7.1 Importance of Cutting Terrorist Financing

“We will direct every resource at our command – every means of diplomacy, every tool of intelligence, every instrument of law enforcement, every financial influence, and every necessary weapon of war – to the destruction and to the defeat of the global terror network … We will starve terrorists of funding …” [1]

President George W. Bush, September 20, 2001

It is beyond a doubt that disrupting terrorist financing is necessary. As President George W. Bush stated in his speech on September 24, 2001, financial resources are considered to be “the lifeblood of terrorist operations” [2]. As stated by US Government authorities, “the fight against al Qaeda financing was as critical as the fight against al Qaeda itself” [3]. One of the key goals of defeating terrorism is to fight the financial structure of terrorist organizations by detecting, disrupting, and disabling their financial networks.

The General Assembly of the United Nations adopted the International Convention for the Suppression of the Financing of Terrorism in 1999; however, only a few countries had ratified the convention before September 11. The US ratified the convention only in 2002 [4] with the beginning of the campaign to “starve the terrorists of funding.” Since the beginning of the War on Terror in 2001, numerous initiatives and policies at the national, regional, and international levels supplemented the convention. A series of new international laws that have criminalized the financing of terrorist activities were introduced by many countries.

The International Convention for the Suppression of the Financing of Terrorism gives the formal definition of the financing of terrorism [5]. The financing of terrorism essentially can be defined as any kind of financial support of terrorism or those who in any way participate in it [6].

There is a good deal of available information on various sources and methods of transferring funds used by terrorists. Funds come from a wide range of legitimate (donations to charitable organizations, front businesses) and illegitimate (petty crime, smuggling, credit card fraud, and drug trafficking) sources. Terrorists move money using the financial system and largely unregulated alternative remittance systems like hawala or just simply carry “bags of money” across borders. They use commodities such as diamonds, tanzanite, and sapphires to store cash value [7]. The ability to adapt which is “shown by terrorist organizations suggests that all the methods that exist to move money around the globe are to some extent at risk” [8].

Practically speaking, preventing terrorist financial flows has been extremely difficult. Nevertheless, detecting and following al Qaeda’s money can be productive in tracking down and preventing terrorist activity.

Interestingly enough, al Qaeda spent only comparatively modest amounts on the planning and execution of its terrorist attacks. However, it needs significant amounts of money to satisfy the overall needs of establishing and running a terrorist network.

Costs of day-to-day operations such as organizing, recruiting, training, and equipping new recruits, paying members and their families, bribing public officials, traveling, promoting al Qaeda’s ideology, and otherwise supporting their activities represent a significant drain on resources.

Disrupting terrorist financing increases the costs and risks of raising and moving funds for terrorists, and “creates a hostile environment for terrorism, constraining overall capabilities of terrorists and helping frustrate their ability to execute attacks” [8].

7.2 Description of Al Qaeda’s Financial Network

There is no other terrorist organization that has built such a sophisticated, complex, robust-and-adaptive-to-changes global financial network like al Qaeda’s. It is based on a system that was built by bin Laden to provide support to the mujahedin fighters in Afghanistan during the Soviet invasion in the late 1980s. It uses different sources of funding and a variety of methods of storing and transferring funds. However, as noted in the Independent Task Force Report on Terrorist Financing, “the most important source of al Qaeda’s money is its continuous fund-raising efforts. Al Qaeda’s global fund-raising network is built upon a foundation of charities, nongovernmental organizations, mosques, websites, intermediaries, facilitators, and banks and other financial institutions” [9].

Although al Qaeda’s financial network has clearly been weakened by the War on Terror, it certainly has not been destroyed. While new financial sector regulations became a significant obstacle for terrorists to move money through the financial system, al Qaeda’s financiers have quickly adapted to the new environment. Terrorists have been forced to move their organizations outside the formal financial system. Even before 9/11, al Qaeda and its cells used the global financial system to move funds very cautiously in a manner that did not arouse suspicion. As a result of the new counter-terrorism financing policies, they became increasingly careful. Most likely, instead of moving funds through the financial system, terrorist groups are using other channels of transferring funds and other means of storing wealth, such as trade in commodities like gold and diamonds, bulk cash smuggling, and underground banking systems such as hawala.

According to the former chief of the FBI’s Terrorist Financing Operations section, Dennis M. Lormel, “The laws passed since 2001 have closed some gaps and addressed vulnerabilities that made it easy for al Qaeda to raise and transfer money; however, the network has responded quickly” [10]. Loretta Napoleoni, author of Modern Jihad: Tracing the Dollars Behind the Terror Networks, says “Terrorist financing is very different today … five years ago, we had large movement of funds which went through the international financial system” [11]. Today, cells are raising their own money as opposed to receiving funds from outside sources that could be easily detected by government authorities.

Al Qaeda’s affiliated groups have become self-funded by deriving income from local legitimate businesses or from various criminal activities such as petty crime, fraud, racketeering, and kidnapping. Because of the small scale of such transactions, there is little reason to suspect terrorist involvement. As Stephen Swain, a former official at Scotland Yard, noted, “That’s the cleverness of these schemes – to keep it under the radar. By doing this, they can raise significant amounts of money, fairly quickly, and there’s no real way to detect it” [10].

Today’s al Qaeda cannot be viewed as a single organization as it became very fragmented over the last decade. Al Qaeda has transformed from a group with hierarchical organization with a large operating budget into an ideological movement with affiliated groups around the world. Al Qaedaism inspires individuals or small groups to carry out attacks, without operational support from the central organization. Because cells become self-sufficient deriving income from local legitimate businesses or from various criminal activities, it becomes nearly impossible for authorities to detect the organization’s activities and apprehend its operatives.

The weakened financial state of al Qaeda should not be underestimated as it still poses a threat. Terrorist attacks are relatively cheap. Estimates suggest that al Qaeda spent $500,000 on the 9/11 attacks, which came from an established financial network. In comparison, the group that carried out the Madrid bombings of 2004 used only $10,000–15,000, which was generated by trafficking drugs and selling counterfeit CDs. The London bombings of 2005 were even cheaper – $2000 – money that most likely was personal savings. This is a main difference between top-down al Qaeda, as it once was, when it funded operations from Afghanistan, and the new, much looser organization of localized affiliates inspired by al Qaedaism that raise their own funds and pick their own targets.

7.3 History and Development of Al Qaeda and its Financial Network

The leader of al Qaeda, Osama bin Laden, was born in Saudi Arabia in 1957. His father, Muhammad bin Laden, came from Yemen and rose from poverty to being Saudi Arabia’s foremost construction developer who built his empire by winning contracts from the Saudi royal family for the construction of royal residences. Osama got his inheritance at 11 when his father died in a helicopter crash in 1968. His wealth was anywhere from $30 million to $300 million. However, it is impossible to determine what remains as he has used his wealth to finance al Qaeda and withheld details of his fortune. His wealthy and well-respected family separated itself from Osama, but US authorities believe that some family members gave him access to family funds [12].

