Greater International Pressure Needed to Crack Down on Terror Group LeT: CFT Analyst
Printable Version
(Amit Kumar, ACAMS moneylaundering.com)
U.N. and U.S. sanctions against
the Lashkar-e-Taiba, one of the
largest militant Islamist groups operating in
the world, have done
little to stem its finances, according to Amit
Kumar, the fellow for
Homeland Security and Counterterrorism at the
Center for National
Policy.
The terrorist
organization, which was
responsible for the coordinated November 2008
attacks in Mumbai that
killed 164 people, is still able to fund its
operations through
donations sent through informal hawala
networks, said Kumar. Without
greater international pressure and efforts by
South Asian nations, the
group, known as the LeT, will continue to work
with and fund al-Qaida,
the Taliban and the Haqqani network, he
said.
Kumar, who
is currently co-editing a textbook on
combating the financing of
terrorism (CFT), recently spoke with Managing
Editor Brian Orsak about
the LeT’s funding and recent attempts at
currency counterfeiting. What
follows is an edited transcript of their
conversation.
What is
LeT and why is it
important?
LeT
is a terrorist organization that was set up in
around the early1990s
and it arose out of an organization, Markaz-ud
Dawa-wal-Irshad, which
was helping with the Afghanistan cause during
the Soviet invasion of
Afghanistan in the 1980s. After the Soviets
exited Afghanistan in 1988,
it assumed a more anti-India focus. In roughly
the early 1990s, the
militant arm of that organization was born as
the LeT, or
Lashkar-e-Taiba.
What is
the group’s connection with other terrorist
groups?
There
are reports that Bin Laden had put in some
seed capital to set up the
group and, of course, there is the fact that
Hafeez Saeed, the head of a
charitable social services arm of LeT, and
others in the LeT
organization were involved in the Afghanistan
cause. That’s the moment
the association of LeT with al-Qaida, the
Taliban, the Haqqanis and
other terrorist groups in Pakistan and
Afghanistan really began. After
that, LeT started espousing the cause of
Kashmiri separatism from India.
The connections with al-Qaida and the Taliban
are still as strong as
ever. If you look at reports, [al-Qaida member]
Abu Zubaydah was
arrested in a safe-house of LeT in Afghanistan
in 2002 and the LeT has
given logistical support to Taliban attacks and
Haqqani attacks against
the India embassy in 2008 and 2009. Generally,
I see it as part of one
whole larger terrorist network, allied and
affiliated with
al-Qaida.
Is the group
affiliated with state-related actors, such as
Pakistan’s ISI?
The
perception is that the Pakistani intelligence
agents are providing
guidance to or preparing the leaders for
attacks against India. If you
just take the 2008 Mumbai attacks, when the LeT
killed 166 people,
including six Americans, the training and the
guidance and the
logistical support by the ISI was manifest. The
degree of the support
varies depending on sources and
investigations.
What’s
known about how the Mumbai attacks were
conducted and financed?
As
far as how they were perpetrated, it’s open
knowledge that the 10 LeT
terrorists who were trained in Pakistan and
were handled by ISI,
especially the retired ISI folks, came by sea
to India and killed 166
people, including through the protracted battle
in the Taj Hotel in
Mumbai. Alongside that, there are certain other
activities. For example,
Tahawwur Rana and David Coleman Headley.
Headley is a U.S.-born LeT
terrorist and is of Pakistani origin and Rana
is of Pakistani origin and
a Canadian citizen but a resident of Chicago.
They were involved in
providing reconnaissance of the Mumbai targets.
Both have recently been
sentenced by U.S. courts; Headley for the
Mumbai reconnaissance, and
Rana for providing material support to the LeT
plot in Denmark.
Obviously, other terrorist operators involved
in the 2008 LeT attacks in
Mumbai have been designated by the U.S.
Then there’s Zaki-ur-Rehman
Lakhvi. He’s imprisoned in Pakistan right now
and six of his henchmen
are facing cases in Pakistani courts right now.
