By Blanche, Ed
The Middle East
United States--International relations
Middle East--Politics and government
United States Foreign Relations--Middle East
Bank Deposits--Military Aspects
Banking Industry--International Aspects
Bin Laden, Osama--Finance
Osama bin Laden has been called "the Ford Foundation of terrorists", for his funding of operations such as the suicide attacks in the United States, the US embassy bombings in East Africa and the attempted millennium bombings in Jordan and western Europe, from a global financial network that embraces both clandestine and legitimate means.
According to US security officials, Bin Laden has operatives in 63 countries who form part of a global financial network with thousands of accounts.
But the worldwide crackdown launched by the US following the 11 September suicide hijackings, to choke off the core of his operations, the money pipeline from Bin Laden's business interests to his loose-knit terrorist network, is likely to prove infinitely more difficult than running the elusive Saudi Arabian-born renegade and his key associates to ground. Over the years, Bin Laden, using the millions of dollars he inherited from his construction magnate father, has built up an intricate financial empire that is so diffuse, and concealed behind so many front companies and multi-layered cut-outs, that US investigators who began targeting it after the East Africa bombings in August 1998 found it almost as impossible to penetrate as Bin Laden's underground cells.
The Bush administration's intensified effort, armed with sweeping new powers and the support of dozens of countries and international organisations around the world, may have better luck after many years of inertia in tackling the problem of financial crime.
Global financial centres such as New York, London, Frankfurt and Milan have frozen around $100 million in assets allegedly tied to Bin Laden, since 11 September and investigations are currently underway elsewhere. In November, the 183 members of the International Monetary Fund (IMF) pledged to join the campaign to freeze terrorist assets. But, according to financial experts, the US and its allies still face many years of painstaking detective work to crack his murky trans-national web. And even as they inch their way through the maze, Bin Laden and his financial chieftains are undoubtedly shifting their assets around to create new networks that will elude them.
This is particularly true in the Middle East, the source of much of Bin Laden's funding and a region where, according to a senior official of the Financial Crime Enforcement Network (FinCen), a branch of the US Treasury, "probably no area in the world has fewer records for money-laundering reporting and financial investigative capacity".
The poorly regulated banking systems in certain parts of the Islamic world, and the informal, paperless system known as hawala, which is entirely unregulated, provides Bin Laden and others like him with access to a network that moves around vast amounts of cash with relative ease and secrecy.
"Money is like water," says one financial expert, "it just flows to countries or areas where the regulation is lax. It's very difficult to put a finger on it. When you move outside regulated banks, that's got to be darn near impossible to track."
Investigators admit that the virtually invisible hawala system -- the word is Hindi for "in trust" -- has been one of the major stumbling blocks in their so far vain quest to find a way into Bin Laden's financial dealings. This system, which operates primarily in the Middle East and parts of Asia, acts as an unlicenced bank, moving what authorities estimate is billions of dollars a year, around in a deceptively simple manner.
It works like this: someone who wants to send money to someone else in another country simply approaches a hawala operator in a bazaar, where the dealers are known by word-of-mouth, hands over the amount he wants to transfer and says who it's to go to. They agree on a one-time identity number or a password and the dealer contacts his colleague at the other end telling him to pay out the money to whoever approaches him with the number or password. …