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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:
Terrorist Financing and Charitable Organizations: The Case of the Holy Land Foundation

NEWS HIGHLIGHTS OF THE WEEK

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1. World

Volatility on the Korean peninsula is increasing with a combination of internal and external pressures. The US is withdrawing a third of its troops from South Korea and moving the rest away from the demilitarized zone that divides north from south, leaving it in the hands of South Korean forces alone. North Korea has written to the UN requesting the 50-year-old UN command be dissolved and warns of an almost inevitable war given hostile US policy. There has been an upsurge in the number of refugees making their way in stages through China, Vietnam, or another third country travelling 4,000 miles to reach the south. As 450 arrived in just two days, representing the largest influx, North Korea accused the South of kidnapping. With so many increasing tensions, resolution of the nuclear situation is ever more urgent.

The World Trade Organization's five key agriculture members (Australia, Brazil, EU, India and US) reached an agreement outlining the basis for negotiating agricultural liberalization in the Doha global trade meetings in a big step towards overcome the biggest obstacle on a general free trade agreement. Delegates missed the Friday deadline for the general agreement worked around the clock to complete a framework and other agreements to support the Doha negotiations. The World Bank says that a successful agreement could add $520 billion to the global economy by 2015, most to poorer countries.
Summary of the meeting:
http://www.wto.org/english/news_e/news04_e/dda_package_sum_31july04_e.htm
July 31 draft text:
http://www.wto.org/english/tratop_e/dda_e/draft_text_gc_dg_31july04_e.htm
More news on the July 2004 package page:
http://www.wto.org/english/tratop_e/dda_e/dda_package_july04_e.htm

The Independent Evaluation Office (IEO) of the International Monetary Fund (IMF) used an inquiry into Argentina's financial crisis as a way to demand clear stop-loss rules in dealing with future crises. http://www.imf.org/External/NP/ieo/2004/tr/eng/tr072904.htm

Medecins Sans Frontieres (Doctors Without Borders) http://www.msf.org/ is a relief organization known for providing aid in the most insecure and volatile areas of the world. It announced this week that it is leaving Afghanistan, where it had been in place since 1980, through the Soviet occupation, civil war and Taliban, in response to the murder of five MSF workers. They cite the politicization of aid as the reason for increased attacks against humanitarian organizations. Other organizations, from the UN and Red Cross to local agencies, have also been under threat as the US military performs reconstruction efforts normally handled by civilians, blurring the line between the two. The UN's Inter-Agency Standing Committee has issued " Civil-Military Relationship in Complex Emergencies - An IASC Reference Paper" that provides guidelines for military participation, including recommending that humanitarian work be carried out by humanitarian agencies. http://www.reliefweb.int/w/lib.nsf/WebPubDocs/63447615867CFDE2C1256EC400330F6D?OpenDocument

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2. Africa

Burundi's efforts to reach a comprehensive peace agreement are deadlocked over the power-sharing proposal that the national assembly and government be made up of 60 percent Hutu and 40 percent Tutsi. Six of the main pro-Tutsi parties have walked out of the talks. The main rebel Hutu group, Forces for the Defense of Democracy (FDD) said the posts promised it under last year's ceasefire had been delivered and they will rejoin the power-sharing government.

Equatorial Guinea and South Africa reached agreements to ensure a free and fair trial for the eight South Africans alleged to be mercenaries attempting a coup in EG. The alleged coup leader, Simon Mann, is a British national, former SAS officer and graduate of Eton. http://news.bbc.co.uk/2/low/uk_news/3916465.stm He faces the death penalty if convicted. Most of the alleged mercenaries -- 70 men -- are on trial in Zimbabwe, where they were intercepted when stopping to pick up weapons en route to EG. 67 men pleaded guilty to violating immigration, aviation, firearms and security laws, for which they were convicted. They may be extradited to EG or deported to South Africa or elsewhere after this trial. All 70 carried South African passports but were from a number of different countries. Investigations are underway to uncover criminal syndicates providing false documents, and possibly linked to international terrorist organizations. Similar passports have been found in Europe and South Asia. South Africa's department of Home Affairs has also instituted a campaign for women to check their marital status after uncovering a scheme that allowed foreign men to obtain citizenship by using stolen identity cards, then divorcing the women before they knew it had occurred.

