17/10/2003
Al-Qaida, Taliban Money Laundering 'More Sophisticated'

Financial transactions of Al-Qaida and the Taliban have become more "sophisticated" to avoid detection, sometimes involving the use of a centuries-old system, according to the head of the United Nations Security Council's committee overseeing sanctions against the two groups.

Ambassador Heraldo Muñoz of Chile, Chairman of the Council's sanction committee on Al-Qaida and the Taliban, told reporters in a press briefing this week in Kabul that he had met with several high-ranking Afghans in his mission to enforce sanctions, and that he would report his findings to UN Secretary-General Kofi Annan.

Asked about reports that the Taliban were being funded by drug sales, Ambassador Muñoz said, "The information that we have right now, and it is perhaps more hypothesis than very strong information, is that this money may come from drugs, from the increase in the drug trade and that many of these commanders of the Taliban that are operating are in fact cashing in drugs for weapons. So there is a strong suspicion of a link between drug trafficking and the increase in Taliban activities.

"One cannot discount, however, that money may come from some Middle Eastern countries and one of the most important issues of our committee is precisely to detect the money trail and the transfers of money which has become more sophisticated because we have frozen the economic resources of many organizations so that Al-Qaida, in particular, has transferred the money in different ways. In other words, they have become flexible and have adapted to our sanctions and now they are using couriers, for example," he added.

"They are using the most direct banking traditions, the hawala for example," he said. The hawala system allows the transfer of money through promises or chits, with minimal movement of cash. It is thought to have originated in India before the advent of banking systems.

Ambassador Muñoz said, "What happens now is that the hierarchical structure of Al-Qaida has shifted. Increasingly it is less hierarchical and more horizontal. Their units have more autonomy to gain access to funding and weaponry so that although there is a hierarchy still, there is more of an autonomy that makes detection more difficult. This is something that we are going to have to deal with."