---

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:
Corsica

NEWS HIGHLIGHTS OF THE WEEK

---

1. World

The International Atomic Energy Agency says that North Korea poses the "most immediate and most serious threat" to control nuclear proliferation. They claim they have enough plutonium now to produce six nuclear bombs. New intelligence reports allege they may have a second nuclear facility. There have been exchanges of machine gunfire in the demilitarized zone.

The international AIDS conference last week was dominated by the lack of funds. The statistics are damning. The US has committed only 2 cents per $1,000 of US income to the Global Fund next year, only $200 million out of an income of more than $10 trillion. The EU is committing $1 billion, or $3 per head in Europe. The US spends more on two days of operations in Iraq than the amount needed by Global Fund. There is even a worldwide shortage of condoms. Meanwhile, 15,000 Africans die every day from HIV/AIDS, tuberculosis and malaria.

This week, the US General Accounting Office (http://www.gao.gov) released a report on Foreign Assistance "Observations on Post-Conflict Assistance in Bosnia, Kosovo, and Afghanistan" that finds three things are necessary for effective aid:
* A secure environment where humanitarian and other civilian workers are able to perform their tasks;
* A strategic vision that looks beyond the immediate situation and plans for ongoing efforts; and
* Strong leadership with the authority to direct assistance operations."

The "Iraq Post-Conflict Reconstruction Assessment Mission Report" by the Center for Strategic and International Studies (http://www.csis.org) indicates that none of these conditions are in place. They cite seven major areas in need of immediate attention:

The Economist has published "Priceless: A Survey of water", July 19. Read this, in conjunction with our prior reports:

---

2. Africa

Burundi's government and rebels of the FDD are meeting with other African leaders in Tanzania to discuss conflict resolution. Rebels of the FNL are not part of this meeting and their attacks against the capital Bujumbura continue.

Democratic Republic of Congo failed to launch the new power-sharing transitional government following the refusal of ministers from former rebel groups to swear loyalty to President Kabila.

In Ethiopia, a bomb at a popular nightclub exploded, injuring 31 people. No fatalities have yet been reported. Police have launched a detailed investigation, connecting the attack to prior terrorist warnings.

Gabon's President Omar Bongo, already in office for 36 years (second only to Togo's President Eyadema) will be allowed to run for office as often as he wishes following amendments to the constitution.

Kenya's parliament has rejected the draft Suppression of Terrorism Bill, feeling it threatened fundamental human rights.

Liberian rebels have pressed on towards the capital, Monrovia, in defiance of the ceasefire. With President Charles Taylor's announcement he is willing to leave, his soldiers are no longer as willing to risk their lives to defend him. Thousands of civilians continue to flee the fighting. The US has still not decided whether it would offer assistance, but did say that no US troops would be provided under a UN command or until after Taylor had left.

Sao Tome and Principe has become the latest victim of oil riches with a coup that has displaced the current government. International discussions over a potential diplomatic solution are continuing.

South Africa has been warned by the World Bank of a complete economic collapse if the HIV/AIDS epidemic is not contained. A leaked South African government study has found that providing AIDS drugs immediately could save up to 1.7 million people. The government continues to delay providing drugs, including antiretroviral treatment for pregnant women that is highly effective in preventing transmission from mother to baby.

The Ugandan army says it has rescued 250 people, mostly children that had been abducted last month by Lord's Resistance Army rebels. 45 children abducted by LRA were drowned when forced to cross a river.

Former Ugandan leader Idi Amin is in a coma, on life support in hospital in Saudi Arabia.

Zimbabwe's fuel shortage is so desperate there has now been a case in which a corpse was lent to a black market fuel dealer so he could claim diesel reserved for burials. http://www.mg.co.za/Content/13.asp?a=37&o=24967

---

3. Americas

Argentina President Nestor Kirchner and Jewish leaders commemorated the 9th anniversary of the bombing of a Jewish community center that killed 85 and injured more than 200. Kirchner has ordered that sealed intelligence files on the attack be opened.

Canadian/Iranian photographer Zahra Kazemi was beaten to death in custody in Iran. Her son and the Canadian government has asked for her body to return to Canada, but Iran has not acknowledged her duel citizenship nor provided details of the autopsy and other events surrounding her death.

