Return to Newsletter Archive

AUTHOR:
TerrorismCentral Editorial Staff

TITLE:
TerrorismCentral Newsletter - March 09, 2003

SOURCE:
TerrorismCentral, March 09, 2003

TEXT:

This week's Feature Article summarizes the current Financial Action Task Force Report on Money Laundering Typologies, focusing on terrorist financing activities including abuse of charitable organizations and securities to transactions involving diamonds and gold.

CONTENTS:

NEWS HIGHLIGHTS OF THE WEEK:

1. World
2. Africa
3. Americas
4. Asia Pacific
5. Europe
6. Middle East
7. South Asia
8. Cyberterrorism and Information Warfare
9. Finance
10 Human Rights
11. Law and Legal Issues
12. Narco-terrorism
13. Transportation
14. Weapons of Mass Destruction
15. Recently Published

FEATURE ARTICLE:
FATF Money Laundering Typologies


NEWS HIGHLIGHTS OF THE WEEK


1. World

North Korea is running a nuclear reactor generating plutonium, begun testing missiles with a declared maritime exclusion zone in international waters, and intercepted a US surveillance plane but has failed to convince the US to engage in bilateral talks. Instead, the US sent 24 long-range bombers to Guam. North Korea claims this is in preparation for a preemptive strike against it. Since preemptive strikes comprise a major focus of US President Bush's foreign policy, this is a reasonable conclusion.

Judging from the debate in the UN this week, Iraq appears bound to be the first target of this policy. UN weapons inspectors have indicated continued progress, though unconditional proactive support for disarmament has not been forthcoming from Iraqi authorities. Russia, Germany, France and the vast majority of UN member states oppose a war in Iraq, saying that the situation can be resolved without a war -- that war is a failure and must be used only as a last resort. The US administration indicates this poses too great a security risk and they will proceed against Iraq alone if necessary. US- and UK- air strikes over the no-fly zone have increased dramatically, as have associated casualties.

Meanwhile, UN weapons inspectors continue to supervise the destruction of the proscribed Al Samoud 2 missiles, their related components and systems and they have provided additional documentation and interviews. Other Arab countries have called for Saddam Hussein to go into exile. Turkey may hold another vote regarding US troops. And large peace demonstrations around the world have continued unabated all week.


2. Africa

In Democratic Republic of Congo, the parties reached agreement on all outstanding issues regarding the draft transitional constitution. But heavy fighting in the northeast where Ugandan troops have battled rebels of both the Congolese Movement for Liberation (MLC) and the Union of Congolese Patriots (UPC) overshadowed the agreement. There are still questions regarding the details of security and the role of an international force in serving while a unified army is established.

Ivory Coast has seen continued conflict among government, rebel and French troops, but efforts to form a government of national reconciliation have continued, with the aim of resolving the deadlock by March 14.

Kenyan women and their property rights is the subject of a Human Rights Watch investigation that finds that "property rights abuses in sub-Saharan Africa perpetuate women's inequality, doom development efforts, and undermine the fight against HIV/AIDS". See http://hrw.org/reports/2003/kenya0303/. Looking at efforts to reform Kenya's judicial system, Gray Phombeah writes of being "Inside Kenya's 'worst' prison" as he visits a notorious jail. See http://news.bbc.co.uk/2/hi/africa/2816217.stm

In Liberia, two aid workers who had been taken away by rebels of Liberians United for Reconciliation and Democracy (LURD), have been found dead. A third is still missing.

In northeast Nigeria, seven policemen and at least 37 civilians were killed in fighting between Fulani nomads and local farmers. Later in the week, opposition politician Harry Marshall was assassinated, in what appears to be yet another political killing. A reward of almost $80,000 for the capture of his killers is on offer.

In preparation for the beginning of the next round of peace talks later this month, the Sudanese government and rebels of the Sudan People's Liberation Army are reviewing three areas in the center of the country that are not clearly delineated along the north/south divide.

