points.

The countermeasures taken by the US to disrupt the global flow of funds to Al Qaeda have resulted in the freezing or seizure of about $112M funds determined to be destined for terrorist organizations; US$34.3M of them were in the US and $US77.8M in other countries.  The US has also gone after the fund-raising activities of charities like the BIF and has targeted the “informal” money remittance operations known as “hawalas”.

Terrorist funds get into our country, Ms. Alim continues, through the Philippine Branch of the International Islamic Relief Organization (IIRO) which is reputed to be supporting Islamic militant groups the world over.  Abd Al Hamid Sulaiman Al-Mujil (Al-Mujil, for short) who is the Executive Director of the IIRO Eastern Province (IIRO-EP) branch office in the Kingdom of Saudi Arabia, is identified as a major fundraiser for the Philippine Abu Sayyaf Group (ASG) and the Southeast Asian Jemaah Islamiyah (JI). 

In August 2006, the US Department of Treasury designated the Philippine branch office of the IIRO, as well as the Indonesian branch,  as "facilitating fundraising for Al Qaeda and affiliated terrorist groups." And three months later, In November, the United Nations Security Council Committee 1267, also referred to as the Al Qaeda and Taliban Sanctions Committee, put the Philippine  branch of the IIRO in its updated  "Consolidated List of individuals and entities belonging to or associated with the Taliban or Al Qaeda,".

A former ASG member in the Philippines familiar with IIRO operations in the country reported that a limited amount of foreign IIRO funding goes to legitimate projects and the rest is directed to terrorist operations. 

The Anti-Money Laundering Council has, of course, been at the forefront of trying to frustrate the flow of money to local terrorists. As of 31 December 2007, the AMLC had issued sixty (60) Resolutions directing all covered institutions to report to AMLC, transactions and assets, if any, of terrorist individuals and organizations as well as any person/group with links to terrorist organizations, i.e., Osama Bin Laden, Al-Qaeda, Jemaah Islamiyah, the Taliban, and other terrorist organizations designated by the UN Security Council, the United States and other foreign governments.

Specifically pointed out by Ms. Alim was Resolution No. 80 issued on 06 October 2006 requiring covered institutions to submit to the AMLC covered or suspicious transactions, if any, of, among others, IIRO and Al-Mujil. This was followed, after investigation showed that the IIRO owned bank account number 0200100100000011145671 with the Bank of Philippine Islands, by Resolution 81, series of 2006 authorizing the executive director of the AMLC-Secretariat or the Office of the Solicitor General to file an application for the issuance of a freeze order against the said bank account.

The Court of Appeals as a result issued its resolution freezing the account on 28 November 2006 which was complied with by the bank three days later.  On 12 February 2008, the Court of Appeal decided the case making the Asset Preservation Order permanent.  The necessary writ of execution for forfeiture was eventually issued about 6 months later and, in two days, the bank filed its compliance with the court.

If we could sleep a bit soundly nowadays without having to worry that we would wake up the next morning with the financial system gone awry on account of a terrorist attack, that is because some people in the government like the AMLC still do their job with nary a blitz in media nor a hint of fanfare. 

Eventually, the Court of Appeals did freeze not only the account but, in addition, “all related web accounts” of IIRO. 
 

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