February 20, 2002
Spotlight on al Qaeda's Use of Gold
On. Feb 17, The Washington Post published a detailed account of how the al Qaeda terrorist network and the Taliban used gold bullion to scatter funds throughout the world after the U.S. attack on Afghanistan began in October, 2001. The money was secretly moved from Afghanistan to Pakistan, where it was transferred to Dubai, United Arab Emirates, often using the so-called halawa network, an untraceable money transfer system widely used in the Middle East, North Africa and Asia, the Post reported.
Once the money was in Dubai, it was converted to gold bullion and scattered throughout the world, some of it ending up in the United States, the paper reported. "Gold has allowed the Taliban and bin Laden to largely preserve their financial resources, despite the military attack that battered their forces in Afghanistan," wrote Douglas Farah, who confirmed this information through investigators and intelligence sources.
Despite allegations al Qaeda used diamonds, tanzanite and other commodities to raise and launder money, gold plays a unique role because it is a global currency. In some nations where local and foreign currencies are not trusted, including Afghanistan, gold retains its value. The article also alleges that al Qaeda smuggled gold into India and Pakistan to raise money for its efforts.
Dubai, also named in the tanzanite controversy as a center for terrorist money laundering, has one of the largest and least regulated gold markets in the world, the Post reported. Investigators said they believe much of the $500,000 used to fund the Sept. 11 attacks came through Dubai, a financial hub for Islamic militant groups.
Customs officials looking at terrorist financing told the Post the agency is scrutinizing movements of gold by several Dubai companies including ARY Gold, one of the area's largest gold bullion dealers. ARY Gold also owns three of Dubai's largest gold jewelry stores. The company denies any link to al Qaeda or the Taliban.
The U.S. is also investigating the secret financial network that converts al Qaeda gold to cash. Many say the network is operated by the same people who worked for Bank of Credit and Commerce International, which was used during the 1980s to harbor terrorist funds and buy illegal weapons. BCCI's collapse in 1991 was a global financial scandal. The bank specialized in commodities such as diamonds and gold, and was used by the Central Intelligence Agency to funnel money to fighters battling the Soviet occupation of Afghanistan in the 1980s.
Since Sept. 11, the United Arab Emirates have been much more cooperative with them on tracing suspect finances, U.S. officials told the Post. Last month, UAE enacted the most stringent money laundering laws in the region. Still, investigations by the U.S. are in the early stages and it's still unclear how gold is used by the halawa system or how much money is moved through these secret networks, said experts.
by Peggy Jo Donahue