Ugandan rebels of the Lord's Resistance Army (LRA) announced a ceasefire. Two boys abducted by the LRA have been charged with treason, an action that Human Rights Watch and others have protested. http://hrw.org/press/2003/02/uganda021903-ltr.htm

Zimbabwe is featured in a series of articles by Carolyn Dempster of BBC News http://news.bbc.co.uk/2/hi/africa/2818297.stm. US President Bush has signed an executive order imposing economic sanctions against Zimbabwean President Mugabe and 76 other government officials.


3. Americas

Argentine intelligence has identified four Iranian officials (and Lebanese Hezbollah) as involved in the 1994 bombing of the Argentine-Israeli Mutual Association that killed 85. A local judge has asked Interpol to arrest the four Iranian officials. Details of the intelligence report have not yet been released.

Brazil's Landless Rural Workers Movement (MST) has organized more land invasions, ending a truce because they have seen no movement towards land reform.

Colombian rebels continue to hide their secrets as the US continues to search for three US intelligence officers that were kidnapped three weeks ago. See Rachel Van Dongen's article "Perils face US rescue in Colombia" in The Christian Science Monitor, March 7, 2003.

At the Mexican border, there are reports of increasing tensions with US authorities as the new Department of Homeland Security increases border patrols. In the past month there were seven incidents of violence

Peru's coca farmers agreed to refrain from strikes and road blockages while the government works to gain financial support from the US for a new program that would replace coca with other crops.

Peru has enlisted help from Interpol to arrest former president Alberto Fujimoro and extradite him from Japan.

In the US, fears that war against Iraq could unleash a new wave of terrorism were expressed by increasing numbers, including Homeland Security Secretary Tom Ridge and FBI whistle-blower Coleen Rowley. The US Department of Education has developed a web site to provide schools with information on emergency preparedness. http://www.ed.gov/PressReleases/03-2003-03072003.html

And facing a likely war in Iraq, concern has also been raised regarding US treatment of prisoners. The Department of Defense released a draft military commission instruction, "Crimes and Elements for Trials by Military Commission", for public comment. (http://www.defenselink.mil/news/Feb2003/d20030228dmci.pdf). It lays out a proposed list of 24 war crimes to be judged by military tribunals. Since this continues the concept of unlawful combatants, it is not likely to help the prisoners held in Guantanamo Bay, where around 20 detainees have apparently been moved to a medium-secure area in reward for cooperation.

Interrogation of prisoners has also drawn attention this week; particularly after two prisoners captured in Afghanistan were beaten to death while being questioned at Bagram air force base. Their deaths have been listed as homicide, but not details regarding the internal investigation have been released. There are still more than 600 prisoners in Guantanamo being held indefinitely without charge and many more held elsewhere. Raymond Bonner, Don Van Natta Jr and Amy Waldman write of "Questioning Terror Suspects In a Dark and Surreal World" in he New York Times, March 9, 2003. Jess Bravin and Gary Fields ask, "How Do US Interrogators Make a Captured Terrorist Talk?" in The Wall Street Journal, March 4.


4. Asia Pacific

Australia and the Philippines have signed a cooperation agreement that increases intelligence sharing, law enforcement and training to combat terrorism.

With China's National People's Congress annual meeting under way, dissent has been further curtailed with additional arrests and further restrictions on Internet content. Meanwhile, last weeks university bombings have been attributed to a farmer seeking fame, not to terrorism.

East Timor will continue to have a full UN force rather than the planned cutback in light of deteriorating security reflected in a rise in violence and militia activities allegedly supported by Indonesian soldiers.

Indonesia has passed new anti-terrorism legislation authorizing increased surveillance as well as the death penalty and detention without trial. In Aceh, peace monitors were attacked and slightly injured, but the implementation of the ceasefire terms, including partial autonomy, has continued with the opening of the first Sharia court.