Ivory Coast rebels and opposition groups have reached agreement to rejoin the government. The rebels must start disarming by October and there is a timetable for settling key issues around citizenship, the presidency, and so on.

Nigeria's western state of Kwara will provide financial aid to a group of white Zimbabwean farmers whose land was taken away by the government and redistributed. http://www.theindependent.co.zw/news/2004/April/Friday2/2459.html

Madagascar is investigating a spate of grenade attacks against government targets. There have been no injuries, but it raises concern over who could be trying to destabilize the government.

Morocco warned Spain that some 600 of its citizens had trained in al Qaeda camps and that the whereabouts of about of them are unknown.

Sudan has rejected a UN Security Council resolution that demanded the government stop atrocities in Darfur within 30 days. More than a million people have been displaced and are at risk from disease and starvation and more than 50,000 have been killed, largely by government-backed Arab militias that target black Africans. The latest atrocity, described by African Union observers, is chaining together women and children and burning them alive. The African Union and Arab countries have joined the UN and US to end the violence, but prefer that the problem be solved locally. The government has taken delivery of additional Russian MiG fighter jets. A group calling itself "Mohamed's Army" has called for Muslims to fight against any Western forces sent into Darfur. http://www.un.org/apps/news/story.asp?NewsID=11507&Cr=sudan&Cr1=
http://www.africa-union.org/

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3. Americas

Argentina's financial crisis was the topic of an analysis from the Independent Evaluation Office (IEO) of the International Monetary Fund (IMF). They say that although the crisis was caused by domestic policy failures, weaknesses in "...surveillance, longer-term program relationship, and in-crisis management, also reflect problems with the decision-making processes in the IMF". http://www.imf.org/External/NP/ieo/2004/tr/eng/tr072904.htm
http://www.imf.org/External/NP/ieo/2004/pr/eng/pr0402.htm

Argentine President Kirchner has announced an inquiry into the 1994 Jewish center bombing.

Canada has withdrawn its ambassador from Iran and says its claim that journalist Zahra Kazemi's death in detention was an accident has no credibility. They have asked the EU and UN to put pressure on Iran to resolve the case.

Colombian rebels of the National Liberation Army kidnapped then released of a Roman Catholic bishop. Members of the paramilitary United Self-Defense Forces of Colombia (AUC) were given safe conduct to address the congress, where they spoke of their willingness to work towards a permanent ceasefire.

In Haiti, the UN envoy said that humanitarian and development aid is crucial and that additional troops would be needed in order to disarm the armed militias that remain active five months after the ouster of former President Aristide.

The US Department of Defense transferred four French citizens detained in Guantanamo Bay to the control of the French government. Detainee review hearings are beginning. http://www.defenselink.mil/releases/2004/nr20040727-1062.html
http://www.pentagon.mil/news/Jul2004/n07302004_2004073009.html

The National Institute of Standards and Technology released an interim analysis of the location of the World Trade Center victims' locations in the twin towers. http://www.nist.gov/public_affairs/releases/wtc_victims_location.htm

The Senate Governmental Affairs Committee held hearings into the recommendations of the 9-11 Commission.
http://govt-aff.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=195

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4. Asia Pacific

Chinese President Hu Jintao has warned the US against completing an $18 billion weapons deal with Taiwan and that it would use force if necessary to prevent independence.

Indonesia announced results from its first direct presidential elections, held in June. Former general Susilo Bambang Yudhoyono received the most votes, with 33.5 percent, followed by incumbent Megawati Sukarnoputri who garnered 25.6 percent, narrowly ahead of third placed former army chief General Wiranto. The two front-runners will contest a runoff election in September. This announcement was delayed for several hours following a small explosion at the election commission.

An explosion on Mauritius killed two and injured 13. An investigation is underway.

Malaysia and Singapore have agreed to expand their coordinated sea patrols to find additional ways to deter terrorism.

Nauru has welcomed an Australian delegation that it taking charge of state finances to help rescue the tiny island from the financial disaster that began when the island's phosphate deposits ran out.

