25 Aug 2006: ISS Today: Spotlight on Muslim Charities

25 August 2006: Spotlight on Muslim Charities

 

Once again, with another alleged terrorism plot that has a possible connection to a charity, the question is being asked here, with more urgency: To what extent do Muslim charities-on the surface noble and selfless-mask movements and money for terrorists and extremist groups. (1)

 

In the first days after the arrests of the 22 suspects in an alleged plot to bring down trans-Atlantic flights, Pakistani officials speculated about involvement by Jamaat ud Dawa, a front for an extremist Pakistani group.  They questioned whether donations to earthquake relief for Kashmir last year had been funnelled back to the plotters in the United Kingdom. In addition much speculation centred on a small charity, Crescent Relief, founded by the family of two plot suspects.

 

Charitable organisations are believed to play a role in the financing and operations of terrorist groupings. But with increasing scrutiny since the 9/11 attacks, the role of charities seems to be changing. The freedom to operate by Muslim charities has diminished, and many have been closed down or banned. Underpinning most religious communities is the compulsory giving of a set proportion of one’s wealth to either charity or the ‘church’. In Christianity, this is referred to as tithe, while Muslims call it zakat.  It is important to recognise that there have only been a few instances among all the bona fide charities.

 

The focus on the operations of charitable organisations detracts, however, from the fact that donations to such entities are not the only sources of terrorist financing. Research indicates that the illicit drug trade is the single largest source of terrorists’ income (2).   Afghanistan’s poppy crops, which are responsible for as much as 86% of the world poppy supply, are widely believed to be a major contributor to terrorist coffers. Other sources of terrorist income include assistance from foreign sympathetic states and revenues from legitimate business operations. Sudan and the former Taliban government in Afghanistan are example of what the United States has christened ‘state sponsors of terrorism’.

 

Essentially, the detection of terror funds is difficult due to the size and nature of the transactions involved. Contrary to popular beliefs, mounting an act of terror requires little money and the bank transactions do not have to be complex (methods similar to the detection of money laundering are used for terrorist financing). An examination of the 9/11 hijackers’ finances reveals that individual transactions were small sums below the unusual cash transaction reporting thresholds and amounted to less than half a million US Dollars in total.

 

In studying the funding of 9/11, it was discovered that the hijackers had funnelled monies through charities. This has led to the targeting of Muslim charities by international financial regulations. Thus, some countries flag all charitable funds that obtain international wire transfers or have foreign nationals sitting on their boards. Of course, this ‘all or nothing’ approach has led to the black-listing of many innocent charities.

 

Financial institutions increasingly rely on religious, geographic or ethnic profiling to find criteria to identify instances of terrorist financing. This trend is particularly alarming in the US, where many charities that operate freely in other countries have been banned from accessing financial services. The Palestinian Relief and Development Fund (Interpal) is a point in case. It provides money to poor Palestinians in the West Bank and the Gaza Strip. In 2003, the US Treasury named Interpal a ‘specially designated global terrorist group’ that directly financed Hamas, while the British Charity Commission gave Interpal a clean bill of health. This perhaps reflects a disagreement about where charity ends and extremism begins…

 

With regards to the recent terror plot, perhaps the question of whether charities mask the funding of terrorism is misaddressed. If mounting a terrorist operation is an inexpensive endeavour, should we not ask why such terror plots are mounted in the first place?

 

Annette Hübschle, Organised Crime and Money Laundering Programme, ISS Cape Town

1. "Terrorism plot raises concern about Islamic charities”, The International Herald Tribune, 24 August 2006, http://www.iht.com/articles/2006/08/24/news/charity.php

2. Council of Foreign Relations, “Tracking down terrorist financing”, http://www.cfr.org/publication/10356/tracking_down_terrorist_financing.html