In the Philippines island of Mindanao, a large bomb went off outside the airport, killing 21 and wounding more than 150. The Abu Sayyaf attempted to claim credit for the attack, but their claim was dismissed as beyond the reach of the criminal gang. Investigations found the body of Montasher Sudang, a member of the separatist Moro Islamic Liberation Front (MILF) with explosives strapped to his body. It is believed that the bomb was contained in his backpack and that he was a suicide bomber. Police have now filed charges against 150 MILF members. Later in the week, MILF rebels attacked three towns, killing at least eleven. The US and Philippines have suspended a mission planned against Abu Sayyaf when they could not agree on a definition of the operation that would comply with the constitutional prohibition on foreign troops operating in domestic combat.

In Thailand 50 police officers are under investigation in connection with a war on drugs that has killed more than a 1,100. While some of the deaths are the result of inter-gang warfare, the methods and motives of the effort have been called into question.


5. Europe

In Bosnia-Herzegovina, peacekeeping troops (S-FOR) are hunting for former Bosnian Serb leader Radovan Karadzic and former military commander Ratko Mladic, wanted for war crimes. Their activities coincide with financial sanctions imposed against them and their associates to help disrupt support to the fugitives. Also in Bosnia, a human rights panel has ordered more than $2 million in compensation be paid in compensation for the Srebrenica massacre of 1995.

Greece has begun the trial of alleged members of the infamous November 17 terrorist group, that defied capture for three decades. The trial of 18 men and one woman is being held in a specially secured courtroom. Security is particularly important as Athens prepares for securing the 2004 Olympic games.

Ireland and Britain have held intensive discussions over restoration of devolution to Northern Ireland. While progress has been made, it was decided to delay elections for the Northern Ireland assembly from May 1 to May 29 to give more time for the negotiations.

In Italy, a policeman was shot dead in a gun battle with two suspected Red Brigade guerillas. One of the suspects, Nadia Desdemona Lioce, was arrested. Her companion, Mario Galesi, was injured and died in hospital.

Russia announced plans to reduce troops and equipment in Chechnya, indicating improved security prior to the scheduled referendum. Shortly after this announcement, an attack against the Grozny mayor's convoy killed three soldiers, four bodyguards, and one Chechen rebel.

Spanish police have arrested five suspects connected with the Tunisian synagogue attack last year.

In the UK, London plans to simulate a catastrophic terrorist attack to test its ability to respond. A web site with additional information is being developed. (http://www.homeoffice.gov.uk/terrorism/)


6. Middle East

The Middle East Quartet (US/EU/Russia/UN) plan for peace between Israel and the Palestinians is at a standstill as US President Bush, having delayed publication of the plan until after the Israeli elections, now wants a delay until after a resolution of the Iraqi crisis. This has happened despite increasing violence and severe economic problems in the region. The World Bank has published reports demonstrating the collapse of the Palestinian economy, in which more than 60 percent now live on less than two dollars a day and unemployment exceeds 50 percent, as the result of Israeli travel restrictions, curfews and closures. (http://www.worldbank.org/we)

It was a particularly bloody week in Israel and the occupied territories. In a crackdown against the Islamic militant group Hamas, Israeli Defense Forces continued their incursion in the Gaza Strip. They arrested senior Hamas leader Sheikh Mohammed Taha and his five sons as well as demolishing four houses. In one of those houses a woman who was 9 months pregnant was crushed under the rubble and seven others also killed. Both the UN and the United States condemned the increasing use of demolitions and the civilian deaths that have resulted from this practice.

In a separate incident, a 75-year-old shepherd was shot dead for riding his donkey in a prohibited area near Gaza. In an Israeli raid in Jenin, a teenage member of Islamic Jihad was killed and later than evening another man was shot dead in a stone-throwing incident.

Next, after a lull of two months, came a suicide bombing in Haifa. The Palestinian suicide bomber killed 15 bus passengers, at least 8 of them students under 18, and dozens more injured.