Thailand's inquiry into the killing of 32 militants when heavily armed security forces stormed the Krue Se mosque in the south has found a use of excessive force. Prime Minister Thaksin is reviewing the report and will decide whether to make it public. A second report will suggest how to resolve security problems in the south.
http://www.nationmultimedia.com/page.arcview.php3?clid=3&id=103235&usrsess=1

In Uzbekistan's capital, Tashkent, there were three separate explosions set off nearly simultaneously at three foreign embassies. The suicide bombers attacked the US and Israeli embassies and near the general prosecutor's office. Three people were killed and eight wounded. The attacks came as Supreme Court judge Baxtiyor Jamolov began hearings in the trial of 15 suspects, including two women, have gone on trial in connection with the March-April bombings and attacks that killed 47 people in Tashkent and in the Bukhara region. Charges include terrorism, religious extremism and attempting to overthrow the government. Although prosecutors allege ties with al Qaeda, others believe the attacks were domestically motivated. There is no jury and Judge Jamolov will determine the outcome.

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5. Europe

In Georgia, there has been more fighting in the breakaway province of South Ossetia. Who fired first is disputed, but any decrease in security opens greater threats in this volatile area.

The four Frenchmen sent home from Guantanamo Bay are appearing before an anti-terrorism judge who will decide if there is evidence to warrant further detention.

Ireland plans to set up a commission of inquiry into the 1974 Dublin and Monaghan bombings in which 33 people were killed. The Independent Commission of Inquiry had earlier issued its report raising concerns over allegations of police mishandling and loss of documents that the new inquiry will investigate, but this falls short of a full public hearing.
The prior report is at: http://www.oireachtas.ie/documents/committees29thdail/jcjedwr/Sub-Comm-Barron_Final-31Mar2004.pdf

Italian police carried out raids in several towns, arresting four suspected anarchists associated with the series of parcel bomb attacks.

Irish republican Joe Cahill died in Belfast on July 23. He was a key member and founder of the Provisional IRA, where he served as the Belfast commander and also chief of staff. Sinn Fein President Gerry Adams said: "Joe Cahill spent a life time in struggle. He was both a leader and a servant of the republican cause. In the difficult years of the 1930s and 1940s he and his contemporaries stood against the partition of Ireland and for Irish unity and he was imprisoned on many occasions for his beliefs. He was an unapologetic physical force republican who fought when he felt that was the only option but he also significantly stood for peace and was a champion of the Sinn Fein peace strategy...". http://sinnfein.ie/news/detail/5807 Note the biography, "Joe Cahill: A Life in the IRA" by Brendan Anderson, O'Brien Press. http://www.obrien.ie/book483.cfm

Kosovo's peacekeepers are accused of failing to protect minorities in a new Human Rights Watch report, citing failure of security structures. http://www.hrw.org/english/docs/2004/07/27/serbia9136.htm

Moldova's crisis around schools in the breakaway region of Transdniestria has reached a new level with the closure of a boarding school and eviction of the children, forcing some 60 orphans into the street. Transdniestrians largely speak Russian and Ukraine and have been acting against schools using Moldova's official language, Romanian.

Poland is holding three days of ceremonies to commemorate the 60th anniversary of the Warsaw uprising.

In Chechnya, Russia, a car bomb killed a police officer. Russia authorities have detained some 30 people suspected of involvement in the Ingushetia rebel attack of June 22 in which 90 were killed and 93 injured. A policeman suspected of involvement in the attack killed himself with a bomb attached to his leg. A video of the raids was released on a Chechen rebel website.

The Spanish government and Basque leaders have resumed official relations after a gap of three years. Investigations into the March 11 attacks have uncovered a second car used in Madrid train bombings. A parliamentary inquiry into the attacks continues.

Turkey and Iran have signed a security agreement to counter Kurd rebels and anti-Iranian fighters, naming both the former Kurdistan Workers' Party (PKK) (now Kongra-Gel) and Mujahedin-e Khalq Organization (MKO) terrorist groups.

The British Home Office announced a crackdown on animal rights extremists. They plan to institute measures allowing police to arrest individuals protesting outside someone's home, ban protestors from the area around a person's home for three months, and strengthen harassment laws. Details are in "Animal Welfare: Human Rights - Protecting people from animal rights extremists". Press release and report: http://www.homeoffice.gov.uk/n_story.asp?item_id=1046
http://www.homeoffice.gov.uk/docs3/humanrights.pdf

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6. Middle East

In the Gaza Strip, last week ended with a human chain of tens of thousands of Israelis protesting government plans to pull out, while during the week Israeli forces conducted repeated operations in the area in preparation for the withdrawal. A 50-year old Palestinian woman was killed in crossfire. A 12-year old girl and a member of Hamas were shot dead during a raid. Two militants were killed when their car was blown up in a missile strike. And a 12-year-old boy was shot dead when Israeli troops opened fire on the funeral of two militants when the procession refused to stop.