While studying at the King Abdel Aziz University in Jidda, bin Laden was greatly influenced by Abdullah Azzam, a well-respected Palestinian Sunni Islamic theologian [13]. Azzam then became his mentor in Afghanistan and the ideological father of al Qaeda. In 1979, when the Soviet Army invaded Afghanistan, Osama left Saudi Arabia to join the Afghan rebels, the mujahedin, in their fight with the Soviets. Although bin Laden was from a wealthy family, his commitment was to Afghan and Muslim independence, and as a result his influence and popularity among the mujahedin was significant. “He not only gave us his money, but he also gave himself” [14].

In 1984, Abdullah Azzam and Osama bin Laden cofounded the Maktab al Khidmat (MAK) or Afghan Bureau of Services [15], which was later reconfigured by bin Laden into an organization called al Qaeda (The Base). Bin Laden took charge of the group’s finances and was instrumental in the recruitment of Muslims to the “Afghan Arabs.” MAK provided logistical help, raised funds, disseminated propaganda, recruited new members, and channeled foreign assistance to the mujahedin. “MAK distributed $200 million of Middle Eastern and Western aid, mainly American and British, destined for the Afghan jihad” [15]. MAK received the funds from various sources. Bin Laden used his family wealth to help the rebels. He also raised money among wealthy Gulf Arabs, and through charity organizations. MAK collaborated extensively with Pakistan’s ISI, the Inter Services Intelligence, which allegedly was distributing arms and money from the CIA and providing training for the mujahedin [15]. “During the Afghan war, the Central Intelligence Agency provided roughly $500 million a year in material support to the mujahedin” [16]. Although Milton Bearden, a retired CIA officer, claims that the CIA had no direct relations with bin Laden, US officials admit that some of the financial aid aimed for the mujahedin may have ended up in bin Laden’s hands [13].

Near the end of the Soviet–Afghan war, Azzam’s and Osama’s relationship deteriorated as they disagreed on a number of issues. Azzam hoped to leverage the mujahedin as a “rapid reaction force” ready to fight for the independence of all Muslims [15]. Osama and Ayman al Zawahiri, his new mentor, who at the time was the head of Egyptian Islamic Jihad, wanted to recreate the Islamic Caliphate by declaring war on corrupt governments in the Middle East and on the United States, as most of these governments were American allies. He wanted to transform MAK into “The Base” or al Qaeda, an organization that would form the basis on which a global Islamic army would be built. According to many insiders, al Zawahiri transformed Osama from a guerilla into a terrorist. The two wanted to train the mujahedin in terrorist tactics [17]. Azzam issued fatwa that jihadi funds used for terrorist training contravened Islamic law [15]. As this tension and Osama’s desire to reconfigure MAK into al Qaeda grew, it became obvious that the power struggle between Azzam and bin Laden would end only with the removal of one of them. Azzam and his two sons were killed in 1989. Although it is uncertain who killed him, in his book Inside al Qaeda: Global Network of Terror, Rohan Gunaratna, an international terrorism expert, suggests that Azzam was killed by rival Egyptians who acted on bin Laden’s orders. In any case, Azzam’s assassination left Osama bin Laden in full control of al Qaeda’s future [15].

Following the withdrawal of the Soviet Army from Afghanistan in the late 1980s, bin Laden returned to Saudi Arabia. In 1990, Iraq invaded Kuwait and Osama offered the Saudi army the help of Arab veterans of the Afghan conflict. However, the Saudis chose to accept US help instead, and invited American troops, which had never happened before. Like many other Muslims, bin Laden saw the US army’s presence as an assault on Muslim lands.

Bin Laden began to give speeches accusing the Saudi regime of corruption and being un-Islamic. King Fahd placed him under house arrest in 1991, and Osama subsequently fled the country to Sudan, where he was invited by the National Islamic Front. Later in 1994, Saudi authorities revoked bin Laden’s citizenship and froze his assets. “Bin Laden brought resources to Sudan, building roads and helping finance the government’s war against separatists in the south” [18]. He also started a series of businesses whose proceeds he used to finance some of al Qaeda’s operations. While in Sudan, bin Laden formed al Qaeda based on the MAK structure established in Afghanistan. Al Qaeda began to spread its network around the world, with its regional centers in London, New York, Turkey, and other countries. In the early 1990s, bin Laden was focused on launching attacks on the United States, “the head of the snake” as he called the country [18]. In the period between 1992 and 1996, al Qaeda carried out its first attacks in Yemen, Somalia, and Saudi Arabia aimed at Americans.

Under US and Saudi pressure, bin Laden had to leave Sudan in 1996. The Sudanese Government seized his assets after he abandoned the country. Bin Laden moved to Afghanistan, where he was offered support from the Taliban in exchange for money and a supply of numerous fighters to support the Taliban regime. In 1997 and 1998, bin Laden was working on creating alliances with other Islamist groups by sending deputies to their leaders and telling them that they had to unite in coalition to mobilize Muslims against the Americans. As a result, in 1998 al Qaeda formed an alliance with other terrorist groups: the Egyptian Islamic Jihad, Islamic Group of Egypt, Jamiat Ulema-e-Pakistan, and Jihad Movement of Bangladesh [15]. Bin Laden and Al Zawahiri, the leader of the Egyptian Islamic Jihad, issued fatwa in 1998, just half a year before the attacks on the US embassies in Kenya and Tanzania, in which they announced:

“Ruling to kill the Americans and their allies – civilians and military – is an individual duty for every Muslim who can do it in any country in which it is possible to do it, in order to liberate the al-Aqsa Mosque and the holy mosque [Mecca] from their grip, and in order for their armies to move out of all the lands of Islam” [19]

Saudi Arabia tried to force the Taliban into extraditing bin Laden after the 1998 bombings. The Taliban’s determination to protect bin Laden resulted in a breakdown in diplomatic relations between Saudi Arabia and Afghanistan.

And then there were the 9/11 attacks. The Federal Bureau of Investigation stated, “The evidence linking al Qaeda and bin Laden to the attacks of September 11 is clear and irrefutable” [20]. The attacks aimed to halt the economic and political power of the United States, and had more devastating casualties than any other terrorist attack ever known.