In revenge for this attach, Israeli forces raided a Palestinian refugee camp in Gaza, killing 11 and injuring more than 140. This attack is under investigation because many of the civilian casualties were the result of a tank shell directed against a group of Palestinians attempting to put out a fire. The dead included three children and a fireman.

Next, Palestinian militants infiltrated a Jewish settlement and killed two Israelis before they were killed in turn. In an Israeli missile attack on a car, four Hamas members were also killed, including militant leader Ibrahim al-Maqadma.

Meanwhile, Mahmoud Abbas (Abu Mazen), a senior PLO leader, will become the first Prime Minister of the Palestinian Authority.

Elsewhere in the Middle East...
Iran's parliament has passed a bill to guarantee free parliamentary elections.

Kuwait has arrested five suspected Islamic militants.

Oman has appointed its first woman minister; Sheikha Aisha bint Khalfan bin Jameel al-Sayabiyah will be minister for the National Authority for Industrial Craftsmanship.


7. South Asia

In Afghanistan and the border areas with Pakistan and Iran, the hunt for Osama bin Laden and al Qaeda members has intensified following last week's arrest of Khalid Sheikh Mohammed. Seven suspects have been taken into custody. However, the continued investigations have led to resentment among Afghan residents.

A court in India has ordered excavation of the disputed Ayodhya site in the northern state of Gujarat. The site is disputed between Hindus and Muslims and the destruction of a mosque on the site triggered religious riots across India in 1992 that killed more than 2,000 and continued sectarian conflict ever since.

In the Indian state of Assam, separatist rebels of the United Liberation Front of Asom (ULFA) blew up an oil refinery and pipeline, but there were no injuries.

Talks in Indian-administered Kashmir have begun with the goal of resolving the long-standing dispute, but Pakistan will not be party to the talks.

Continued tension between India and Pakistan is largely unabated. There has been speculation that Pakistan has moved its nuclear arsenal around to evade possible strikes against it by India or the US. Pakistan also has a new medium-range missile system, the Shaheen -1.

In Sri Lanka, the Tami Tigers and the UN have agreed to develop a plan to help children affected by the war and reconfirmed the agreement not to recruit soldiers under 18. The Tigers have also asked for advice on transforming from a military to a political group from South Africa's African National Congress (ANC).


8. Cyberterrorism and Information Warfare

Card association company Visa has given merchants a deadline of July 2006 to change their point-of-sale terminals to mask all but the last four digits of the credit card number. This deadline is in response to the massive problem of identity theft. Other vendors have also called for this measure, but Visa is the first to set a deadline.

Given the scale of recent thefts of personal data, 2006 seems a long time to wait. Last week Hackers stole personal identification details of more than 55,000 students, former students and employees at the University of Texas. The International Chamber of Commerce has pointed out that techniques used to steal credit card information can also be used for other types of financial fraud. And in a major investigation, the Financial Times has reported on fraud carried out by criminals infiltrating banking systems. See Michael Peel, "Bogus websites, stolen corporate identities: how Nigerian fraudsters steal millions from western banks" Financial Times, March 3, 2003.

Belgian company ScanIT offers a free tool that will test the security of your web browser. http://webtest.scanit.be/bcheck/

9. Finance

Momcil "Momo" Mandic, Milovan "Cicko" Bjelica, ManCo Oil Company and Privredna Banka Sarajevo have been designated under Executive Order 13219 for financial and material support of indicted war criminal Radovan Karadizic

Mohammed Ali Hassan al-Moayad and Mohammed Mohsen Yahya Zayed are wanted in the US for providing financial and material support to al Qaeda and Hamas. The two men were arrested in Germany in January. The US has requested their extradition.

US President Bush has signed an executive order imposing economic sanctions against Zimbabwean President Mugabe and 76 other government officials.