The anti-Iran Mujahedin-e Khalq Organization (MKO), on the US list of terrorist organizations, has been granted "protected persons" status in Iraq under the Geneva Conventions, by the US Pentagon.

Post-transition violence in Iraq shows no sign of letting up. Bombings, kidnappings and assassinations continue apace. The worst attack was a suicide car bomb outside a Baquba police station that killed 70 people, almost all civilians, and wounded dozens more. Other attacks during the day led to a death toll exceeding 100. The planned national assembly has been postponed and interim Prime Minister Allawi has established a committee to impose media restrictions.

The British Commons Foreign Affairs select committee reports that the Coalitions failure to establish law and order in Iraq created a vacuum and that "We conclude that the violence in Iraq stems from a number of sources, including members of the former regime, local Islamists, criminal gangs and al Qaida. Iraq has become a 'battle ground' for al Qaida, with appalling consequences for the Iraqi people...". Furthermore, "We conclude that the alternative to a positive outcome in Iraq may be a failed state and regional instability." http://www.parliament.uk/parliamentary_committees/foreign_affairs_committee.cfm

The Coalition Provisional Authority's Inspector General has released an audit report on "Provisional Authority Comptroller Cash Management Controls Over the Development Fund for Iraq". The comprehensive review states that millions of dollars have been wasted through fraud, waste and abuse and that the rebuilding efforts have triggered at least 27 criminal investigations stemming from lack of CPA operational controls.
http://www.cpa-ig.org/pdf/cpaig_audit_dfi_cash_Management.pdf

Saudi Arabia has proposed a Muslim security force for Iraq drawn from non-bordering Islamic countries.

In the West Bank, Israeli troops started the week with a shootout that killed five members of the Al Aqsa Martyr's Brigades and a bystander in a restaurant. Yasser Arafat agreed to hand come security controls to Prime Minister Gurei, who withdrew his resignation and ended the 2-week dispute.

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7. South Asia

In a reflection of growing instability in Afghanistan, Medecins Sans Frontieres (Doctors Without Borders) has pulled out of the country. http://www.msf.org/ (Note details in World, above.) Expressing related concerns, the British Commons Foreign Affairs select committee warned, "There is a real danger that if these resources are not provided soon Afghanistan - a fragile state in one of the most sensitive and volatile regions of the world - could implode, with terrible consequences". http://www.parliament.uk/parliamentary_committees/foreign_affairs_committee.cfm

Meanwhile, voter registration efforts are winding down. Afghan President Karzai says he will run again for President but is replacing the current warlord defense minister serving as vice president with Ahmed Zia Massoud, ambassador to Russia and brother of deceased resistance hero Ahmad Shah Massoud.

In the southern Indian state Andhra Pradesh, Maoist rebels of the People's War Group (PWG) held their first open political gathering a week after the government lifted its ban on PWG. In Gujarat, three days of rioting (including acid throwing) were triggered when a Muslim man allegedly teased a Hindu girl, killing at least two people, but a curfew was imposed and the violence is in abeyance. The Indian government and the main faction of separatist rebels in the National Socialist Council of Nagaland (NSCN) have agreed to extend their ceasefire another year.

India and Pakistan are continuing talks on various issues to resolve their long-running disagreements. Discussions over a controversial dam have begun.

In Indian-administered Kashmir, a grenade attack killed one and injured more than 30 civilians. Separatist militants were blamed for this and a grenade attack at a hospital that killed three. A gun battle killed five Indian police officers and two suspected separatists.

Sri Lanka's peace talks have been stalled since April 2003 but after a Norwegian mediator complained of complacency in the peace process, both the government and Tamil Tiger rebels made gestures towards reviving the talks.

