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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. Transportation
13. Weapons of Mass Destruction
14. Recently Published

FEATURE ARTICLE:
From Pigs And Grain To Sheep: Terror Financing Deja Vu

NEWS HIGHLIGHTS OF THE WEEK

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1. World

Reports from China and North Korea say that North Korea is prepared to enter into a new round of talks regarding its nuclear programs next year. Dates and agreement among the six negotiating powers have yet to be decided.

As predicted, Iraq has suffered an upsurge in insurgent attacks, including suicide bombings, targeting the occupation, civilians, western interests, and infrastructure. Some international assistance is beginning to come through on debt relief.

Christian religious leaders around the world, from the Pope to the Archbishop of Canterbury, used the Christmas holiday to call for peace and end to conflict.

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2. Africa

A UN peacekeeping force was approved for Burundi.

The Comoros islands have reached an accord regulating the central government and three semi-autonomous islands. The agreement covers trade, governance, and security and provides for international observers.

In Ethiopia, 56 people have been arrested in connection with ethnic violence last week that left at least 30 dead.

Guinean President Lansana Conte won a third term with a landslide victory. Conte first seized power in a 1984 coup and forced through constitutional changes to allow him to stand for another term. The opposition boycotted the election and there have been accusations of electoral abuse and financial impropriety.

Ivory Coast rebels occupying the north agreed to return to the government of national unity.

Rebels of the Liberians United for Reconciliation and Democracy (LURD) prevented UN peacekeeping forces from entering their territory until disarmament details are completed. The smaller MODEL rebel group allowed peacekeepers to deploy. The UN has warned LURD of political and economic consequences of UN forces are again blocked.

Libya is beginning the new International Atomic Energy Agency (IAEA) inspection regime. IAEA head, Mohammed ElBaradei, leads the initial assessment.

South Africa has begun reparation payments to apartheid victims identified by the Truth and Reconciliation Commission.

Sudan's peace talks have resumed.

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3. Americas

Colombian rebels of the National Liberation Army (ELN) freed five foreign hostages who had been held in the jungle for 101 days. A bus explosion attributed to rebels of the Revolutionary Armed Forces of Colombia (FARC) killed four and injured more than 30.

Border clashes between Colombian right-wing paramilitaries and Venezuelan soldiers have killed two soldiers and increased tensions between the two countries. Details of the encounter are still unclear.

Cuba has joined criticism of the use of Guantanamo Bay by the US for unlimited detentions.

In Haiti, anti-government protests were met by government supporters who began shooting, killing one bystander, before riot police intervened.

The deadline for victims of the September 11 attacks to claim compensation expired on December 22. Businesses who received aid following the attacks have returned $1.2 million that had been overpaid.

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4. Asia Pacific

Australia's detention policy, using an offshore camp in Nauru, is under review by the UN. The UN is reviewing 22 asylum requests and has asked Australia to attend to about 180 others held in the camp, including forty who are on hunger strike. The review is based on evaluating security conditions at their country of origin, Afghanistan.

Chinese authorities report that a terrorist at the top of its wanted list, Hasan Mahsum associated with the East Turkistan Islamic Movement, was shot dead in Pakistan, where he had allegedly been operating near the Afghan border.

Indonesia has been on high security alert around the Christmas holiday, remembering a series of Christian church bombings in 2000 that killed 19.

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5. Europe

European Commission President Romano Prodi survived a parcel bomb attack without injury. This is the third explosion in Prodi's vicinity in the past week, claimed by an anarchist group.

Georgia has denied Russian accusations that it provides a transit network for foreign militants. The Russian accusations followed the discovery that five of the fighters killed when Russian forces raided a Chechen rebel base were foreign militants. The three Turks, German and Algerian had Georgian visas.

Russia and Ukraine have agreed a framework on the mutual use of the Azov Sea.

More than 20 suspects in the assassination of former Serbian Prime Minister Zoran Djindjic have begun their trial, an event that is already seeing courtroom chaos.