According to the 9/11 Commission’s report:

“The September 11 hijackers used US and foreign financial institutions to hold, move and retrieve their money. The hijackers deposited money into US accounts primarily by wire transfers and deposits of cash or travelers’ checks brought from overseas. Additionally, several of them kept funds in foreign accounts, which they accessed in the United States through ATM and credit card transactions. The hijackers received funds from facilitators in Germany and the United Arab Emirates or directly from Khalid Sheikh Mohammed¹ as they transited Pakistan on their way to the United States” [3]

The hijackers responsible received funds for pilot training, living and travel expenses, and returned about $26,000 “unused” money to a facilitator in the UAE a few days before carrying out the attacks [3].

Osama bin Laden’s foremost accomplishment was building al Qaeda’s financial network based on MAK’s system. It was built from the foundation of MAK’s system used to provide financial support to the mujahedin during the Afghan war. Most of al Qaeda’s infrastructure was developed in the late 1980s. At that time bin Laden started to develop a strategy to make his organization financially self-sufficient. Not only did he want to establish a fundraising system, he also was interested in finding ways of transferring funds to finance al Qaeda’s operations around the world. Bin Laden used a variety of sources to raise funds for al Qaeda. Besides the network of charities developed by Azzam and bin Laden’s personal contacts with Saudi charities and wealthy donors, bin Laden’s brother-in-law, Mohammed Jammal Khalifa, founded a number of charitable organizations in the Philippines; several additional charities were established in Malaysia and Indonesia. One of the reasons why Southeast Asia was ideal for al Qaeda was the existence of Islamic charities and banks with lax regulations, and widespread money laundering [21]. These conditions simplified the process of collecting and transferring funds around the world. Charities were the main pillar of al Qaeda’s financial structure. As well as helping to raise funds, some charities could also move these funds between their offices around the world. However, it was unknown to the majority of charities that al Qaeda members were employed by these charities or that donations were used to support terrorist activities.

For many years, it was thought that bin Laden used his personal wealth to finance the organization. It was thought that he inherited about $300 million, money that he used in Sudan and Afghanistan. However, the National Commission on Terrorist Attacks on the United States, in Monograph on Terrorist Financing, dispels this myth. Between 1970 and 1993 or 1994, bin Laden was given approximately a million dollars per year, which makes $23–24 million in total, but not the $300 million fortune [3]. As mentioned before, the Saudi Government froze his assets when he left the country. Also, his assets in Sudan cannot be viewed as the source of the money since the Sudanese Government expropriated these assets. After moving back to Afghanistan, bin Laden was in a weak financial state. After its proliferation in Afghanistan, al Qaeda supported itself through fundraising. It appears that al Qaeda directly received funding from wealthy donors through financial facilitators. Most of these wealthy donors were from the Persian Gulf region and known as the Golden Chain. As with charities, not all of the individual donors who were approached by the facilitators, charity officials, and fundraisers knew of the destinations of their donations.

It was long thought that Saudi Arabia was one of the leading sources of al Qaeda financing. However, there was no evidence found to support that allegation. Moreover, there was no conclusive proof that any government provided financial support to al Qaeda. Still, some governments may have known about al Qaeda’s fundraising activities in their countries but turned a blind eye to it [18].

As noted earlier, after the 9/11 attacks and the beginning of the War on Terror, al Qaeda’s funding suffered substantially. Despite the reduction in al Qaeda’s funding, it is important to remember that little funding is needed to implement a terrorist attack. With al Qaeda’s decentralization, individual cells became self-sufficient, with charities and individual donors still being the main source of funding for these groups.

7.4 Organizational Structure: Control Over Finances Within Al Qaeda

Before 9/11, al Qaeda was largely centralized, with headquarters located in Afghanistan. Osama bin Laden was in firm control of the organization – he had the final decision over all of al Qaeda’s missions. Some terrorist experts compare the al Qaeda structure to a business enterprise. Peter Bergen thinks that al Qaeda resembled Saudi Binladin Group, the giant construction company founded by Osama’s father [22], where bin Laden acted as director and established its overall direction with input from his shura or advisory council (which represented bin Laden’s close associates). These top advisers made executive decisions for the group. There were six committees reporting to the shura council²: “Sharia” and the Political Committee responsible for issuing fatwa; the Military Committee responsible for proposing targets and planning of attacks; the Security Committee responsible for physical protection and intelligence collection; the Information Committee responsible for propaganda; the Finance Committee; and the Foreign Purchase Committee [18] (see Figure 7.1).

There were two committees in this structure that were related to finance: the Finance and Foreign Purchases Committees that consisted of professional bankers, accountants, and financiers [15]. The Finance Committee was responsible for fundraising and budget planning issues, such as support for training camps, living expenses, travel, housing costs, salaries, etc. The purpose of the Foreign Purchase Committee was to acquire weapons, explosives, and technical equipment from abroad. However, the National Commission on Terrorist Attacks stated that this structure “served as means for coordinating functions and providing financial support to operations. Specific operations were assigned to carefully selected cells, headed by senior al Qaeda operatives who reported personally to bin Laden” [3].

For instance, Indonesia’s civilian intelligence service has linked Hambali, whose real name is Riduan Isamuddin, with the 2002 Bali attack. He is believed to have been in control of the operation, as well as the financial conduit [23]. Financial operations worldwide were managed by regional managers. For example, Mohammed Jamal Khalifa, bin Laden’s brother-in-law, was responsible for worldwide investments in Mauritius, Singapore, Malaysia, and the Philippines [15]. He was also in charge of financial support for the Operation Bojinka plot [24], the large-scale terrorist attack by Ramzi Yousef and Khalid Shaikh Mohammed to blow up 12 airliners over the Pacific, planned to take place in January 1995.

As the US military’s Operation Enduring Freedom in Afghanistan was launched on October 7, 2001 in response to the September 11, 2001 attacks on the US, al Qaeda lost its “safe haven” for planning terrorist attacks, as well as the majority of its senior leadership, and was forced to decentralize. However, experts fear that al Qaeda’s structure has allowed its operation even in the absence of centralized control.

Ongoing counter-terrorism operations have isolated al Qaeda’s leadership. Al Qaeda’s command cadre has been on the run and they are more preoccupied to evade being captured or killed. Communication and coordination of complex operations as well as raising and transferring funds between center and cells have become extremely difficult and risky for terrorists due to isolated leadership. However, new operatives are emerging to replace old leaders. These emerging leaders can be viewed as proof that al Qaeda can adapt to new circumstances and regain its leadership [25]. They are no longer old school veterans of the 1980s Afghan war, but they are assuming greater responsibilities and autonomy. They are less able to communicate with each other. Al Qaeda has not been eradicated but instead has been spread around the world. Authorities have found it more difficult to apprehend terrorist operatives and detect their activities.

Al Qaeda went through a transformation, from a territorially based group with hierarchical organization to a more decentralized, ideological movement relying on both self-sufficient cells and affiliated groups. The 2003 suicide attacks in Casablanca and Istanbul were carried out by attackers from different groups, but all of them were linked to al Qaeda [26].

