KUWAIT CITY, 19 January 2004 — A senior US Treasury Department official urged Gulf states yesterday to continue their close monitoring of Islamic charities to prevent their funds from reaching terror groups.
“Cooperation of the Gulf Cooperation Council (GCC) states is essential” in blocking charitable funds reaching the Al-Qaeda network and other terror groups, said Richard Newcomb, director of the Office of Foreign Assets Control.
Addressing the opening session of Kuwait’s first conference on “Combating Money Laundering Operations and Terror Financing,” Newcomb said that funds from several charitable organizations had reached Al-Qaeda in the past. He called for putting “regulatory controls in place” over funds raised and distributed by dozens of charitable organizations across the region.
Newcomb however welcomed the role played by the GCC governments and financial institutions in joining the “global war on terrorism funding.”
Governor of Kuwait Central Bank (CBK), Sheikh Salem Abdul Aziz Al-Sabah, who opened the two-day conference, highlighted Kuwait’s efforts in combating money laundering and terror funding.
He said the emirate issued an anti-money laundering law in 2002, and stepped up monitoring of local banks and money exchange companies through the Financial Intelligence Unit established at CBK.
He later told reporters the United States has not asked Kuwait for “additional measures” regarding controls and monitoring of Islamic charities which are active in the emirate. “The principle is there should be coordination and cooperation in eliminating the misuse and abuse of these societies’” funds, said Sheikh Salem.
“Several cases had been uncovered abroad ... Accordingly, if no close monitoring was put in place to control this issue, these societies will be misused by parties linked to terrorism,” he added.
The conference will study international and Kuwaiti efforts in the fight against financing terrorism.
Kuwait assured a US Treasury Department delegation which visited the emirate last October that it will continue to monitor fund-raising operations closely. The US delegation discussed means to fight terror financing by tracing donations sent abroad and controlling fund-raising operations.
A US official taking part in the conference told AFP that Washington was looking to see GCC states take regulatory actions to impose stricter controls on charity funds sent abroad.
“There should be regulatory controls on methods of moving money abroad, especially by hawala,” he said in a reference to informal overseas money transfers.
The official, who spoke on condition of anonymity, said the damage from hawala was “serious enough” to warrant stricter controls.
He also said that a number of charitable organizations had “played a considerable role in financing Al-Qaeda and other terror groups,” but declined to comment if this was still the case.
As many as 345 societies and individuals have been placed on lists of groups and bodies suspected of funding terrorism, the official said.
Islamic charities in Saudi Arabia and other Gulf states, which make the backbone of Islamic charitable work, denied the allegations, saying Washington has been exploiting post-Sept. 11 events to suppress Islamic welfare groups.
Kuwait, like other Gulf states, has stepped up measures to impose strict controls on assets of local charities run by Islamic organizations.
The CBK has instructed all banks, financial institutions and money exchange firms to comply with a cabinet decree banning the opening of accounts for charities without prior approval from the ministry of social affairs.