Serbians go to the polls in a general election that is expected to put in power ultra-nationalists including people currently on trial or wanted for war crimes. http://www.guardian.co.uk/serbia/article/0,2479,1112797,00.html

Spanish police have uncovered two powerful bombs intended for use against a train, and arrested two men, in connection with the suspected Basque separatist plot.

Turkish authorities claim that the detention of some 160 people, 35 charged with the Istanbul bombings last month, and recovery of explosives and weapons, have eliminated the al Qaeda cell responsible for the attacks. However, several suspects have fled abroad.

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6. Middle East

Egyptian Foreign Minister Ahmed Maher was assaulted by Muslim worshippers at the Al Aqsa Mosque in Jerusalem for holding talks with Israeli prime minister Sharon and his suggestion for a ceasefire. Egypt and Israel restated their commitment to the roadmap peace plan.

In the occupied Gaza Strip, an Israeli helicopter strike targeted and killed Makled Hamid, head of Islamic Jihad's military wing in Gaza. Two other militants and two civilians, one 16-years-old, were also killed and 15 civilians injured. Israeli Defense Forces operations in Rafah killed at least eight civilians.

On Christmas day a suicide bombing near Tel Aviv killed four Israelis and injured 20. It was the first in more than two months and resulted in the total closure of both Gaza and the West Bank and a promise of retaliation. The Popular Front for the Liberation of Palestine (PFLP) claimed responsibility and said it was the first in a series.

The UN Israel/Syria disengagement force has had its mandate extended through next June. It has been monitoring the ceasefire first established in 1974.

In the occupied West Bank, Israeli Defense Forces launched operations in Nablus, killing four alleged militants and three children. Some 70 people were detained.

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7. South Asia

Afghanistan's loya jirga (grand assembly) are winding up the crucial debate on the future constitution. It appears that President Karzai's proposal for a strong presidential system will carry the day. There is concern that agreement has been reached by too many promises to notorious warlords who still control large parts of the country.

A huge car bomb near the Kabul, Afghanistan airport killed six, including five security personnel. It is reported that a suicide bomber detonated the device as police attempted to arrest him.

Bhutan has continued its offensive against Indian rebel bases in the country. Bhimkanta Buragohain, founder of the United Liberation Front of Assam (ULFA), was reported killed last week but he has now surrendered to the Bhutanese Army, then handed over to India.

In Indian-administered Kashmir, eight militants and two security force personnel were killed in two separate gun battles.

Pakistan President Musharraf narrowly escaped assassination for the second time in 11 days, when two huge bombs went off just minutes after his motorcade had passed. Two suicide bombers were killed and at least 15 people died in the attack.

President Musharraf has agreed to step down as military head and give up some other powers assumed after his bloodless 1999 coup. The agreement is in cooperation with the Muttahida Majlis-e-Amal hardline Islamic coalition that has been disrupting parliament.

Pakistan is investigating the possible sale of nuclear technology, particularly to Iran and North Korea, amid accusations that some of its most prominent scientists may have sold its secrets.

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8. Cyberterrorism and Information Warfare

Microsoft Internet Explorer does not correctly display URLs containing certain non-printable characters, opening the possibility of misleading a user into visiting a fraudulent web site. This could make phisher schemes even more difficult to detect. http://www.kb.cert.org/vuls/id/652278

The UK Data Protection Act is under review after finding that interpretations of the legislation had led to the destruction of information regarding convicted child murder Ian Huntley and for the deaths of an elderly couple whose heating was cut off and officials were afraid to breech the Act if they informed social services.

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9. Finance

The US and Saudi Arabia have asked the UN to list Bosnian non-governmental organization Vazir as an aka for Al Haramain-Bosnia and to add Safet Durguti to the list of persons and entities sanctioned for ties to al-Qaida

The US Treasury has designated Hochburg AG as an aka for BA Taqwa because Youssef Nada, a Specially Designated Global Terrorist, had a controlling interest in BA Taqwa and an ongoing interest in the liquidation of Hochburg.