An investigation by Canada's National Post reveals 59 war criminals from 24 countries are at large after immigration authorities lost track of them.

Colombian rebels of the Revolutionary Armed Forces of Colombia (FARC) have asked to meet with UN Secretary General Annan, following his appeal that FARC free its hostages. The rightwing paramilitary United Self-Defence Forces of Colombia (AUC) have agreed to peace talks and to start demobilizing its 10,000 gunmen. President Alvaro Uribe relocated his government to Arauca for three days, to demonstrate the state is in control even in the heart of the conflict.

In Cuba, three people were killed in a hijacking attempt. Three days later, there was another hijacking, but the US Coast Guard intercepted the boat and took the hijackers taken into custody. Cuba has denied intentionally jamming US satellite TV broadcasts to Iran. It does routinely block US propaganda broadcasts directed to Cuba.

Guatemala's constitutional court has lifted the ban on General Rios Montt seeking the presidency. The General took power in a 1982 coup, and during his year in power ordered the massacres of thousands of Mayans.

Kingston, Jamaica hosted a meeting of hundreds of Rastafarians to discuss their faith, helping the end global conflict, and repatriation to Africa.

Mexican police have arrested nine people suspected of links to the Basque separatist group ETA.

The US administration is under increasing pressure regarding the use of intelligence in making the decision to go to war in Iraq, as well as the casualties (now exceeding the number killed in 1991) and the extended stays of the army personnel.

The US Department of Defense has transferred 27 Guantanamo Bay detainees to their home countries. There have also been ten new arrivals, for approximately 600 total detainees. The US has agreed to suspend military court proceedings against Australian and British detainees pending diplomatic discussion.

---

4. Asia Pacific

Australian Federal Police counter-terrorism chief, Ben McDevitt, has warned there is a network of terrorist sympathizers that provides a financial and logistical support network to offshore extremists. Australia's counter-terrorism agencies are reviewed in a 2-part report in the Sydney Morning Herald
http://www.smh.com.au/articles/2003/07/13/1058034872119.html
http://www.smh.com.au/articles/2003/07/14/1058034942400.html

Burma's military government charge that opposition leader Aung San Suu Kyi and her democratic movement were planning an uprising including ethnic rebel groups and that her detention was in response to this threat. But amid eyewitness evidence that the Burmese army was responsible for the attack against Aung San Suu Kyi, international protest against her detention has continued, and the US has imposed economic sanctions.

Protests in Hong Kong continued during the beginning of the week. Two senior officials resigned and there is much pressure on the territory leader Tung Chee-hwa.

Fiji's Supreme Court has ruled that excluding the opposition Fiji Labor Party from the government was unconstitutional. Fiji's constitution is designed to promote multiple parties and races.

A bomb exploded at the Indonesian parliament, but there were no casualties. Indonesian police have arrested a group of nine suspected terrorists and confiscated a huge cache of weapons and explosives. One of those detained apparently committed suicide in custody. Additional arrests of suspected militants reflect an increased fear of more regional attacks.

In the province of Aceh, soldiers report killing 15 rebels including Abdur Rahman Adam, a mid-level commander of the Free Aceh Movement (GAM). This brings reported deaths to more than 400 rebel and 31 Indonesian government soldiers. Three of the soldiers operating in Aceh have been jailed for raping four women in June.

Malaysian police have confiscated a number of chemical agents and explosives components that have led to warnings that Jemaah Islamiah may be experimenting with chemical attacks.

North Korean leader Kim Jong-il is profiled "from lazy student through terrorist mastermind to tough-talking nuclear brinksman" in "The Real Dr Evil" a BBC broadcast on July 20. http://news.bbc.co.uk/2/hi/programmes/correspondent/3055490.stm A book written by his former chef has become a bestseller in Japan.

Senior Jemaah Islamiah operative Fathur Rohman al-Ghozi and two Abu Sayyaf militants escaped from Philippines national police headquarters. One guard was asleep and a second shopping, but it is suspected that corrupt police made the escape possible and an inquiry is underway, as well as an international manhunt.

In Bontac, Philippines, New People's Army (NPA) militants ambushed an army patrol, killing eight soldiers and wounding one. A bomb blast attributed to the Moro Islamic Liberation Front (MILF) wounded eight, four critically. MILF and the Philippines government have signed a ceasefire agreement.