It’s alleged that Hafeez
Saeed, the head of [Pakistan-based]
Jamaat-ud-Dawah, which is the
charitable social services arm of LeT, is also
responsible, although
it’s not been proven in a court of law beyond
the U.N. and U.S.
sanctions by [the Office of Foreign Assets
Control].
They’re
financed through different sources. It’s
difficult to separate the
financing of certain attacks from the financing
of the group’s
activities in general. A good deal of LeT’s
financing comes from rich
donors—Pakistani, Kashmiri, Emirate, Qatari,
Saudi Arabian and
Kuwaiti.
What besides
terrorism are these donations used
for?
They
are engaged in a lot of social services, a lot
of charity work. For
example, in 2005, earthquakes in the Pakistani
part of Kashmir—they were
really involved in directing relief and
charitable efforts. They are
pretty popular with the people of Pakistan.
They have ingratiated
themselves with them through all of these
social efforts.
Have the
U.N. and U.S. sanctions effectively restricted
the group’s financing?
In
my view, the U.S. and the U.N. sanctions,
beyond the name-and-shame
deterrent element, have not really impacted the
spigots of finance from
the Gulf, especially, that the LeT has been
used to hogging for the last
almost two decades of its life. That hasn’t
been deterred. Nor have
measures in India and elsewhere really
restricted their
finances.
There
are basically two questions with sanctions.
One is: how effective are
the sanctions? Are the sanctions really
freezing the assets? There
aren’t really any figures on that. The other
is: are the sanctions
really creating an impact and are the sanctions
deterring the financing
of LeT? The answer in both cases is no,
really.
Are the
financiers of LeT using financial institutions
to donate their
money?
There
are two ways of moving these donations.
Obviously, one is the banking
channels. When the Taliban was ruling
Afghanistan, about $100,000 was
ostensibly channeled through HSBC. But they
rely generally on
hawala—informal value transfers—and also cash
couriers. Those are the
two main methods of moving funds from and to
the Gulf and South
Asia.
Are there specific
red flags compliance officers should look for,
or specific steps they should
take?
Know-your-customer
(KYC) and customer due diligence (CDD)
standards are really important.
Suffice it to say that the banks—international
as well as domestic banks
within India, Pakistan and Afghanistan and, of
course, the UAE, Qatar,
Kuwait and Saudi Arabia—need to look at
establishing money laundering
controls and really implementing restrictive
measures to make sure the
banking channels aren’t misused by terrorist
financiers.
The
AML/CFT regimes [in these countries] have to
be really spruced up big
time to bring then to the level of what we see
in the U.S. Despite the
kind of financial controls we have in the U.S.,
we’re still having
problems with HSBC, Standard Chartered, Lloyds
and others but if you
look in South Asia [there needs to be
improvements of] KYC, CDD,
effective asset freezes and the understanding
of terrorist financing
typologies. There’s a kind of paucity of actual
convictions or even
money laundering charges. I think the Indians
are on the right track and
the Pakistanis are trying as far as
establishing all of these measures
but a concerted effort of the public and
private sector is really
needed, from the bank side and the law
enforcement side.
So
there needs to a ratcheting up of pressure
internally in these
countries as well as more pressure from the
international
community?
Absolutely.
India became a member of FATF around
two-and-a-half years ago and it
instituted changes in its money laundering
regime through amendments in
the Unlawful Activities Prevention (Amendment)
Act, 2012, adding a
number of terrorist financing offences. For
example, the counterfeiting
of currency is a now a terrorist financing
offence.
One
of the things LeT, with the ostensible support
of the Pakistani
establishment, is doing is trying to print fake
Indian currency and
transporting it through cash couriers through
Nepal or Bangladesh or
Pakistan into India, according to reports.
That’s been a very important
thing that the Indians have been very concerned
about it for quite a
while. That not only is financing terrorism but
also chips away at the
Indian economy. That’s been another thing that
the AML/CFT people should
be concerned about.
This interview
originally appeared on ACAMS
moneylaundering.com.