Thirty years ago the first case of "body packing" to conceal drugs was treated in Toronto. The December 25 issue of The New England Journal of Medicine provides a fascinating Current Concepts article on this topic. http://content.nejm.org/cgi/content/short/349/26/2519

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10. Human Rights

The International Court of Justice has completed hearings in the case Mexico brought against the US over the rights of death row prisoners and will now start deliberations. http://www.icj-cij.org/icjwww/ipresscom/ipress2003/ipresscom2003-45_mus_20031223.htm

2004 has been proclaimed the International Year to Commemorate the Struggle against Slavery and its Abolition and will include celebrations of the bicentenary of the Haitian Revolution and establishment of the first black republic in the Western Hemisphere. http://portal.unesco.org/culture/en/ev.php@URL_ID=13974&URL_DO=DO_TOPIC&URL_SECTION=201.html

Claims to several Holocaust compensation funds must be submitted by December 31. http://www.ajr.org.uk/claims.htm

The capture of Saddam Hussein has generated a wide-ranging debate on how he should be held to account, including discussions of capital punishment, torture and war crimes tribunals. One of the most interesting articles was by Jeffrey Rosen, "Pursuing Justice: Perils of the Past" in The New York Times, December 21 http://www.nytimes.com/2003/12/21/weekinreview/21rose.html

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11. Law and Legal Issues

Tantely Andrianarivo, the former prime minister of Madagascar, was sentenced to 12 years hard labor and a $7 million fine for abuse of power. He had supported former President Ratsiraka (sentenced to 10 years hard labor in absentia) in his power struggle over 2001 election results. The sentence will be appealed. Amnesty International has expressed concern over trial irregularities and his prison conditions.

Two Australian prisoners, Bandali Debs and Jason Roberts, jailed in a maximum security prison for killing police, have been isolated after attempting to build an explosive device using chemicals from medical supplies.

Arman, a/k/a Galazo bin Abdul Somad, was sentenced in Indonesia to 18 years in prison for transporting and hiding a bomb used in a McDonald's restaurant.

Qassam Barghouti, son of jailed Palestinian leader Marwan Barghouti, has been detained by Israeli authorities.

Michael Dickson has been sentenced in Germany to 6.5 years prison for attempted murder connected with an IRA mortar attack against a British base in Germany.

Bilal and Maher Khazal were sentenced in absentia to ten years prison by Lebanese court on terrorist charges related to financing a bombing campaign. The two brothers are Australian but Lebanon has not applied for extradition.

Miguel and Gilberto Rodriguez Orejula, leaders of the notorious Cali drug cartel, have operated from prison since 1995. The US has now filed extradition requests.

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12. Transportation

A heightened terror alert during the holidays in the US focused on transportation risks, particularly cargo shipments. Six flights between France and Los Angeles were halted based on "credible threats" that are being investigated, but have been resumed.

The Australian government and Qantas national airline have agreed to share the costs of armed guards on many flights, particularly between Australia and Singapore. Following this agreement, guards shortly will be deployed.

Amid the heightened alert, the UK is also deploying armed undercover air marshals on some flights.

The US Customs Service has begun accepting C-TPAT applications from other supply chain participants, including brokers, forwarders, and non-vessel-operating common carriers.

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13. Weapons of Mass Destruction

A missing screw at a Spanish reactor has closed operations until further notice. http://news.bbc.co.uk/2/hi/europe/3343493.stm

International Atomic Energy Agency (IAEA) head, Mohammed ElBaradei and his team have arrived in Libya and begun the initial assessment to start dismantling Libya's nuclear program.