The Solomon Islands have reduced their weapons amnesty from 30 to 14 days. An Australian-led peace force will deployed soon, with a mandate that allows them to shoot to kill.

A Vietnamese official was severely injured when his jeep was booby-trapped with an explosive.

---

5. Europe

Two Austrian bomb disposal experts were killed when their attempt to defuse a US bomb dating from World War II failed.

The Corsican National Liberation Front ended its 7-month truce and has now taken responsibility for a bomb at the tax and customs office in Nice, France. There were minor injuries to 16 people whose windows were blown out in their homes. On the island of Corsica, nationalists attacked police with stones, bottles, and fire, demanding the release of Yvan Colonna arrested in connection with the 1998 murder of Claude Erignac. Police used tear gas to disperse the crowd. The Bastille Day parade passed off without incident. Last year, an attempt was made on President Chirac's life.

Nuremberg prosecutor Hartley Shawcross has died, age 101.

In Romania, 24 police were arrested in connection with the organized theft of oil from Black Sea pipelines.

Russian forces in Chechnya have killed Chechen commander Aslan Gasayev and three of his bodyguards. Gusayev was believed connected to recent attacks in Moscow. Continued human rights abuses in Chechnya and Ingushetia have drawn fresh criticism from several human rights groups.

In Spain, the Basque separatist group ETA has issued a bulletin warning of bomb attacks and extortion against foreign businesses in Spain. A bomb planted at Pamplona for the annual bull-running festival was successfully defused and four suspects arrested.

British Prime Minister Blair and the BBC have come under heavy criticism following the suicide of weapons expert Dr David Kelly shortly after his appearance at a parliamentary inquiry into intelligence used to justify the war in Iraq. A moving and detailed account of Dr. Kelly's experience, "A haunted man", appears in The Observer http://observer.guardian.co.uk/focus/story/0,6903,1001786,00.html

In Northern Ireland, about 20 dissident republican prisoners have been involved in a "dirty protest" in prison. A rally in their support was held over the weekend. They are demanding the segregation of republican from loyalist prisoners.

Sean O Muireagain was mistaken for John Morgan, a bomb maker for the Real IRA and arrested by Israeli police, accused of training militant Palestinians in explosives. He has since been released and returned to Northern Ireland. He had visited the West Bank to set up a schools exchange program.

---

6. Middle East

Iran's nuclear program has drawn increasing concern. IAEA investigators may have detected traces of enriched uranium in environmental samples they are investigating. This could be evidence of a clandestine weapons program.

Iranian authorities have postponed the scheduled visit by the UN special rapporteur on freedom of expression. President Mohammed Khatami has ordered in investigation into the death of Canadian reporter Zahra Kazemi (see Americas, above) as well as the broader crackdown against journalists and citizens.

Israeli authorities have arrested eight foreign nationals in the occupied territories, alleging peace activists pose a security risk. A taxi driver was kidnapped in Jerusalem and freed after five days in an Israeli commando operation on the West Bank in which one kidnapper was killed. Al Aqsa Martyrs Brigade took credit for a knife attack in a Tel Aviv restaurant that killed one and injured one. The attacker was arrested.

Lebanese police arrested five people accused of planning attacks against western interests.

On the occupied West Bank, Palestinian militants with the al Aqsa Martyrs' Brigade seized the governor of Jenin and beat him, alleging he collaborated with Israel. Yasser Arafat demanded his release, and he was freed. Prime Minister Mahmoud Abbas held further talks with Ariel Sharon, including discussions of security and prisoner releases, in preparation for forthcoming meetings in the US. For the first time, the US has given $20 million in direct aid to the Palestinian Authority. A Palestinian political scientist was attacked by an angry mob after announcing the results of a poll that indicated the majority of Palestinian refugees would not exercise the right of return to Israel.

---

7. South Asia

Eight Afghan soldiers were killed in an explosion in the southeast that has been blamed on Taleban remnants. General Dostum, a deputy defense minister and prominent warlord, has provided detailed proposals that would lead to the dismantling of the militia groups to help create a national army. UN de-mining operations have resumed. Four people have been arrested in connection with last week's attack on the Pakistan embassy. Canadian troops have taken charge Kabul's security. Peacekeeping in Afghanistan will be under NATO command beginning on August 11.

