Money Laundering Bulletin
1) Detailed lists of terrorist groups and financiers have been published by the Counter Extremism Project and Intelligence Online.
The five month-long diplomatic and commercial dispute between Qatar and the so-called ‘anti-terror quartet - ATQ’ of Saudi Arabia, the Saudi Arabia, Bahrain, the United Arab Emirates (UAE) and Egypt - revolves around Doha’s alleged financial support for terrorist groups. Evidence of such financing has been drawn up by both sides, with Qatar claiming its opponents have pushed money into the hands of terror groups. But as the Gulf impasse persists, it is Qatar that’s under the spotlight reports Paul Cochrane from Beirut.
The ATQ cut diplomatic, transport and trade ties with Qatar in June (2017), accusing the small, yet incredibly wealthy, Gulf state of financing terrorism. While Doha denies the accusations, there are strong grounds for the Q uartet’s claims, say analysts.
“The ATQ has assembled many files and other evidence of Qatari support for terror groups, ranging from the Muslim Brotherhood and affiliates to Al Qaeda, as well as Iran as a state sponsor of terror,” said Dr Theodore Karasik, a senior advisor to Gulf State Analytics, a Washington DC-based consultancy. (1)
The ATQ has also complained that Qatar hosts the Afghanistan Taliban, which operates an office in Doha, although Qatari’s special envoy on counterterrorism Mutlaq Al Qahtani has said this had been requested by the US government to promote dialogue and hopefully peace with the government in Kabul. Qatar has also been criticised by the quartet for hosting senior officials from Palestinian organisation Hamas, which runs the Gaza Strip. The four governments also level serious accusations at Qatar that it has helped finance the Islamic State (ISIS) and Syrian rebel groups, such as the Al Nusra Front (now rebranded as Jabhat Fateh al-Sham), a jihadist group likened to Al Qaeda.
In July (2017), Egyptian intelligence said it had prepared a ‘black book’ that compiled evidence from the four ATQ allies to be provided to US, German, French and British intelligence to substantiate these claims, noted Jonathan Schanzer, senior vice president at the Foundation for the Defence of Democracies (FDD) in Washington DC, and a former terrorism analyst at the US treasury department. This was also noted in a report by intelligence sector journal Intelligence Online released in July. (2). However, the black book has not been released. Meanwhile there has not been any new or fresh information published over the past five months, according to Schanzer: “I’ve seen a bit of what Egypt has. It’s what you’d expect: what we know. I think Qatar’s record speaks for itself, and the radicals that live within the country have remained consistent give or take an expulsion here or there to ease some pressure,” he said. Schanzer added that the only new evidence from Egypt that has surfaced concerns Qatar’s support for Islamic extremists in Libya such as the Rafallah al-Sahati Companies, Benghazi Defense Brigades and the Libyan Islamic Fighting Group.
According to Karasik, there is a lot more material that can be brought to light. But there is speculation that because of accusations that ATQ members, specifically Saudi Arabia and the UAE, are themselves conduits for terrorist financing, the material has not been publicised over fears that their dirty laundry would be exposed. “The response of the Qataris and their supporters will probably feature more dirt on ATQ members, so this ‘infowar’ is set to escalate,” said Karasik.
The stand-off between the ATQ and Qatar has led to a split in the Middle East, with the ATQ blacklisting some 30 groups such as the Qatar Volunteer Centre, Qatar Charity, Hizbullah Bahrain and Saraya Defend Benghazi in Libya. Qatar, fot its part, has sided with Turkey in supporting the Muslim Brotherhood, the now outlawed former governing party in Egypt.
“Over the last two or three years the Quartet has a new commonly found belief about which groups should or not be supported, and are trying to draw a line. Qatar has found itself on the other side of that line,” said Dr David Roberts, a Qatar specialist and lecturer in the defence studies department of King’s College London.
He added that Qatar has been lax in cracking down on terrorist financing over the past decade. “A nagging question is why have they been so slow? It is not necessarily nefarious, but if you don’t crack down you open yourself up to criticism.”
For instance, Qatar has not updated its anti-terrorism law since 2004. This changed in July 2017, with Qatar amending the law to include setting clearer rules for defining acts of terrorism, and the freezing of funding and terrorism financing.
Qatar has responded to the ATQ’s accusations by denying them and refusing to capitulate to the Quartet’s initial 13-point demands to curb terrorism, later reduced to six principles (3).
These are a commitment to combat extremism and terrorism in all its forms and to prevent their financing or the provision of safe havens; prohibiting all acts of incitement and all forms of expression which spread, incite, promote or justify hatred and violence; full commitment to the Riyadh Agreement 2013 and the supplementary agreement and its executive mechanism for 2014 within the framework of the GCC (3); a commitment to all the outcomes of the Arab-Islamic-US Summit held in Riyadh in May 2017 (4); to refrain from interfering in the internal affairs of States and from supporting illegal entities; and abiding by a responsibility to confront all forms of extremism and terrorism as a threat to international peace and security.
The ATQ has also requested that the UN Security Council issues a new resolution to impose sanctions on Qatar for being in violation of Resolutions 1373 and 2133, on countering the financing of terrorism. The resolution has not been forthcoming, nor have additional measures the ATQ announced against Qatar for not acting against the ATQ-blacklisted organisations, such as the Muslim Brotherhood and Hamas.
In response, Qatar signed a memorandum of understanding with the US in July to improve its combating the financing of terrorism (CFT) regime and work more closely with Washington. “Qatar is playing catch-up to limit damage. It has been quietly working with the US Treasury for quite a while, and is now belatedly speaking out about it,” said Roberts.
According to Karasik, the US Treasury has sent additional personnel to Doha to improve its oversight, while Qatar has hired the US-based Financial Integrity Network (FIN), which is staffed by former senior US Treasury officials like Daniel Glaser, Juan Zarate and Chip Poncy. (The state-run Rule of Law and Anti Corruption Centre in Doha, and FIN did not reply to interview requests on this subject from MLB).
The Quartet has also bolstered its CFT efforts by increasing law enforcement efforts to crack down on terrorist financing, aware of accusations of hypocrisy for targeting Qatar over terrorist financing while having their own shortcomings.
“This US-Qatari move is being done simultaneously from Washington’s perspective with all the Gulf states because there are citizens who still support terrorist groups. The ATQ has done a very good job at shutting down and closing financial flows to such groups. The ATQ wants Qatar to follow their lead, so the US is desperately working to bring Qatar in-line,” said Karasik.
The US, however, has been inconsistent on Qatar. (5) The State Department has tried to reconcile the opposing camps while the White House has backed Saudi Arabia, noted Schanzer. As a result, it is unlikely that the US’s Office of Foreign Assets Control (OFAC), the Financial Crimes Enforcement Network (FinCEN), or the OECD’s Financial Action Task Force (FATF) will alter its approach to Qatar, he added.
“The lack of consensus within the US government is a de facto greenlight for the ATQ to continue its blockade. Every day this continues, it doesn’t necessarily reflect wonderfully on the UAE and Saudi Arabia, but it certainly does reflect poorly on Qatar, and maintains the spotlight on them more than anyone else,” said Schanzer.
3) Indicative of the inconsistent US approach is that in June (2017), US Ambassador to the United Nations, Nikki Haley said Qatar was funding Hamas. In October, she stated otherwise. "While the Qatari government does not fund Hamas, it does allow Hamas political representatives to be based in Qatar... Qatar has committed to take action against terrorist financing, including shutting down Hamas bank accounts," Haley wrote in a memo to the USA House of Representatives Committee on Foreign Affairs.