The US-Russia-IAEA Tripartate Initiative has assisted Bulgaria with removal of highly enriched uranium stored at a shutdown research reactor in Sofia. http://www.iaea.org/NewsCenter/News/2003/bulgaria20031218.html

Hongbin Liu et al have identified how anthrax spores reproduce and spread. See "Formation and Composition of the Bacillus anthracis Endospore" in the Journal of Bacteriology, January 2004 http://jb.asm.org/cgi/content/abstract/186/1/164

Following a US federal court ruling that military personnel cannot be forced to take anthrax vaccine, the Department of Defense has stopped the vaccine program. http://www.anthrax.osd.mil/

Dena Bravata et al have described "Evaluating Detection and Diagnostic Decision Support Systems for Bioterrorism Response" in the January 2004 issue of Emerging Infectious Diseases. http://www.cdc.gov/ncidod/EID/vol10no1/03-0243.htm. Prepublication of a special issue on SARS is available at http://www.cdc.gov/ncidod/EID/upcoming.htm

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14. Recently Published

Susan Braudy, "Family Circle: The Boudins and the Aristocracy of the Left" Knopf http://www.randomhouse.com/catalog/display.pperl/0-679-43294-9.html
Carol Brightman review at http://www.thenation.com/doc.mhtml?i=20040105&s=brightman

Leonard Cole "The Anthrax Letters: A Medical Detective Story" Joseph Henry http://www.nap.edu/catalog/10724.html Author interview at http://www.cnn.com/TRANSCRIPTS/0309/28/sm.03.html

Sheri Fink, "War Hospital: A True Story of Surgery and Survival" Public Affairs (Srebrenica, Bosnia) http://www.worldpress.org/library/books/book_page.cfm/hurl/bookId=50

Antonio Munoz Molina, transl Margaret Sayers Peden, "Sepharad" Harcourt (novel) http://www.harcourtbooks.com/bookcatalogs/bookpages/0151009015.asp Michael Pye review at
http://www.nytimes.com/2003/12/21/books/review/21PYELT.html

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FEATURE ARTICLE: From Pigs And Grain To Sheep: Terror Financing Deja Vu

In his book, "The Financing of Terror" (Simon and Schuster, 1986) James Adams describes "The IRA Mafia" and the use of criminal proceeds to fund terrorist activities. One of the examples is Thomas "Slab" Murphy's border farm, based exactly on the border between Ireland and Northern Ireland, "that has become one of the symbols of the British army's impotence, as well as being the IRA's most lucrative source of regular income". Adams estimates this contributed up to $3 million per year to the IRA.

Here's how Adams describes the operation:
"For many years, Slab has operated a fairly sophisticated smuggling operation that takes advantage of subsidies offered by the European Economic community. For example, the Common Market at one time paid farmers in southern Ireland a subsidy of GBP8 ($12) per animal exported to the United Kingdom, of which Northern Ireland is a part. To operate the swindle, Slab ferried pigs into Ulster from the south and filed subsidy claims at a British Customs post at Newry, County Down, in the north. The pigs were then smuggled back to avoid tax penalties that were levied on livestock taken from the north to the south, and the business was repeated again and again.

"Slab's barn serves as a particularly useful tool for the movement of farm stock and other produce subject to different subsidies between north and south. In order to prosecute for this, Customs must prove that the same load is going back and forth, but because the barn actually straddles the border, Slab can always argue in court that the load had been changed in the barn. To date, this argument has prevented the British from taking any action, and they are further hampered by the inaction of the police in the south who, the British believe, are themselves heavily 'subsidized' by the proceeds from Slab's smuggling operations." [Adams, p 157-8]

When the pig subsidy was abolished, the operation switched to grain. Toby Harnden, in "Bandit Country", (Hodder and Stoughton, 1999) quotes a Royal Ulster constabulary sergeant:
"Smuggling has always been rife down there. In the 1970s, there was a guy in Dundalk who was hiring pigs out to people who would drive them across the border and back again. It got to the stage where the pigs were collapsing with fatigue they'd been on the road for so long. When the subsidies shifted to grain, there was a smuggler with a lorry full of sand with a thin layer of grain on top of it. The joke was that he nearly got caught on because the grain had been so long on top of the sand that it started to sprout." [Harnden p 35]