Afghanistan's ongoing military operations are vividly portrayed in Daniel Bergner's article "Where the Enemy Is Everywhere and Nowhere: In the hunt for Al Qaeda on the Afghan-Pakistani border -- perhaps the most dangerous place in the world -- intelligence is sketchy, the troops don't trust their translators and even apprehending suspects increases the sense of futility" in The New York Times Magazine, July 20.

Afghanistan and Pakistan are sending a joint team to the border to investigate reports of incursions by Pakistani forces. Pakistan and India are preparing to resume full diplomatic relations.

India's Hindu nationalist Bharatiya Janata Party (BJP) have said they are committed to building a Hindu temple at Ayodhya, site of a 16th century mosque that was destroyed in 1992, leading to riots that killed more than 3,000 people.

In Bihar state, a series of bomb blasts derailed four passenger trains, and other bombs were disarmed. There were no casualties. It is suspected local Maoists are responsible.

Indian police in Manipur state shot dead rebel leader Sanjib Singh of the Revolutionary People's Front (RPF). The state Committee on Human Rights has heard eyewitness evidence the killing was an extra-judicial assassination.

In Tripura, separatist rebels of the National Liberation Front of Tripura (NLFT) attacked a village and shot dead five supporters of the ruling communist party. In a second village, they killed two more.

Nepal's government and Maoist rebels have restarted peace talks after a 2-month hiatus.

Pakistani militants continue to launch cross-border attacks into Afghanistan and Indian-administered Kashmir. A bomb exploded outside a hospital maternity ward in Hyderabad, Pakistan. Twelve people were injured, 3 critically. Local criminal gangs are believed to conduct such terrorist attacks to demonstrate their power.

---

8. Cyberterrorism and Information Warfare

A security flaw in Cisco routers, widely used to process Internet traffic, could lead to a new round of malicious attacks that could cause significant disruption. There have not yet been reports of widespread disruptions, but because these routers are so widely used, correcting the flaw has been treated as an emergency, and internet service providers have hurried to patch the software.

Microsoft has issued three more security patches, addressing security flaws, including one in the secure version of the operating system.

The proposed Terrorism Information Awareness (previously named Total Information Awareness) has had its funding cut by the US Senate.

---

9. Finance

A cigarette smuggling ring operating in Ireland and Holland was uncovered. It was uncovered in connection with investigations of Real IRA activities.

Nabih Haddad, leader of a Muslim charity in the US, has been deported in connection with charges that his Global Relief Fund was connected to al Qaeda.

The International Monetary Fund's latest assessment on Morocco finds the country has not yet criminalized money laundering or terrorist financing. Measures are being considered and need to be implemented throughout the entire financial system, and allocated sufficient resources.

Angola's council of ministers has passed regulations to begin compliance with the Kimberley Process to combat blood diamonds.

The International Criminal Court investigating alleged crimes in DR Congo found that money laundering and illegal exploitation of natural resources may be connected with the atrocities.

Jay Solomon and Hae Won Choi report that "In North Korea, Secret Cash Hoard Props Up Regime: Defectors, Intelligence Sources Say Division 39 Supplies Billions to Kim Jong Il: Ginseng and Counterfeit Bills" in The Wall Street Journal, July 14.

Bassem Youssef, a US FBI agent, has filed a racial discrimination suit against the FBI for sidelining him from investigation into the September 11 attacks, despite his extensive experience.

---

10. Human Rights

The International Criminal Court (ICC) (http://www.icc-cpi.int) reports that "Since July 2002, the Office of the Prosecutor has received 499 communications from 66 different countries." Not all of these are within ICC jurisdiction, but allegations of crimes committed in Ituri, Democratic Republic of Congo (DRC) getting immediate attention. It is considered the most urgent situation, involving multiple allegations of 5,000 civilian deaths in six months and allegations of ethnic massacres, summary executions, torture, disappearances, sexual violence, use of child soldiers, and ritual cannibalism. It is also important that ICC be involved since DRC is unable to intervene.

Botswana has reached a bilateral agreement with the US to exempt US citizens from the International Criminal Court.