Prior to September 11, cells were encouraged to be self-sufficient for all their expenses apart from operational expenses. Al Qaeda’s headquarters raised funds for training, propaganda, and operational expenses. Cells were expected to raise money to cover living expenses. As al Qaeda has become decentralized, its financial network has also become decentralized. The September 11 attacks were the last attacks that were planned, funded, and carried out under direct supervision of al Qaeda’s command cadre. The consequent attacks were executed by individuals and groups that were only linked to al Qaeda ideologically [27].

A network of self-sufficient cells is more adaptable and less likely to be detected. Local cells and affiliated groups need less funds, the means used to raise money vary widely and depend on local conditions, there is less need for fund transfers, and communication between groups is minimal [28]. These groups are more autonomous in their operation and self-funded by deriving income from local legitimate businesses or from various criminal activities. The small scale of their fundraising operations generally does not raise suspicion of terrorist involvement. Also, in case of attack on one source of the funding, terrorists can easily shift to another.

Since the beginning of the War on Terror, the US Government, together with the European Union and other members of the international community, have made a major effort to disrupt terrorist financing around the world, enforcing numerous laws and regulations. Dozens of charities have been closed, more than 172 countries have frozen millions of terrorist assets, and more than 100 countries have implemented new anti-terrorism regulations and policies, including anti-money laundering legislation [26]. Al Qaeda’s financial network has been disrupted significantly. With several important financial facilitators being killed or arrested, the amount of funds raised has decreased and risks of raising and transferring money have increased. In a taped message detected by CBS News in 2009 and sent by Mostafa Abul Yazid³, the terror group’s chief financial manager asks a contact in Turkey for immediate funds. “We are lacking funds here in the Afghan jihadi arena … The slow action in the operations here nowadays is due to the lack of funds, and many mujahedin could not carry out jihad because there’s not enough money” [29]. According to US Treasury official David Cohen, al Qaeda had often requested funds in 2009. He said “We assess that al-Qaeda is in its weakest financial condition in several years and that, as a result, its influence is waning” [30]. However, he asserted that if the organization had donors who were “ready, willing and able to contribute,” the situation could be quickly changed [30]. Al Qaeda has regularly instructed followers that donating is a viable alternative to fighting [31]. Despite being seriously wounded and forced to decentralize, al Qaeda still poses a threat as it is a flexible, adaptive, and patient organization that can draw on global support around the world.

7.5 Al Qaeda’s Portfolio and Sources of “Revenues”

The size of al Qaeda’s portfolio as well as its annual budget is unknown. Various sources give estimates that differ to a large extent. For example, in 2002, the United Nations Monitoring Group referred to an estimated figure of donations from individual donors of between $16 million and $50 million. However, there was little information to back up these numbers [32]. The 9/11 Commission Report stated that the CIA estimated that, prior to September 11, al Qaeda’s annual budget was about $30 million per year. For many years, it was thought that Osama bin Laden financed al Qaeda’s expenses by his personal wealth. He allegedly inherited a fortune, with estimates ranging from $25–30 million to $250–300 million. However, as noted before, this is a myth. As stated in a Task Force Report on Terrorist Financing, “The most important source of al Qaeda’s money is its continuous fund-raising efforts” [9]. The key sources of al Qaeda’s funding can be divided into three groups:

7.6 Methods of Transferring and Storing Funds

Al Qaeda uses various mechanisms to move and store its funds. According to the Financial Action Task Force (FATF) report on Terrorist Financing [8], there are three main methods terrorists use to move their funds or transfer value. They are:

Besides these methods, terrorists abuse alternative remittance systems (ARS), charities, and businesses, and smuggle precious stones and metals as a cover of moving funds.

Prior to 9/11, al Qaeda relied on the financial system to transfer funds. It extensively used commercial banks, shell banks, front companies, charities, and financial service businesses to move money around the world. Al Qaeda used the international banking system from the beginning. Bin Laden, as well as other top cadre members and financial facilitators, had bank accounts around the world. For a period of time, al Qaeda has targeted areas with lax financial regulations and anti-money laundering laws and inefficient banking oversight. Over the years, regional banking centers in the Middle East have avoided building anti-money laundering regimes and oversight of the banking system consistent with international standards. For instance, funds for the attempted assassination of President Mubarak went through the National Commercial Bank (NCB), the largest bank in Saudi Arabia. It transferred millions of dollars to al Qaeda’s accounts via corresponding banks in London and New York [15]. The NCB chairman, Khalid bin Mahfouz, denied that his bank was involved in funding an al Qaeda group. He stated that he could not have been aware of every wire transfer moving through the bank, and that if he knew that such transactions were taking place, he would not have allowed it. There was no evidence found that Mahfouz was personally involved in any of these transactions. He was also involved with the Bank of Credit and Commerce International (BCCI), another bank from al Qaeda’s infrastructure. BCCI was a major international bank founded in 1972 by Pakistani financier Agha Hasan Abedi, with operations in 69 countries. However, the bank suffered significant losses from its businesses in lending, currency trade, and deposits. Khalid bin Mahfouz was a principal shareholder and director of the BCCI Group. He was convicted in the USA for large-scale redemptions on investments prior to the bank’s failure in 1991, “which resulted in a gross misstatement of the true financial picture of the bank” [53]. The BCCI’s worldwide Ponzi scheme collapse resulted in large losses for investors. Although Mahfouz denied all allegations, he paid a fine of $225 million [53].

BCCI was involved in fraudulent operations and was a popular bank among money launderers, drug cartels, weapons smugglers, and terrorist organizations. When BCCI was shut down, it was discovered that bin Laden as well as other terrorists held accounts there [54]. Apparently, the bank was also used to channel money from various donors to the mujahedin in Afghanistan.

Gunaratna writes that al Qaeda’s financial network was derived from BCCI [15]. Al Qaeda maintains a network with “feeder” and operational accounts to channel funds to the user of this money. Feeder accounts are set up for legitimate charities or businesses. The operational accounts belong to al Qaeda’s operatives whose identity is concealed from the public. Cells have access to these accounts to fund their operations. Transfers from the feeder to operational accounts are done through several other bank accounts to conceal the real motive of the transfer [15].