Then there were cattle. Common Market auditors "privately admitted that the cattle in the area were being sent back and forth across the borders so regularly that 'they knew the way by themselves'". [Adams p 158]

Now, almost a generation after pig subsidy fraud first enriched the IRA coffers, is the Sheep Annual Premium Scheme. It has not been linked to terrorist financing, but the recent investigation provides interesting insight into how such operations can persist for so long.

The UK House of Commons Committee of Public Accounts explains the opportunity as follows: "Sheep farming is a major component of Northern Ireland's rural economy. Between 1995 and 2002, GBP 170 million was paid under the Sheep Annual Premium Scheme in Northern Ireland. The Scheme is a European Union support mechanism for sheep producers who receive a 'headage' payment for eligible sheep. The number of sheep for which farmers can claim is limited by seep 'quota' and farmers are required to keep eligible animals on notified land for a period of 100 days after the claim application deadline."

The racket was uncovered in the wake of the foot-and-mouth cull and has now been described in critical detail by this Committee. They found a staggering degree of fraud, "particularly in one of the affected areas where at least 58 percent of claimants had been attempting to cheat the system". This figure was encouraged by the Department of Agriculture that "has in the past been soft on fraud", with "slackness in control" and a "poor record of prosecution". Furthermore, "there is evidence that Departmental staff were "at times complicit in turning a blind eye to the rules". In fact, "we are not convinced that collusion between farmers and Departmental staff has not been an issue".

This culpable lack of enforcement led to high financial losses. The Department of Agriculture estimated fraud at half a million annually, but the Committee "saw plenty evidence of irregularities, including shortfalls of sheep, that went unreported.... [T]he actual fraud figure is likely to be substantially higher...."

The "catalogue of errors and control failures, all of which pointed towards a particularly slack regime" included payments for sheep that had died; payment for sheep at unnotified locations; nonexistent flock records; poor flock markings; bogus land declarations; conflicts of interest; lack of payment controls; and lack of penalties.

The Committee found that lack of resources was not the problem. Instead, they addressed cases such as "a farmer who had claimed premium for 71 sheep but was found not to have any". This farmer was a Department employee. In fact, 231 of the 3,762 staff claim agricultural subsidies.

To counter the sheep subsidy fraud, the Committee proposed five specific measures:

1. Increase the effectiveness of farm inspections
This involves improving quality, identifying sheep losses, applying the EU rule that eligible sheep must be at notified locations, and securing farmer cooperation with sanctions if necessary

2. Raise the standard of flock records and markings
Improve flock records to give a high level of assurance they are accurate; improve flock markings; and introduce individual sheep tagging

3. Improve payment controls
Detect irregularities and replace hand-drawn 'Field Management System' maps with a Geographical Information System (GIS) for digital mapping

4. Apply penalties for irregularities
Increase rates of penalties and introduce penalties for poor record keeping and flock markings

5. Combat fraud
Improve case handling, address conflicts of interest, address risk of collusion, improve risk analysis, estimate the total fraud level, and improve methodologies to reduce discrepancies

As with the earlier frauds, the Sheep Scheme provided high revenue and low risk. One interesting contrast is the application of new technologies (databases, GIS) to support both subsidies and fraud management. The introduction of individual sheep tagging will not only monitor animal movements for fraud prevention but, more importantly, make it easier to track diseases such as foot-and-mouth that first uncovered this fraud and other outbreaks, including Bovine Spongiform Encephalopathy (BSE, Mad Cow).

Furthermore, following the committee recommendations will help to increase overall transparency. In turn, taxpayers will be satisfied and honest farmers will not be competing with the dishonest.

Good governance would call for these measures even had no fraud taken place.

Further Reading:

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