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8. Cyberterrorism and Information Warfare

MyDoom worm variants including Zindoe created a number of service disruptions during the week, including attacks against internet search engines including Google, the DoubleClick ad service. http://securityresponse.symantec.com/avcenter/venc/data/w32.zindos.a.html
http://www.sophos.com/virusinfo/analyses/w32zindosa.html
http://securityresponse.symantec.com/avcenter/venc/data/[email protected]
http://www.f-secure.com/v-descs/novarg.shtml

A file offering bogus photographic evidence that Osama Bin Laden committed suicide actually carries the Hackarmy Trojan horse.
http://www.sophos.com/virusinfo/articles/binladen.html

For an excellent discussion of implantable chips see Charles Murray's "Implantable chips get under skin of security experts" in Electronic Engineering Times, July 26. http://www.eet.com/showArticle.jhtml?articleID=25600131

Zambia's government has laid down proposed cyber-crime legislation before parliament. Cyber attacks, such as the case in which then President Chiluba's face on the government website was replaced by a cartoon, are currently not illegal.

The British Home Affairs Committee issued a report supporting identity cards but warning of significant problems ranging from civil liberties concerns and the absence of clarity of purpose to technical implementation. http://www.parliament.uk/parliamentary_committees/home_affairs_committee/hac___040730___34.cfm

The US National Institute of Standards and Technology says the single Data Encryption Standard (DES) is no longer adequate and has requested comments on their proposal to withdraw it in favor of the Triple Data Encryption Algorithm (TDEA).
Federal Register Docket No 040602169-4169-01, http://www.gpoaccess.gov/fr/index.html
Information on TDEA and Advanced Encryption Standard (AES) at
http://csrc.nist.gov/publications/nistpubs/800-67/SP800-67.pdf
http://csrc.nist.gov/publications/fips/fips197/fips-197.pdf

Note InfgoWorld magazine's 2004 Security Survey in the July 26 issue, http://www.infoworld.com/reports/30SRsecurityrr.html

Privacy International held their UK Big Brother Awards
http://www.privacyinternational.org/bigbrother/uk2004/

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9. Finance

Abdurahman M. Alamoudi has pleaded guilty in US court to three felony offenses for violating the International Emergency Economic Powers Act (IEEPA), which imposes sanctions on travel and commerce with Libya; making false statements in his naturalization application; and a tax scheme to conceal his financial transactions from the IRS. http://www.usdoj.gov/opa/pr/2004/July/04_crm_524.htm

ABN AMRO's New York branch reached agreement with federal and state regulators to addresses Bank Secrecy Act and anti-money laundering compliance, including policies and practices relating to the provision of correspondent banking services. No financial penalty was imposed. http://www.federalreserve.gov/boarddocs/press/enforcement/2004/20040726/default.htm

The UN Security Council renewed the Democratic Republic of Congo arms embargo for another year. http://www.un.org/Depts/dpko/missions/monuc/index.html

US federal financial institution regulatory agencies issued new Bank Secrecy Act (BSA) procedures for examining customer identification programs as required by section 326 of the Patriot Act. http://www.fdic.gov/news/news/press/2004/pr7904a.html
http://www.ots.treas.gov/docs/2/25202.pdf

Shell has agreed in principal with the British Financial Services Authority (FSA) and the US Securities and Exchange Commission (SEC) to pay more than GPB80 million in penalties related to the oil giant's restatement of reserves. This includes the largest fine ever imposed by the FSA, of GPB17 million as well as a $120 million penalty to the SEC.
http://www.shell.com/home/Framework?siteId=media-en&FC3=/media-en/html/iwgen/news_and_library/press_releases/2004/pr_announcement_29072004.html&FC2=/media-en/html/iwgen/news_and_library/press_releases/2004/zzz_lhn.html

National Irish Bank has been ordered to pay 64 million Euros ($77.13 million) after it was found guilty of fraud, including setting up bogus accounts to allow customers to evade tax. Further disciplinary measures are likely.
Inspectors' report http://www.odce.ie/new/article.asp?NID=326&NCID=42
Judgement and order http://www.odce.ie/_fileupload/court/NIB_Judgement.pdf http://www.odce.ie/_fileupload/court/NIB_Order.pdf
NIB announcement http://www.nib.ie/0,,51793,00.html

Peruvian President Toledo has said he will permit access to his financial records to put to rest corruption charges.

Bradley Burston provides "A Who's Who of corruption in Arafat's Palestine", Haaretz, July 28: http://www.haaretz.com/hasen/pages/ShArt.jhtml?itemNo=457320&displayTypeCd=1&sideCd=1&contrassID=2

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10. Human Rights

The International Criminal Court has begun investigations into war crimes allegations against the Lord's Resistance Army and violations of international law in Democratic Republic of Congo. http://www.icc-cpi.int
http://www.un.org/apps/news/story.asp?NewsID=11496&Cr=uganda&Cr1=
http://www.un.org/apps/news/story.asp?NewsID=11515&Cr=democratic&Cr1=congo

Cuba released 11 of the 75 prisoners detained last year in a crackdown against political dissidents and journalists.

