The United States and its anti-terrorism allies launched raids and other actions yesterday to shut down al-Barakaat and al-Taqwa financial networks. U.S. officials said the networks help fund al-Qaeda, the terrorist organization run by Osama bin Laden, suspected mastermind of the Sept. 11 terrorist attacks on the United States.

U.S. Customs and the FBI seized records and arrested one man yesterday during several raids in five states as authorities blocked the assets of 62 organizations and individuals allegedly associated with the two networks. 

U.S. Treasury Secretary Paul O’Neill said more raids would follow and another 962 accounts in the United States were under investigation.

“Today’s action interrupts al-Qaeda’s communications.  It blocks an important source of funds.  It provides us with valuable information and sends a clear message to global financial institutions: You are with us, or you’re with the terrorists.  And if you’re with the terrorists, you will face the consequences,” U.S. President George W. Bush said yesterday.

International Efforts

Several countries joined U.S. efforts to crack down on the two networks.  Swiss police detained two financiers suspected of associations with al-Qaeda for six hours of questioning.  The Group of Eight countries and the United Arab Emirates froze the networks’ assets in their countries.  Police in Liechtenstein, Austria, the Netherlands, Italy and Switzerland raided the networks’ offices and, in some cases, seized documents and property.

Serious Blow to al-Qaeda

U.S. officials said the operation struck a serious blow to al-Qaeda’s finances, although they declined to offer much evidence, saying information was mostly classified.  Officials said al-Barakaat was one of al-Qaeda’s major funding channels and has moved tens of millions of dollars a year for al-Qaeda.  Al-Barakaat is a hawala financial system, a traditional method of transferring money that involves few records.  Officials have said that although hawala often makes legitimate transfers, its informal nature makes it an easy tool for terrorists.  New U.S. anti-terrorism legislation passed last month (see GSN, Oct. 26) requires hawalas to register with the U.S. Treasury Department and to report suspicious activities. 

Al-Barakaat has been involved in several legitimate businesses that provided a front for its financial transfers to terrorists, Treasury officials said.  It was founded in 1989 by Ahmed Nur Ali Jim’ale—who the United States suspects is a bin Laden associate—and is based in the United Arab Emirates, U.S. officials said.  Al-Taqwa is a smaller association of banks based in Switzerland that provides investment advice to al-Qaeda members, the officials said (Milbank/Day, Washington Post, Nov. 8).

Ali Jim’ale, who lives in Dubai, denied all charges against al-Barakaat today (Ward Pincus, Associated Press/RealCities.com, Nov. 8).

U.S. Arrest

Authorities in Boston took Mohamed Hussein into custody on charges of running an illegal financial business.  Liban Hussein was also charged but was in Canada.  He told the Toronto Star he was innocent.

Obstacles

The two networks are not the only funding routes for al-Qaeda.  The Treasury Department said last month it believed three honey-related businesses in Yemen were secretly moving money to the organization.  Other officials said al-Qaeda might be profiting from the illegal diamond trade in Africa and the opium trade in Afghanistan. 

Members of Congress called for more international cooperation to fight terrorist financing.  “What we really need is a system that operates relatively seamlessly where all of the countries cooperate in the course of an investigation.  And of course it doesn’t work that way.  It’s all tangled up in questions of sovereignty,” said Jack Blum, former special counsel to the Senate Foreign Relations Committee (Sharon Theimer, Associated Press/RealCities.com, Nov. 8).

Britain Freezes Accounts

Britain announced today it had frozen $10.3 million of suspected terrorist assets in the last week for a total of almost $102 million frozen in the United Kingdom.  Financial institutions had been ordered to freeze the funds of 46 organizations and 16 individuals linked to al-Qaeda, British officials said (Reuters, Nov. 8).

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