The Islamic banking system provides legitimate banking services to Muslims and adheres to sharia, or Islamic law, which prohibits making money on loans and charging of interest. There are five ways in which Islamic banks provide money to their customers: (1) mudahara, money provided to an investor and losses and gains are co-shared; (2) quard al-hasanah, an interest-free loan; (3) musharaka, where the lending institution becomes a shareholder; (4) murabaha, when a bank buys and sells assets with a mark-up; (5) ijara, a leasing agreement, when the bank buys an object and rents it to the customer. There are three types of accounts used by Islamic lending institutions: (1) current deposit accounts with no interest earned; (2) limited murabaha deposits where funds can be used by the bank for the investment projects; (3) limited mudaraba deposits where the bank together with the customer determine the investment project and share the returns [55]. Although the Islamic banking has been growing rapidly, the regulation and oversight of the banking system is not up to international standards. Many Islamic banks possess a greater degree of autonomy and operate under lax regulatory oversight and controls. Moreover, al Qaeda and other Islamic terrorist groups can often find sympathizers from within Islamic banking.

After 9/11, al Qaeda’s financial network has been largely disrupted due to increased regulations in the banking system. As a result, terrorists adapted by using tactics that have allowed them to better hide their assets and move them in informal or alternative ways of transferring funds.

Terrorists are attracted by alternative remittance systems (ARS) because they are convenient, reliable, and available 24 hours, and they are generally not subject to strict regulatory oversight. Due to rapidity and anonymity of these systems, they are one of the favorable methods of transferring funds used by terrorists. The main feature of ARS is the ability to move funds without physical movement of currency. The most widespread network for informal transfers is hawala.

Hawala appeared many centuries before the current financial system was formed. The word comes originally from the Arabic language and means transfer or remittance. There are other similar systems known in Pakistan (hundi), Philippines (padala), and Somalia (xawilaad).

Hawala is a fast and cost-effective way to transfer funds, especially for those who are beyond traditional financial services. It is challenging to accurately measure the value of funds passing through these systems; however, estimates are at tens of billions of dollars. For instance, it is estimated that in Pakistan more than $7 billion passes through hawala channels each year [56].

Hawala works in a similar way to Western Union or MoneyGram. Figure 7.2 shows how it works. First, a person in one country who wishes to send money to a recipient in another country contacts hawaladar and gives him instructions. Hawaladar, a hawala operator, contacts a counterpart hawaladar in the recipient country via phone, email, etc., who in turn distributes funds to the intended recipient. The recipient has to be verified by some kind of code passed to him from the sender. Over time, the accounts between the two hawaladars may become unbalanced and must be settled. The settlement can take various forms, such as “reciprocal payments to customers, physical movement of the money, wire transfer or check, invoice manipulation, trade or smuggling precious stones or metals such as gold and diamonds” [57].

There are numerous reports that terrorists have used hawala prolifically. The 1998 US embassy attacks in Africa were financed partially by a Pakistani hawaladar [57]. When, following the 9/11 attacks, the United States began Operation Enduring Freedom in Afghanistan, the ruling Taliban and al Qaeda’s operatives used hawala to transfer millions of dollars to Pakistan [58]. Hawala can be abused by narco-traffickers and other criminals. According to an anonymous source associated with a hawala business, “Hawala dealers do not care about where the money comes from or what it is being used for … They only concern themselves with the deal” [59].

Terrorists have been using charities not only as a source of financing but also as a method to move funds. Terrorists abuse the fact that foundations and charities often use financial transactions that appear legitimate. For example, the Global Relief Foundation reported that 90% of donations were transferred abroad between 1994 and 2000 [3]. As previously discussed, GRF has been linked to and has provided support and assistance to the al Qaeda network, and other known terrorist groups. Another US charity, Benevolence International Foundation, also transferred donations abroad for use in terrorism [3].

Criminal organizations and terrorist groups have long been misusing the international trade system to move funds. The FATF stated that “the international trade system is clearly subject to a wide range of risks and vulnerabilities that can be exploited by criminal organizations and terrorist financiers” [60]. Officials estimate that hundreds of billions of dollars are laundered through international trade [61].

The means for money laundering through trade channels vary greatly in complexity. The basic methods of abusing the system of international trade include the “over- and under-invoicing of goods and services, multiple invoicing of goods and services, over- and under-shipments of goods and services, and falsely describing goods and services” [61].

More complicated schemes besides involvement of various fraudulent trade practices can also involve other illegal techniques such as smuggling, corruption, narcotics trafficking, and tax avoidance. These illegal practices can be so complicated and intertwined that it is extremely difficult for effective law enforcement.

One of the most basic and oldest methods of misuse of the international trade system is over- and under-invoicing of goods and services by importers and exporters. The exporter transfers value to the importer by under-invoicing goods, because the goods are undervalued and thus the exporter receives less and the importer is able to make a profit by selling the goods on the market for their true higher value. Vice versa, by overvaluing the goods, the exporter will receive a greater amount than the true value from the importer, and thus profit from the difference. Figure 7.3 shows a case study illustrating over- and under-invoicing schemes.

In this example, a terrorist or criminal wants to launder money to a foreign country. A foreign exporter ships 1 million widgets worth $2 each, but invoices a domestic importer for 1 million widgets at a price of $1. Therefore, the exporter launders $1,000,000 abroad, as the importer pays $1,000,000 and receives the shipment worth $2,000,000, which is then sold in the domestic market [61].

In the opposite example, when a terrorist or criminal needs to launder money into the country, the domestic exporter ships 1 million widgets worth $2 each, but on the invoice states a price of $3 per widget. In this case, the exporting company receives a $1,000,000 extra payment, as it receives a payment of $3,000,000 and ships goods worth only $2,000,000 [61].

The use of over- and under-invoicing techniques is only possible when there is an agreement between exporter and importer, which often are controlled by the same company.

John Zdanowicz, a professor of finance at Florida International University, developed a statistical program called the International Price Profiling System (IPPS) to track money laundering through international trade. He analyzed US Government trade figures, calculated average prices for merchandise, and identified abnormally priced products.

“The IPPS analysis evaluates an international trade price and produces a ‘Risk Index’ that ranges between ‘−4’ and ‘+4.’ A negative [figure] indicates the potential of money being moved out of the United States to a foreign country. A positive [number] reflects the potential of money being moved into the United States from a foreign country. The magnitude of the index reflects the probability or likelihood that a price is overvalued or undervalued” [62].

In his article “Trade Based Money Laundering and Terrorist Financing,” Zdanowicz details how fraudulent invoicing is used to transfer money across borders. By comparing invoice prices with average world prices, Zdanowicz estimated that $192 billion was moved out of the USA in 2005 via undervalued and overvalued imports, and $189 billion in 2006 [63].

As government control and oversight over banks, charities, and other financial service sector businesses has become stricter, terrorist groups find it more challenging to raise and move funds. As a result, terrorists are turning from formal financial systems to the most basic and oldest method of moving funds – the physical movement of bulk cash using cash couriers. According to Stuart Levey, undersecretary of Treasury for terrorism and financial intelligence, there is “a trend toward bulk-cash smuggling and use of cash couriers” [64].