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11. Law and Legal Issues

Mohammad Reza Aghdam Ahmadi was cleared by Iranian court of killing Canadian journalist Zahra Kazemi, who died in custody in Iran last year. Her family are pursuing other avenues, including asking Canada to bring Iran before the international court in The Hague.

Abu Bakar Baasyir, a radical Islamic cleric in Indonesia, will still be charged with heading Jemaah Islamiah but all charges related to the 2002 Bali bombings will be dropped after the constitutional court ruling that the anti-terrorism law could not be applied retroactively.

Tihomir Blaskic, a former Bosnian Croat general convicted in March 2000 to 45 years in prison for war crimes, will be released from prison. The International Criminal Tribunal for the former Yugoslavia's Appeals Chamber reviewed new evidence to overturn all but three of his convictions, making him eligible for early release. http://www.un.org/icty/pressreal/2004/p875-e.htm

Luis Echeverria, indicted for alleged ordering a massacre of students in 1971, had faced the prospect of being the first contemporary Mexican president to face criminal charges, until a Mexican judge refused to issue the arrest warrant. The ruling will be appealed.

Ahmed Khalfan Ghailani, alleged al-Qaeda militant associated with the East African embassy bombings, has been arrested in Pakistan. https://terrorismcentral.com/Library/Biographies/Bios/Ghailani/List.html

Joseph Magee, a member of the Irish National Liberation Army, pleaded guilty to the murder of British soldier Michael Newman in 1992 near an army recruitment office. Magee was sentenced to life in prison but may be freed under the Good Friday Agreement.

Mexico will extradite six alleged members of Basque separatist group ETA to Spain where they are wanted for terrorist financing and money laundering.

Najamudeen Umar, a member of Thailand's ruling party, has waived parliamentary immunity and gone on trial in connection with a raid by suspected Islamic militants on an army camp last January in which four soldiers were killed.

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12. Transportation

The International Maritime Bureau (IMB) reports that the 30 piracy-related killings in the first half of 2004 are twice the number of the same period last year and constitutes the largest number in a decade despite a decrease in the number of worldwide attacks overall, from 234 to 182. The "Piracy and Armed Robbery Against Ships" report cites 130 ships boarded and eight ships hijacked, showing signs that opportunist thieves are increasingly organized. Attacks in Bangladesh and India fell, while Indonesia continues to account for more than a quarter of all incidents as well as the greatest number of violent attacks. The Malacca Strait increased from 15 to 20 incidents. Nigeria had 13 attacks and the Singapore Straits seven incidents. IMB identifies 24 vulnerable ports and anchorages including Jakarta and Balikpapan in Indonesian, Lagos port in Nigeria and Chennai port in India.
http://www.iccwbo.org/ccs/news_archives/2004/Piracy_report_Jan-June_2004.asp

The Spanish port of Algeciras has become the 21st to sign up to the US Container Security Initiative. http://www.cbp.gov/xp/cgov/newsroom/press_releases/07302004.xml

In the UK staff on First Great Western trains are being issued with DNA swab kits so staff can gather samples from items connected to assaults on employees or passengers and pass the evidence on to the British Transport Police. It is part of an assault pack that also has advice on resolving difficult situations and reporting incidents. http://www.firstgreatwestern.co.uk/news/release.php?item=226

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13. Weapons of Mass Destruction

Iran has broken open the International Atomic Energy Agency seals on its equipment and says they will resume production of centrifuges. They are objecting to international monitoring programs but claim their work is not meant for use in nuclear arms.

