Global Policy Forum

By Colum Lynch

A global campaign to block Al Qaeda's access to money has stalled in recent months, enabling the terrorist network to obtain a fresh infusion of tens of millions of dollars to finance violent attacks against the United States and other Western governments, according to a draft UN report that is expected to be released next week.

In the months immediately following the Sept. 11 attacks, the United States and other UN members moved decisively to shut down Al Qaeda's financial network, freezing more than $112 million in assets belonging to suspected members and supporters of the terrorist organization.

But only $10 million in additional funds have been blocked over the past eight months, according to the 43-page report, written by a UN panel responsible for monitoring enforcement of an arms, travel and financial embargo against Al Qaeda and its associates.

Al Qaeda continues to draw on funds from Osama bin Laden's personal inheritance, investments and a number of charitable organizations, according to the report. Financial backers in North Africa, the Middle East and Asia manage at least $30 million in investments for the organization in those regions, according to the panel. Private donations to Al Qaeda, estimated at $16 million a year, are believed to "continue, largely unabated."

"Al Qaeda is by all accounts 'fit and well' and poised to strike again at its leisure," according to the report. "The prime targets of the organization are likely to be persons and property of the United States of America and its allies in the fight against Al Qaeda, as well as Israel."

The UN panel said that the task of blocking Al Qaeda's funds had been complicated by the group's decision to shift its assets into precious metals and gems, and to transfer its money through an informal money-exchange network, known as hawalas, that is virtually impossible to trace.

But it has also been hampered by lax border controls in several European countries, known as the Schengen Area group, that allow travelers to cross their borders with a single visa, and "stringent evidentiary standards" required by European governments before they will seize an individual's assets.

The report said that the Schengen Information System, a computer program used to monitor border crossings, has placed only 40 of the 219 names on the UN list on its data base. Several members of the Schengen group said their "national laws precluded them from placing" their citizens on "national watch lists without appropriate judicial basis."

European governments have also faced legal challenges by their own nationals who claim they have been denied their rights, enshrined in the Council of Europe's Human Rights Charter, to a trial before being punished. They have also expressed concern that Security Council's procedures for placing individuals on the sanctions list contain none of the legal safeguards required by their own courts for freezing assets.

The UN panel also warned that the refusal of key European countries to fully comply with the Security Council's sanctions could have a "derogatory impact" on the international effort to shut down Al Qaeda's financial operations.

"Several states have indicated that they are facing legal challenges to the blocking of assets," the report says. They have also cited humanitarian concerns and a dearth of evidence linking suspects to terrorist activities.

Luxembourg told the UN sanctions monitors that they recently released the assets of an unidentified organization allegedly linked to Al Barakaat, a Somali-based money-exchange company used by Al Qaeda to move its funds, because the country's banking regulatory agency "did not have access to releasable intelligence information related to the case." The government had previously frozen the group's assets.

Switzerland has "indicated that is has released small amounts of money from frozen accounts for personal and business expenses where account holders have demonstrated hardship." And Germany has signaled that it may face "legal constraints" to blocking the assets of individuals being pursued by the United Nations.

"German authorities are closely cooperating with the monitoring group to reach full implementation of the UN Security Council sanctions," said Dirk Rotenberg, a spokesman for the German mission to the United Nations. But he said that any action must conform with Germany's legal system and the rule of law.

The panel also complained that scores of individuals who have been linked to Al Qaeda, including its Kuwaiti spokesman, Suleiman Abu Ghaith, have never been placed on the list, making it difficult for governments to freeze their assets. It said that some 38 individuals who have been arrested in 13 countries, including the United States, Italy, Pakistan and Morocco, have not been added to the UN list.

In response to those concerns, the United States and Italy on Wednesday jointly introduced the names of 11 individuals and 14 businesses that are allegedly linked to Al Qaeda.

U.S. officials say that an American proposal to provide a humanitarian exemption to individuals on the list could meet the concerns of some European countries. But they said that they continued to press their European allies to comply with the UN sanctions.

"We are concerned about it and we have raised this issue bilaterally with the Europeans," said a U.S. official. "We have been told that it's not as big a problem as claimed in the report."

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C íŸ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.