Cash smuggling is widespread in the Middle East, Southeast Asia, and Africa, assisted by ineffective border security and lax anti-money laundering enforcement practices. Unlike in the West, many people carry cash and most transactions are conducted in cash. Therefore, in such cash-based economies with the electronic banking system in an embryonic state, large cash movements can be viewed as normal and not always raise suspicion of authorities.

To terrorists, the main advantages of this method of moving funds are that there are no traceable paper trails left and no third party such as bank officials that can suspect the illicit purpose of the transfer involved. As the cost of attacks can be relatively cheap, cash moved across borders for terrorist purposes is at very low levels, making it difficult to detect and stop. But it also can be a less efficient method as there is a possibility of getting caught, and some couriers can be tempted to steal the money. Also, it is more expensive than moving money using wire transfers as it involves arrangement of the travel documents. Al Qaeda assists in travel arrangements for the courier, who passes over the package to a contact at the airport. It is often the case that the courier has no information on the purpose of the mission beyond delivering the package [58].

The attempts by international authorities to prevent cash smuggling have not been successful, especially in regions where carrying large sums of cash is normal. It is almost impossible to stop cash smuggling as it is impossible to search everyone coming to the country. According to an Indonesian authority, “you could bring a container of cash into the country without being noticed” [21]. According to Malaysian and Singaporean intelligence reports, the Jemaah Islamiya received about $40,000 in 1997 and $70,000 in 2000. Omar al-Faruq⁴ testified of transferring $200,000 to the Jemaah Islamiya Indonesian cell after 2000 [21].

A leader of the Jemaah Islamiya network in Malaysia used a cash courier to transfer approximately $15,000 used in the Bali bombings. Khalid Sheikh Mohammed used a Pakistani courier, Majid Khan, to deliver $50,000 to Hambali in Thailand in early 2003 [21]. The case of Jamal al Fadl provides another example.

In 1993 Jamal al Fadl, a key witness in the 1998 US embassy bombings trials and bin Laden’s finance officer from 1991to 1996, revealed his mission from Sudan to Amman in Jordan with funds for a group associated with al Qaeda in Jordan and the Palestinian territories. He smuggled $100,000 in cash, which was concealed among clothes in his suitcase. His contact in Jordan met him and enabled him to pass through customs. “He talked with one of the customs people and they didn’t check my bag,” al Fadl revealed [65].

Terrorist organizations also move their assets in the form of precious stones and metals such as diamonds and gold because they are highly valuable, convertible, easy to conceal, and as with cash smuggling of this method also does not leave a paper trail.

Although a link between al Qaeda and the diamond trade is a contentious issue, officials from the UN Special Court for Sierra Leone, representatives of Global Witness, media and other experts have pointed to evidence that al Qaeda was involved in the West African diamond trade. According to Douglas Farah, a Washington Post reporter and the author of Blood From Stones, al Qaeda was interested in profiting from gemstones in West Africa, East Africa, and Europe almost since its beginnings. West Africa is attractive to terrorist groups like al Qaeda because in countries like “Liberia, Sierra Leone and others in the region, governments are weak, corrupt and exercise little control over much of the national territory. Some states, like Liberia under Charles Taylor, were in fact functioning criminal enterprises” [66].

Al Qaeda’s diamond purchases in West Africa picked up at the end of 2000 and lasted until just before 9/11. Al Qaeda operatives were paying above market value because their goal was to transfer funds into the stones and not to make money. Farah states that al Qaeda allegedly accumulated $20 million worth of diamonds prior to 9/11 to move the funds out of the banking system and into more undetectable commodities [67].

Gold presents another opportunity for moving and storing funds. A former senior Treasury official, Patrick Jost, noted, “There can be no doubt that al Qaeda has placed a large share of its assets in gold. This metal is indeed the best means of transferring secret funds. Jewelers in the Middle East and Indian subcontinent act as virtual bankers and due to its secret and archaic nature, this trade is particularly difficult to track down and infiltrate” [67].

Gold is a favorite commodity of groups like al Qaeda used to store and move funds. A large amount of cash deposited into the bank account can raise red flags and be tracked by automated systems and monitored by the authorities. Gold can be melted, smelted, and broken down into smaller pieces, making it harder to track down the original value. Gold stored in a deposit box does not have an audit trail in the banking system and can go unnoticed. Gold is a “near cash” commodity and is used by terrorists not only to store and move funds but also as a means of payment. Gold is an international market commodity and it can be converted into any currency. While gold’s value can fluctuate over time, gold is considered a traditional hedge against inflation. Moreover, any loss will be a small price to pay for the security and secrecy afforded by converting the hard currency to an untraceable asset.

References

1. Transcript of President George W. Bush. Address before a joint session of Congress on the United States response to the terrorist attacks of September 11. September 20, 2001; Available at: < http://www.presidency.ucsb.edu/ws/index.php?pid=64731#axzz1WRxfaFna; September 20, 2001; >.

2. Transcript of President George W. Bush. Remarks on United States financial sanctions against terrorists and their supporters and an exchange with reporters. September 24, 2001; Available at: < http://www.presidency.ucsb.edu/ws/index.php?pid=64040#axzz1WRxfaFna; September 24, 2001; >.

3. National Commission on Terrorist Attacks on the United States. Monograph on Terrorism Financing. Washington, DC: Government Printing Office; 2004; Available at: < http://www.9-11commission.gov/staff_statements/911_TerrFin_Monograph.pdf>; 2004; >.

4. United Nations Treaty Collection. <http://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=XVIII-11&chapter=18&lang=en>.

5. Text of the International Convention for the Suppression of the Financing of Terrorism is available at: <http://treaties.un.org/Pages/DB.aspx?path=DB/studies/page2_en.xml&menu=MTDSG>.

6. United States Government Accountability Office. “Terrorist financing” testimony before the Committee on Financial Services, Subcommittee on Oversight and Investigations, House of Representatives. April 6, 2006; Available at: < http://www.gao.gov/new.items/d0619.pdf; April 6, 2006; >.

7. Donohue LK. Anti-terrorist finance in the United Kingdom and United States. Available at: < http://students.law.umich.edu/mjil/article-pdfs/v27n2-donohue.pdf; >.

8. Terrorist Financing: Report of an Independent Task Force. February 2009; Available at: < http://www.fatf-gafi.org/dataoecd/28/43/40285899.pdf; February 2009; >.

9. Terrorist Financing. Report of an Independent Task Force sponsored by the Council on Foreign Relations. New York: Council on Foreign Relations; October 2002; Available at: <http://www.cfr.org/publication/5080/terrorist_financing.html?breadcrumb=%2Fpublication%2Fpublication_list%3Fgroupby%3D3%26type%3Dtask_force_report%26filter%3D2002>.