The US Treasury has opened the Executive Office for Terrorist Financing and Financial Crimes whose duties are:
* Develop and implement strategies to counter terrorist financing
* Develop and implement National Money Laundering Strategy and other policies
* Participate in implementation of the patriot act
* Develop government policies and provide internal policy guidance


10. Human Rights

The US Department of Defense released a draft military commission instruction, "Crimes and Elements for Trials by Military Commission", for public comment. (http://www.defenselink.mil/news/Feb2003/d20030228dmci.pdf). It lays out a proposed list of 24 war crimes to be judged by military tribunals. This excludes genocide and other crimes against humanity that may occur off the battlefield. The proposed crimes and elements are:
1. Willful Killing of Protected Persons
2. Attacking Civilians
3. Attacking Civilian Objects
4. Attacking Protected Property
5. Pillaging
6. Denying Quarter
7. Taking Hostages
8. Employing Poison or Analogous Weapons
9. Using Protected Persons as Shields
10. Using Protected Property as Shields
11. Mutilation or Maiming
12. Use of Treachery or Perfidy
13. Improper Use of Flag of Truce
14. Improper Use of Protective Emblems
15. Degrading Treatment of a Dead body
16. Rape
17. Hijacking or Hazarding a Vessel or Aircraft
18. Terrorism
19. Murder by an Unprivileged Belligerent
20. Destruction of Property by an Unprivileged Belligerent
21. Aiding the Enemy
22. Spying
23. Perjury or False Testimony
24. Obstruction of Justice Related to Military Commissions
As well as the following Other Forms of Liability and Related Offenses
1.Aiding or Abetting
2. Solicitation
3. Command/Superior Responsibility -- Perpetrating
4. Command/Superior Responsibility -- Misprison
5. Accessory After the Fact
6. Conspiracy
7. Attempt

The US Supreme Court is considering a case of whether mentally ill defendants may be medicated against their will in order to make the individual sane enough to be executed.

Kenyan women and their property rights is the subject of a Human Rights Watch investigation that finds that "property rights abuses in sub-Saharan Africa perpetuate women's inequality, doom development efforts, and undermine the fight against HIV/AIDS". See http://hrw.org/reports/2003/kenya0303/. Looking at efforts to reform Kenya's judicial system, Gray Phombeah writes of being "Inside Kenya's 'worst' prison" as he visits a notorious jail. See http://news.bbc.co.uk/2/hi/africa/2816217.stm


11. Law and Legal Issues

Yasser Arafat faces legal action begun by seven French citizens living in Israel, relatives of Jewish victims killed during the current intifada. They accuse Arafat of crimes against humanity and genocide for supporting the uprising and its acts of terrorism.

Mohamed Atriss has been sentenced to five years probation and fined $15,000 for selling false identification documents, including documents provided to two of the September 11 hijackers. No evidence was found linking him to terrorism, although at the time of his arrest the bail hearing was closed and all proceedings sealed.

Leonidas Bimenyiamana, Francois Karake and Gregoire Nyaminami have been extradited from Rwanda to the US for the 1999 murder of eight tourists, including two Americans. They are believed to be members of the Liberation of Rwanda that was made up of Hutu militia rebels involved in the 1994 genocide.

Philip Blaney was convicted of the manslaughter of Elizabeth O'Neill in 1999, the consequence of a pipe bomb attack by loyalists in Northern Ireland.

En-Wei Eric Chang and David Chu have been indicted for conspiracy to purchase weapons for Iran.

Seamus Daly, accused of belonging to the Real IRA, an unlawful organization, has been granted bail in Ireland.

Charalumvos Dousemetzis was charged with terrorism-related offenses in Northumberland, England. The Greek government has formally protested his arrest.

Sheik Abdullah el-Faidal, a Muslim cleric in London, has been jailed for nine years following his conviction for soliciting murder and using threatening and insulting words and recordings.

Peru has enlisted help from Interpol to arrest former president Alberto Fujimoro and extradite him from Japan.