The Food and Food and Agriculture Organization (FAO) has set up regional veterinary networks to better combat avian influenza. The Southeast Asia network (Cambodia, Laos, Indonesia, Malaysia, Myanmar, Papua New Guinea, Philippines, Thailand, East Timor and Vietnam) was the first, and similar networks for South and East Asia will follow. Earlier in July China, Thailand and Vietnam reported new outbreaks in chickens of H5N1 bird flu virus that killed at least 22 people and led to deaths or culling of 100 million birds in nine Asian countries. http://www.fao.org/

The US Government Accountability Office called for the Department of Energy to further reduce the use of weapons-usable uranium in civilian research reactors. http://www.gao.gov/cgi-bin/getrpt?GAO-04-807

The Sellafield nuclear reprocessing plant is eight years behind schedule and has not produced any reprocessed fuel since it opened in 2001. This is the finding of a report in the Guardian, http://www.guardian.co.uk/uk_news/story/0,,1269073,00.html
http://image.guardian.co.uk/sys-files/Guardian/documents/2004/07/26/nuclear_documents.pdf

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14. Recently Published

Timothy Garton Ash, "Free World: Why a Crisis of the West Reveals the Opportunity of Our Time" Penguin/Allen Lane; Random House in the US in November

Norman Davies, "Rising '44: The Battle for Warsaw" Viking

Natana J Delong-Bas, "Wahhabi Islam" Oxford University Press

Rodney Hartman, "Ali: The Life of Ali Bacher" Penguin/Viking

Peter Oborne, "Basil D'Oliveira: Cricket and Conspiracy: The Untold Story" Little Brown

Julia Preston and Samuel Dillon, "Opening Mexico: The Making of a Democracy", Farrar, Straus and Giroux

Hugh Thomas, "Rivers of Gold: The Rise of the Spanish Empire" Random House

Joel S Wit, Daniel B Poneman and Robert L Gallucci, "Going Critical: The First North Korean Nuclear Crisis" Brookings Institution

Evan Wright, "Generation Kill" Putnam

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FEATURE ARTICLE: Terrorist Financing and Charitable Organizations: The case of the Holy Land Foundation

In 1999 the New York Attorney General's office advised the US Internal Revenue Service (IRS) of a matter that "may warrant action by the service":
"Holy Land Foundation for Relief and Development (HLFRD). This California not-for-profit corporation was formed, inter alia, to help 'needy families for all mankind.' According to financial reports filed with the Charities Bureau its programs include 'social services,' 'health,' 'education' and 'emergency relief.' However, as the material we are forwarding to you suggests, HLFRD may be affiliated with Hamas, the Middle East terrorist organization, and funds raised by HLFRD may be used to further the goals of Hamas. If such is the case, HLFRD would be acting in violation of its Code section 501 (c)(3) exempt status. We believe that the material we are providing to you contains information sufficient to warrant the Service's investigation of HLFRD to determine whether it is expending funds for purposes other tha[n] those for which it was granted exempt status. Since such an investigation raises law enforcement issues of concern not only to the Service but possibly to other federal agencies, we believe this investigation should be joint, with the United States taking the lead." The next year, the Foundation's records were subpoenaed.

Similar allegations and investigations had been underway for nearly ten years. Until the USA Patriot Act was passed in October 2001, the Federal Bureau of Investigation (FBI) and similar enforcement agencies had limited mechanisms under which to carry out this type of investigation. The FBI's Terrorist Financing Operations Section (TFOC) was established and began working with other agencies on the case of the Holy Land Foundation and other Islamic charities.

The first measure taken was in December 2001 when the US Treasury's Office of Foreign Assets Control (OFAC) designated the Holy Land Foundation, the largest Islamic charity in the US, as a terrorist entity. They said it "masquerades as a charity while its primary purpose is to fund Hamas". This designation meant that the Holy Land Foundation's assets were seized and its funds frozen, effectively shutting it down.

Hamas (Harakat al-Muqawama al-Islamiya, The Islamic Resistance Movement) is the largest charity in the Middle East. In the US it was designated a terrorist organization in 1995. Internationally, most countries, including Australia and the UK, designate only its military wing, the Izz al-Din al-Qassam Brigades. Hamas is a radical Sunni Islamic organization that rejects Israel and fighting for an Islamic state of Palestine. It is known for the use of suicide bombers as well as shootings and kidnappings of Israeli/Jewish soldiers and civilians in Israel and the Occupied Territories. They have been involved in more than 100 terrorist incidents that resulted in more than 500 deaths and over 3,000 injuries.