Zambia has reached a bilateral agreement with the US to exempt US citizens from the International Criminal Court.

Amnesty International (http://www.amnesty.org) has condemned the US for executing people for crimes committed as children. Only Barbados, DR Congo, Iran, Nigeria, Pakistan and Yemen have executed children. Of 20 worldwide child executions, 13 took place in the US.

There has been a 15 percent increase in US Muslim complaints of discrimination, harassment and violence.

---

11. Law and Legal Issues

Florentino Cerron Cardoze (a/k/a "Marcelo", "Carlos", "Julio", "Raul"), head of the rebel Shining Path's Central Regional Committee, has been arrested in Peru in connection with 122 murders and more than 180 attacks.

Khaled Abdel-Latif Dumeisi, a newspaper editor, has been arrested in Chicago on charges of providing false credentials and other support to Iraqi intelligence operations in the US.

Riduan Isamuddin . "Hambali", has been arrested in the Philippines with seven other suspected members of Jemaah Islamiah (JI) in connection with bombings in Manila in 2000. Hambali is suspected of linking JI with al Qaeda.

Ali S Marri was arrested in January 2002 and was designated an enemy combatant on June 23. His attorneys have submitted a writ of habeas corpus and will appeal the designation. He had been awaiting trial on charges of credit card fraud.

Naveed Anwar Mohamed has been freed from detention in Kenya after having been accused of links with a militant Islamic group.

Defense lawyers for Zacarias Moussaoui ("20th hijacker") moved that the appeals court should not intervene in Moussaoui's right to question al Qaeda member Ramzi Binalshibh in his defense, opening the possibility of penalties against the government if the witness is not produced.

Jose Rainha Junior, a leader of Brazil's Landless Workers' Movement (MST) was arrested for a ranch occupation in 2000 that resulted in property damage and cattle theft.

David White has been charged in Belfast court with membership of the Real IRA, conspiracy to cause an explosion, making a bomb, and possessing explosives.

Saifullah Mukhlis Yunos has pleaded guilty to involvement in the bomb attacks in Manila, Philippines, in December 2000.

---

12. Narco-terrorism

---

13. Transportation

The Customs and Border Protection Bureau of the US Department of Homeland Security (DHS) has deployed Chemical Detector Dogs to borders and ports to help detect potential chemical weapons smuggling. DHS is also testing a web portal to track cargo shipments.

The US Transportation Security Administration has issued a new Shoe Screening Policy meant to standardize screening across airports.

Australian airlines are updating their list of prohibited items on flights. The new list is likely to include a ban on metal knives and forks. The review was undertaken after a deranged passenger attacked another passenger with a fork.

---

14. Weapons of Mass Destruction

The International Atomic Energy Agency has issued a position paper of on the safety and sustainability of long-term storage of radioactive waste. Terrorist threats have greatly increased the risk of near-surface storage that is commonly used today.
http://www-pub.iaea.org/MTCD/publications/PDF/LTS-RW_web.pdf

An independent study published by the American Physical Society finds that "Intercepting missiles while their rockets are still burning would not be an effective approach for defending the U.S. against attacks by an important type of enemy missile". This research adds yet more questions to the feasibility of the US administration's plans for a missile defense system. http://www.aps.org/public_affairs/popa/reports/nmd03.html

Three proteins produced by anthrax create a chemical that disables the immune system. The discovery can be applied to better anthrax treatment and will aid other immunology research. Agrawal, A. et al. "Impairment of dendritic cells and adaptive immunity by anthrax lethal toxin" in Nature 424, 329-334 (2003) Letters to Nature.

Researchers at the International Center for Medical Research in Gabon are using satellite data from the European Space Agency to track down potential natural reservoirs of the Ebola virus. http://www.esa.int/export/esaSA/SEMF1MXO4HD_earth_0.html

US Bureau of Alcohol, Tobacco, Firearms and Explosives agents are investigating the theft of 1,200 pounds of ammonium nitrate. The bomb-making component was stolen from a California company.