John Walker Lindh, the "American Taliban" was attacked by a fellow prisoner as he prepared to pray, suffered minor injuries, and has been moved to solitary confinement for protection. Jane Mayer asks, "Why did the government's case against John Walker Lindh collapse?" in her article "Lost in the Jihad" published in The New Yorker, March 10, 2003.

Nadia Desdemona Lioce was arrested in Italy after shooting a policeman. She is a suspected member of the Red Brigades, allegedly involved in shooting government advisor Massimo D'Antona in 1999.

Andrew Logan, charged with having information useful to terrorists and having explosives and firearms, has been refused bail in a court hearing in Northern Ireland.

Huang Minxiang has been arrested in China in connection with the two university bombings on February 27 that injured nine.

Mohammed Ali Hassan al-Moayad and his assistant Mohammed Mohsen Yahya Zayed are wanted in the US for providing financial and material support to al Qaeda and Hamas. The two men were arrested in Germany and the US has requested their extradition.

The trial of 19 members of November 17, (the terrorist group responsible for 23 murders and more than a hundred bombings in the 1970s), has opened in Athens. More than 2,000 charges were read out against them. Most of the suspects have denied all charges.

The trial of Johannes Weinrich, accused of carrying out bomb attacks in 1982-3 in association with Carlos the Jackal, has begun in Berlin.


12. Narco-terrorism

The US State Department's International Narcotics Control Strategy Report puts Afghanistan number one in heroin production, overtaking Burma. http://www.state.gov/g/inl/rls/nrcrpt/2002/


13. Transportation

As part of their initiatives to tighten border security, Australian Customs Service plans to require incoming flights provide detailed passenger information prior to landing.

The US FBI and Transportation Security Administration have begun assessing airport vulnerability to shoulder-launched missiles.


14. Weapons of Mass Destruction

The US Pentagon, backed by the Bush administration, has asked that Congress list a ban on small, tactical nuclear warheads. A nuclear earth-penetration weapon is also being evaluated for use to destroy underground facilities in North Korea and elsewhere.

The US Senate unanimously approved the Moscow Treaty to reduce nuclear weapons.

To encourage more smallpox vaccinations, the US government has offered a compensation program for those who become ill.


15. Recently Published

Alston Chase, "Harvard and the Unabomber: The Education of an American Terrorist" Norton

Amos Elon, "The Pity of it All: A Portrait of the Jews in Germany, 1743-1933" Penguin press/Metropolitan Books.

Robin Kirk, "More Terrible Than Death: Massacres, Drugs, and America's War in Colombia". Public Affairs.

Pumla Gobodo-Madikizela, "A Human Being Died That Night", Houghton Mifflin. (about the South African Truth and Reconciliation Commission)

Robert D. Kaplan, "A Tale of Two Colonies: Our correspondent travels to Yemen and Eritrea, and finds that the war on terrorism is forcing U.S. involvement with the one country's tribal turbulence and the other's obsessive fear of chaos." The Atlantic Monthly, April 2003.

John Lloyd, "Poverty, criminal networks, destructive leaders: when does a collapsing state create a haven for terrorists?" Financial Times, March 7, 2003.

Scott Peterson, "Iraq: Saladin to Saddam" The Christian Science Monitor, March 4, 2003

Dana Priest. "The Mission: Waging War and Keeping Peace With America's Military" Norton

Joseph Roth, translated by Michael Hofmann, "What I Saw: Reports from Berlin 1920-33" Granta/Norton


FEATURE ARTICLE: FATF Money Laundering Typologies

This year's Financial Action Task Force (FATF) Report on Money Laundering Typologies updates methods and trends in money laundering and reports on additional discoveries related particularly to terrorist financing. These annual reports are particularly useful in ensuring that the current activities and experiences in combating money laundering and terrorist financing are accurately reflected in the FATF's 40 Recommendations and in industry best practices, and that this knowledge is shared.