10. Whitlock C. Al-Qaeda masters terrorism on the cheap. Washington Post Foreign Service August 24, 2008; Available at: < http://www.washingtonpost.com/wp-dyn/content/article/2008/08/23/AR2008082301962.html; August 24, 2008; >.

11. Rice-Oxley M. Why terror financing is so tough to track down. Available at: < http://www.csmonitor.com/2006/0308/p04s01-woeu.html; >.

12. Council on Foreign Relations. Profile: Osama bin Laden. Available at: < http://www.cfr.org/publication/9951/profile.html; >.

13. Beyer L. The most wanted man in the world. Available at: < http://www.time.com/time/magazine/article/0,9171,1000871,00.html; >.

14. The Jihad Fixation, cited in R. Gunaratna, Inside al Qaeda: Global Network of Terror.

15. Gunaratna R. Inside al Qaeda: Global Network of Terror. Columbia University Press 2002.

16. Cronin AK. Foreign terrorist organizations, CRS Report for Congress. February 6, 2004; Available at: < www.fas.org/irp/crs/RL32223.pdf; February 6, 2004; >.

17. Koker T, Yordan CL. Microfinancing terrorism: a study in al Qaeda financing strategy. Available at: < http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1287241; >.

18. National Commission on Terrorist Attacks Upon the United States, Overview of the enemy, Staff Statement No 15. Available at: < http://www.9-11commission.gov/staff_statements/staff_statement_15.pdf; >.

19. World Islamic Front Statement. Jihad against Jews and Crusaders. February 23, 1998; Available at: < http://www.fas.org/irp/world/para/docs/980223-fatwa.htm; February 23, 1998; >.

20. Watson DL. The terrorist threat confronting the United States, Congressional Testimony before the Senate Select Committee on Intelligence. Federal Bureau of Investigation Frebruary 6, 2002; Available at: < http://www.fbi.gov/news/testimony/the-terrorist-threat-confronting-the-united-states; Frebruary 6, 2002; >.

21. Abuza Z. Funding terrorism in Southeast Asia: The financial network of Al-Qaeda and Jemaah Islamiyah. Contemp Southeast Asia. 2003;23(2):169–199.

22. Bergen P. Holy War, Inc.: Inside the Secret World of Osama bin Laden. New York: Simon & Schuster; 2002.

23. BBC News Hambali. Asia’s Bin Laden. Wednesday, September 6, 2006; Available at: < http://news.bbc.co.uk/2/hi/asia-pacific/2346225.stm; Wednesday, September 6, 2006; >.

24. The House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence. Report of the Joint Inquiry into the Terrorist Attacks of September 11, 2001. Available at: < http://news.findlaw.com/usatoday/docs/911rpt/part2.pdf; >, July 24, 2003. Cited in Dissertation: “Financing Terror: An Analysis and Simulation for Affecting Al Qaeda’s Financial Infrastructure” by Steve Kiser Pardee, RAND Graduate School.

25. Schmidt S, Farrah D. Al Qaeda’s new leaders: Six militants from ranks to fill void, Washington Post. October 29, 2002; Available at: < http://www.washingtonpost.com/ac2/wp-dyn/A32695-2002Oct28?language=printer; October 29, 2002; >.

26. Coffer Black J. Al-Qaida: The threat to the United States and its allies, Testimony to the House Committee on International Relations. April 1, 2004; Available at: < http://commdocs.house.gov/committees/intlrel/hfa92869.000/hfa92869_0.htm; April 1, 2004; >.

27. L. Napoleoni, Terrorism financing in Europe, in: Giraldo, Trinkunas (Eds.), Terrorist Financing and State Response, Stanford University Press, Stanford, CA.

28. N. Passas, Terrorism financing: Mechanisms and policy dilemmas, in: Giraldo, Trinkunas (Eds.), Terrorist Financing and State Response, Stanford University Press, Stanford, CA.

29. Wassef K. Recession tough for Al Qaeda, too?. June 10, 2009; Available at: < http://www.cbsnews.com/8301-503543_162-5076823-503543.html; June 10, 2009; >.

30. Corera G. Al-Qaeda ‘faces funding crisis’, BBC News. October 13, 2009; Available at: < http://news.bbc.co.uk/2/hi/8303978.stm; October 13, 2009; >.

31. Maclean W. Al-Qaeda’s money trouble, Reuters. June 15, 2009.

32. Lee R. Terrorist financing: The US and international response, Congressional Research Service. December 6, 2002; Available at: < www.law.umaryland.edu/marshall/./RL31658_12062002.pdf; December 6, 2002; >.

33. Levitt MA. Hearing on “The role of charities and NGOs in the financing of terrorist activities,” Subcommittee on International Trade and Finance. Available at: < http://banking.senate.gov/02_08hrg/080102/levitt.htm; >.

34. Fox News. Al Qaeda financing documents turn up in Bosnia raid. February 19, 2003; Available at: < http://www.foxnews.com/story/0,2933,78937,00.html; February 19, 2003; >.

35. Levey SA. Loss of moneyman a big blow for al-Qaeda. June 6, 2010; Available at: < http://www.washingtonpost.com/wp-dyn/content/article/2010/06/04/AR2010060404271.html; June 6, 2010; >.

36. Blanchard CM, Prados AB. Saudi Arabia: Terrorist financing issues. CRS Report for Congress December 8, 2004; Available at: < www.fas.org/sgp/crs/terror/RL32499.pdf; December 8, 2004; >.

37. Department of the Treasury. Additional background information on charities designated under executive order 13224. Available at: < http://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/protecting-charities_execorder_13224-p.aspx#w; >.

38. Comras V. Al Qaeda finances and funding to affiliated groups, Strategic Insights IV (1). 2005; Available at: < http://www.apgml.org/frameworks/docs/7/Al%20Qaeda%20Financing_%20V%20Comras_Jan05.pdf; 2005; >.

39. Trial Transcripts of the United States of America v. Usama bin Laden et al., Day 8. Available at: <http://cryptome.org/usa-v-ubl-08.htm>, February 21, 2001.

40. Epstein M, Schmidt B. Operation support-system shutdown, National Review, Online. September 4, 2003; Available at: < http://www.investigativeproject.org/170/operation-support-system-shutdown; September 4, 2003; >.

41. Lormel DM. Financing patterns associated with Al Qaeda and global terrorist networks. Federal Bureau of Investigation February 12, 2002; Available at: < http://www.fbi.gov/news/testimony/financing-patterns-associated-with-al-qaeda-and-global-terrorist-networks; February 12, 2002; >.