David S. Cloud reports "Iraqi Scientists Recount Effort To Make Weapon Out of Ricin: Program, One of Threats U.S. Cited, Was Dropped in '91, Baghdad Pharmacists Day" in The Wall Street Journal, July 18

---

15. Recently Published

Hugh Bicheno, "Crescent and Cross: The Battle of Lepanto 1571" Cassell

Ian Buruma "Inventing Japan 1853-1964" Modern Library

Jean Pierre Chretien, transl Scott Straus, "The Great Lakes of Africa: Ten Thousand Years of History" Zone, distrib MIT Press

John Fullerton "A Hostile Place" Macmillan (fiction, set in Afghanistan)

Aidan Hartley, "The Zanzibar Chest: A Story of Life, Love, and Death in Foreign Lands" Atlantic Monthly

Wendy Pearlman, "Occupied Voices" Stories of Loss and Longing from the Second Intifada" Thunder's Mouth/Nation

Janet Todd, "Rebel Daughters: Ireland in Conflict 1798" Viking

Loukas Tsoukalis "What Kind of Europe?" Oxford University Press

---

FEATURE ARTICLE: Financing Terrorism with Counterfeit Goods

Interpol's Secretary General, Ronald Noble, testified this week before the US House Committee on International Relations on the links between intellectual property crime (IPC) and terrorist financing. The links between organized crime and terrorist financing are long-standing, but this new black market trade is estimated at reaching $450 billion, which is as much as 7 percent of the total trade.

This source of funding has become the preferred method for several terrorist groups. Examples are detailed in his testimony as follows:

The specific examples provided in his testimony are particularly interesting and are reproduced herewith.

"Northern Ireland
"In Northern Ireland the counterfeit products market is estimated to cost the economy in excess of US $167 million. In 2002, the police seized in excess of US$ 11 million in counterfeit products. It is known that paramilitary groups are involved in IPC, including counterfeit cigarette trafficking. It is unknown how much of the money generated by these counterfeiting operations goes to terrorist groups and how much is retained as criminal profit.

"Paramilitary involvement in IPC in Northern Ireland is through their control of the markets where many counterfeit goods are sold. Other aspects of the IPC in Northern Ireland appear to have no terrorist involvement i.e. the importation and sale of counterfeit clothing is dominated by individuals in the South Asian community in Northern Ireland.

"Kosovo
"An example similar to the situation in Northern Ireland is in the United Nations-administrated province of Kosovo. A significant proportion of consumer goods, (CDs, DVDs, clothes, shoes, cigarettes and computer software) available for sale, are counterfeit. The sale of counterfeit goods occurs openly and there is limited enforcement against counterfeit products due to significant legal loopholes. In Kosovo, there is a long-standing relationship between criminal organizations and local ethnic-Albanian extremist groups. This relationship is based on family or social ties. It is suspected that funds generated from IPC benefit both criminal organizations and extremist groups.

"Chechen separatists
"Interpol is aware of a case in 2000 in Russia, where Chechen organized crime groups and terrorist organizations were benefiting from counterfeit good manufacturing and trafficking. Specifically, in 2000, a joint operation between Russian law-enforcement agencies and private industry resulted in the break-up of a CD manufacturing plant. According to the police officials involved, this counterfeit CD plant was a source of financing for Chechen separatists. The CD plant was run by Chechen organized crime which then remitted funds to Chechen rebels. The FSB (Russian Federal Security Service) estimated that the average monthly earnings of the criminal organization are estimated to have been US $500,000 - 700,000. A number of explosives and arms were also confiscated by the police during raids on the residences of the suspects.

"North African radical fundamentalists terrorists in Europe
"Interpol possesses information that indicates the following in relation to IPC and terrorist financing in Europe to radical fundamentalist networks. Sympathizers and militants of these groups may engage in a range of criminal activity including IPC. Sympathizers will indirectly pass a portion of the funds generated from their illicit activity to radical fundamentalist networks. The sympathizer passes money in the form of charitable giving or zakat (charitable giving based on a religious obligation in Islam) via Mosques, Imams or non-profit organizations that are sympathetic to radical fundamentalist causes. This money is eventually moved to the radical fundamentalist terrorist group. The transactions are predominantly cash-based leaving no paper trail or way of verifying the origin or final destination of the funds. In terms of radical fundamentalist militants, these persons may for long periods of time not be directly involved in terrorist activity. During these periods, while not on active service duty, they support themselves through criminal activity like IPC or credit card fraud. A portion of the money earned in these activities is kept while a portion is remitted to radical fundamentalist terrorist groups in cash form, in ways similar to the methods used by sympathizers.