One important distinction pointed out in the report is that while money laundering is used to process the funds of criminal activities; terrorist groups also rely on legitimate sources of income. However, the methods used by criminal and terrorist organizations to disguise the source of funds (launder the money) are much the same. These include front companies, shell companies, informal funds transfer systems, use of family or colleagues to conduct transactions, structuring transactions below reporting thresholds, cash on credit cards, wire transfers and smuggling.

Because terrorist financing so often relies on legitimate sources of funding, it is necessary to consider multiple factors to determine such a connection. In this connection, the report provides details of the use of non-profit organizations and informal money transfer systems.

Non-profit organizations normally serve critical social functions, but the FATF report describes ways they can be misused. For example, terrorist supporters could infiltrate an organization, using their positions to divert funds without the knowledge of the donors or the organization. Similarly, the organization could be used as an intermediary or cover for operational support. It is also possible that an organization is established to channel funds to a terrorist organization, using its stated charitable purpose only as a disguise.

It is difficult to detect such misuse, particularly given the different standards of accounting, record-keeping and cultural attitudes towards charitable giving. Terrorist connections have been uncovered by seeing linkages with lists of known terrorist associates. Other suggestions are provided in http://www.fatf-gafi.org/TerFinance_en.htm.

Informal money transfer systems provide crucial non-bank financial services -- in some geographies they are the only way to transfer money or other value. These include systems such as hawala, hundi, fei-chen, and so on. Unfortunately, despite their critical importance in many developing countries, the lack of documentation and operation outside of conventional international financial channels leave them open to abuse.

This report describes several ways in which terrorists have taken advantage of these informal systems, often with the use of distributed import/export schemes. Detecting these activities tends to rely on identifying funds transfers not commensurate with the size or type of business, or ties to particular geographic areas. A number of efforts are underway to license transfer system operators and work on greater transparency of their activities.

In the US, the Patriot Act and subsequent US Treasury rules have laid out new rules for funds transfers and other financial sectors that had not previously been subject to anti-money laundering regulations. One of the largest areas affected by the expanded requirements has been that of the securities sector.

The FATF has now gathered significant new information on money laundering in this sector. The global scale and high volume of securities, as well as the profit from the investments themselves, make securities attractive for money laundering. FATF had previously viewed securities as a way to layer and integrate funds, but have now identified cash payments and commissions as offering ways for illicit cash to enter the system as well. Leveraging multiple jurisdictions and disguising ownership through nominees, trusts, and so on are used as they are with other transactions.

Similarly, the insurance sector has been vulnerable to abuse, viewed similarly as that of the securities markets. More investigation of these vulnerabilities will be conducted in the future. Possible uses of credit and debit cards for money laundering and terrorist financing will also be investigated further.

Another area of much speculation regarding terrorist financing has been around the suggestion that al Qaeda has transferred funds to diamonds and precious metals. In addition, FATF has been concerned over the use of these materials to support armed conflict and support other money laundering activities.

During this year's review, FATF found there had been several reports of funds transfers involving proscribed groups or individuals. They cite a case involving a person in the Middle East linked to organized crime and trafficking of African conflict diamonds as well a transaction in diamonds financing an Islamic terrorist organization linked to a sanctioned individual. Apart from links to known entities, there is no other way to distinguish diamond or gold trafficking for the benefit of terrorism versus other money laundering or criminal activities.

The review ends by summarizing the findings and looking at other trends. They cite a continued rise in suspicious activity reports, often tied to persons and entities on proscribed lists. This started after September 11 but has continued to rise rather than leveling off. There also have been some reports generated following the introduction of the Euro.

For the full report and further information on the Financial Action Task Force see http://www.fatf-gafi.org


HOW TO CONTACT US:

Please contact us with your questions or comments by sending email to .

We look forward to hearing from you.
Editorial Team
TerrorismCentral
All Rights Reserved. Copyright © 2003 by TerrorismCentral.