Given the connection made between the Foundation and Hamas, the investigations took an unexpected turn. In December 2002 when Mousa Abu Marzook of Hamas was indicted for conspiring with Infocom Corporation and five of its employees, Nadia Elashi, Ghassan Elashi, Bayan Elashi, Basman Elashi and Hazim Elashi, for illegally selling computers and computer parts to Libya and Syria, designated state sponsors of terrorism. Ghassan Elashi was also director of the Holy Land Foundation. Ihsan Elashi later pleaded guilty to four of the 39 counts in the indictment and was sentenced to four years in prison and payment of over $280,000 in restitution and is serving his sentence. The others were convicted of various counts on July 7 but sentencing has not been set. Bayan, Basman, and Hazim Elashi have been in federal custody since December 2002. Ghassan Elashi was freed on a personal recognizance bond.

On July 27 a federal grand jury in Dallas, Texas, indicted the Holy Land Foundation and Shukri Abu Baker (Secretary and CEO); Mohammed El-Mezain (Director of Endowments); Ghassan Elashi (Chairman); Haitham Maghawri (Executive Director); Akram Mishal (projects and grants director); Mufid Abdulqater (fundraiser); and Abdulraham Odeh (New Jersey representative). Shurkri Abu Baker, Mohammed El-Mezain, Ghassan Elashi, Mufid Abdulqater and Abdulraham Odeh were arrested but Haitham Maghawri and Akram Mishal had left the US.

The indictment does not suggest that the Foundation directly gave money to Hamas but instead suggests that giving money to Palestinian charities in the occupied Territories was tantamount to financing the organization. Most of the information in the indictment was the same as in the earlier one, but it has added more details about Hamas and specified the funds provided amounted to $12.4 million.

The Department of Justice summarized its case:
"As the U.S. Government began to scrutinize individuals and entities in the United States who were raising funds for terrorist groups in the mid-1990s, the indictment alleges that the Holy Land Foundation intentionally cloaked their financial support for HAMAS behind the mantle of charitable exercise. The indictment alleges that the Foundation and the defendants provided financial support to the families of HAMAS martyrs, detainees, and activists knowing and intending that such assistance would support HAMAS? terrorist infrastructure. In screening potential aid recipients and in providing funds, the defendants allegedly distinguished between needy Palestinian families generally, and those Palestinian families who had a relative "martyred" or jailed as a result of terror activities. In some cases, the defendants allegedly targeted financial aid specifically for families related to well-known HAMAS terrorists who had been killed or jailed by the Israelis. In this manner, the defendants effectively rewarded past, and encouraged future, suicide bombings and terrorist activities on behalf of HAMAS. Since 1995, when it first became illegal to provide financial support to HAMAS, the Holy Land has allegedly provided over $12,400,000 in funding to HAMAS through various HAMAS affiliated committees and organizations located in Palestinian-controlled areas and elsewhere."

The Foundation has aggressively defended itself against all charges. Its designation as a terrorist organization went all the way to the Supreme Court, where their petition for a writ or certiorari was denied. This meant that the executive branch had the authority to designate organizations but there was no right to a court hearing to dispute the executive's finding. The Foundation's investigations into the decision to designate it were revealed in a Congressional hearing and further details were added to a complaint provided to the Inspector General of the Department of Justice that requests an investigation into the FBI's use of "materially misleading" information including erroneous translations. They also claim that FBI investigators relied on secret evidence, possibly from Israel.

The 42-count indictment arose from a three-year Joint Terrorism Task Force investigation that included the FBI, IRS, BICE, Department of State, Secret Service, U.S. Army CID, the Texas Department of Public Safety, and the police departments of Dallas, Plano, Garland, and Richardson, Texas. Despite this level of investment, the charges will be difficult to prove. Such is the nature of terrorist financing -- and legal financial transactions.

Links between non-profit organizations and terrorist groups are a legitimate concern and one that the Financial Action Task Force (FATF) has investigated in some detail. To date, much of the discussion has been around suspected or possible terrorist financing rather than proven incidents -- including the Holy Land Foundation case. Nonetheless, the global presence and size of funds and low level of regulation make then vulnerable to misuse. FATF cites the use of non-profit organizations for fundraising; informal cash collection that could be used to integrate criminal proceeds into legal financial systems; the ability to transfer funds through internal and informal channels; and the ability to provide direct logistical support or serve as a cover for terrorist operations. Participating countries have begun to implement new rules for improved governance and transparency of these organizations. Such steps reflect the expectations of public companies and while they may have little effect in preventing multi-modal terrorist financing, should contribute to limiting large money-laundering style transactions.

As usual, the Newsletter will cover these events as they unfold.

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