"A militant active in Europe, known for his activities in radical fundamentalist organizations over the last decade has been recently convicted for trafficking in counterfeit goods. The individual's counterfeiting associates are also known members of radical fundamentalist groups. They are reported as still being involved in large-scale counterfeit goods trafficking. This individual fits the profile outlined above of militants being involved in criminal activity to support themselves while not on active service duty. Funds are remitted to the group with which they are aligned.

"Al-Qaeda
"In general al-Qaeda and affiliated groups benefit from funds raised by sympathizers. This may include funds originating in either licit or illicit activities. One estimate is that over a ten year period al-Qaeda received between $300 million and $500 million, averaging US $30 to US $50 million a year (4). According to the same source approximately 10% of spending went on operations while 90% was used to maintain the infrastructure of the network, including payments to other groups to support them or to increase al-Qaeda's influence in these regions. A further use of these funds was the payment of money to guarantee the protection of the group in Afghanistan or Sudan.

"One counterfeiting case has been reported in the media where there are alleged connections to al-Qaeda. The investigation into a shipment of fake goods from Dubai to Copenhagen, Denmark, suggests that al-Qaeda may have indirectly obtained financing through counterfeit goods. Danish customs intercepted a container, containing counterfeit shampoos, creams, cologne and perfume. The sender of the counterfeit goods is allegedly a member of al-Qaeda. A transnational investigation involved agencies from three countries; Denmark, the United Kingdom and the United States (5). It is difficult to know whether the funds from this traffic went directly to al-Qaeda or whether only a part of them were remitted. In general, it is possible that funds generated through IPC are remitted to al-Qaeda indirectly through zakat-based (a religious duty to give money) giving. Although given the cash-based nature of this giving it is difficult to establish the provenance of the funds.

"Hizbullah
"Interpol is aware of three cases of IPC-related activity and terrorist funding in South America. These cases involve ethnic-Lebanese who are involved in the remittance of funds to Hizbullah. As in the case of European radical fundamentalist groups funds are thought to be indirectly remitted via organisations associated with Hizbullah. Interpol's information suggests that these persons are involved in the distribution and sale of counterfeit goods, not in the manufacturing or fabrication of counterfeit goods. It is suspected that most counterfeit manufacturing and fabrication is dominated by organized crime. Three examples illustrate this:

"Funds generated from IPC may be remitted to Hizbullah using the following modus operandi. Counterfeit goods produced in Europe are sent to a free-trade zone in South America by a group of Lebanese criminals sympathetic to Hizbullah. The goods are then smuggled into a third country, to avoid import duties, where they are sold via a network of sympathizers and militants originating in the Middle East. An unknown amount of the money generated through this activity is suspected to be remitted to Hizbullah.

"In February 2000, an individual was arrested for piracy and suspected fundraising for Hizbullah. The individual sold pirated music CDs, Sega, Sony and Nintendo game discs to fund a Hizbullah-related organization. Among the discs recovered were discs containing images and short films of terrorist attacks and interviews with suicide bombers. The discs were allegedly used as propaganda to generate funds for Hizbullah. Interpol is in possession of some of these films. This individual is currently a fugitive.

"Another individual was arrested for his alleged ties with the Hizbullah in Foz do Iguazu in June 2002 after evading arrest in October 2001. The individual is wanted for tax evasion and the collection and remittance of funds to extremist organizations. Interpol files do not mention involvement in IPC. The alleged IPC connection is stated in open sources. Law enforcement sources indicate that numerous letters from organizations, suspected of being associated with Hizbullah in Lebanon, were found thanking the individual for financial contributions."

The testimony points out the low risk and high return of these activities and believes its role in terrorist financing will increase. To combat this, Interpol recommends establishing best practices for investigation and enhanced enforcement initially with a 3-year program.

Such efforts will increase awareness of this growing problem, but terrorist financing is an inherently difficult to interdict, particularly in cases such as these where it is so difficult to untangle legitimate from illegal activities.

Additional resources:

Full testimony http://www.interpol.int/Public/ICPO/speeches/SG20030716.asp

Background:

---

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.