42. Miller J, Gerth J. A nation challenged: Al Qaeda; Honey trade said to provide funds and cover to bin Laden. New York Times October 11, 2001; Available at: < http://www.nytimes.com/2001/10/11/world/nation-challenged-al-qaeda-honey-trade-said-provide-funds-cover-bin-laden.html?sec=&spon=&pagewanted=print; October 11, 2001; >.

43. Security Council. Al-Qaida and Taliban Sanctions Committee approves deletion of two entries from consolidated list. Available at: < http://www.un.org/News/Press/docs//2010/sc9977.doc.htm; >.

44. Frantz D. Threats and responses: Qaeda’s bankrolls; Front companies said to keep financing terrorists. New York Times September 19, 2002; Available at: < http://www.nytimes.com/2002/09/19/world/threats-responses-qaeda-s-bankrolls-front-companies-said-keep-financing.html?sec=&spon=&pagewanted=print; September 19, 2002; >.

45. Rollins J, Sun Wyler L. International terrorism and transnational crime: Security threats, US policy, and considerations for Congress. Congressional Research Service March 18, 2010; Available at: < www.fas.org/sgp/crs/terror/R41004.pdf; March 18, 2010; >.

46. Simon JM. The credit card-terrorism connection: How terrorists use cards for everyday needs and to fund operations. October 11, 2001; Available at: < http://www.creditcards.com/credit-card-news/credit-cards-terrorism-1282.php; October 11, 2001; >.

47. Leppard D. Fraudsters’ bugs transmit credit card details to Pakistan. Sunday Times October 12, 2008; Available at: < http://www.timesonline.co.uk/tol/news/uk/crime/article4926400.ece; October 12, 2008; >.

48. Fox News. Officials: Counterfeit goods fund terrorism. July 16, 2003; Available at: < http://www.foxnews.com/story/0,2933,92094,00.html; July 16, 2003; >.

49. Ungoed-Thomas J. Designer fakes ‘are funding Al-Qaeda’. March 20, 2005; Available at: < http://www.timesonline.co.uk/tol/news/uk/article432410.ece; March 20, 2005; >.

50. Sherwell P. Cocaine, kidnapping and the Al-Qaeda cash squeeze. March 6, 2010; Available at: < http://www.telegraph.co.uk/news/worldnews/africaandindianocean/mali/7386278/Cocaine-kidnapping-and-the-Al-Qaeda-cash-squeeze.html; March 6, 2010; >.

51. News Release. Three Al Qaeda associates arrested on drug and terrorism charges. US Drug Enforcement Administration Press December 18, 2009; Available at: < http://www.justice.gov/dea/pubs/pressrel/pr121809.html; December 18, 2009; >.

52. Farah D. Terror assets hidden in gem-buying spree, Washington Post. Available at: < http://www9.georgetown.edu/faculty/irvinem/CCT510/Sources/washingtonpost-Africans_Al-Qaeda_Diamonds-12-29-02.html; >.

53. Ehrenfeld R. The Saudi buck stops here. Available at: < http://www.acdemocracy.org/viewarticle.cfm?id=202; >.

54. Dodds Frank A, Perez-Rivas M. Bin Laden’s global financial reach detailed. CNN September 26, 2001; Available at: < http://archives.cnn.com/2001/US/09/26/inv.drug.money/index.html; September 26, 2001; >.

55. Aubrey SM. The New Dimension of International Terrorism, vdf Hochschulverlag AG. 2004.

56. US Department of the Treasury. Hawala and alternative remittance systems. Available at: < http://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/Hawala-and-Alternatives.aspx; >.

57. Kiser S. Financing terror: An analysis and simulation for affecting Al Qaeda’s financial infrastructure, Dissertation, Pardee RAND Graduate School. Available at: < http://www.rand.org/pubs/rgs_dissertations/RGSD185.html; >.

58. Farah D. Al Qaeda’s road paved with gold. Washington Post Foreign Service February 17, 2002; Available at: < http://www.library.cornell.edu/colldev/mideast/qdagold.htm; February 17, 2002; >.

59. Ganguly M. A banking system built for terrorism. Friday, October 5, 2001; Available at: < http://www.time.com/time/world/article/0,8599,178227,00.html; Friday, October 5, 2001; >.

60. FATF. Trade based money laundering. June 2006; Available at: < http://www.fincen.gov/news_room/rp/files/fatf_typologies.pdf; June 2006; >.

61. United States Department of State Bureau for International Narcotics and Law Enforcement Affairs. Money laundering and financial crimes, International Narcotics Control Strategy Report (Volume II). February 27, 2009; Available at: < http://www.state.gov/p/inl/rls/nrcrpt/2009/vol2/116537.htm; February 27, 2009; >.

62. International Trade Alert, Inc. Available at: <http://www.internationaltradealert.com/products.asp>.

63. Zdanowicz JS. Trade based money laundering and terrorist financing, Ph.D Dissertation. October 2009; Available at: < http://ciber.fiu.edu/workingpaperseries.php; October 2009; >.

64. Diamond J. Terror funding shifts to cash. USA Today June 18, 2006; Available at: < http://www.usatoday.com/news/washington/2006-06-18-terror-cash_x.htm; June 18, 2006; >.

65. Willman J. Trail of terrorist dollars that spans the world. November 29, 2001; Available at: < http://specials.ft.com/attackonterrorism/FT3RNR3XMUC.html; November 29, 2001; >.

66. Testimony of Douglas Farah. Terrorist responses to improved US financial defenses, before the House Subcommittee on Oversight and Investigations. Committee on Financial Services February 16, 2005; Available at: < http://financialservices.house.gov/media/pdf/021605df.pdf; February 16, 2005; >.

67. Global Witness. For a few dollars more: How Al Qaeda moved into the diamond trade. April 2003; Available at: < http://www.globalpolicy.org/security/issues/diamond/2003/Liberia-GW.pdf; April 2003; >.

68. Verbatim Transcript of Combatant Status Review, Tribunal Hearing for ISN 10024. Available at: <www.defense.gov/news/transcript_isn10024.pdf>.

69. Joscelyn T. On the death of Mustafa Abu Yazid: The top terrorist’s career dispels some myths about our enemies, Weekly Standard. Jun 1, 2010; Available at: < http://www.weeklystandard.com/blogs/death-mustafa-abu-yazid; Jun 1, 2010; >.

70. BBC News. Profile: Omar al-Faruq. 2006; Available at: < http://news.bbc.co.uk/2/hi/middle_east/5379604.stm; 2006; >.

71. GAO Report to Congressional Requesters. Terrorist financing: US agencies should systematically assess terrorists’ use of alternative financing mechanisms. November 2003; Available at: < http://www.gao.gov/new.items/d04163.pdf; November 2003; >.