The Hon Justice M J Beazley AO, President Of The Court Of Appeal ,State Of NSW, Australia ,said in a speech delivered in 2014, but not widely reported:
She did so in conjunction with the Affinity Intercultural Foundation, the Australian arm of the Fetullah Gulen movement. While Gulen and his followers have been recently victimised by former friend and ally Recep Tayyip Erdoğan, the president of Turkey who they helped install, Gulen and his people are not innocent of jihadi activity.
They are nevertheless quite adapt at recruiting Western "intellectuals" to promote their, cause, Her Honour is only the most recent.There is this other incident :
On April 2, 2018, the Supreme Court denied certiorari in the case of Sokolow v. Palestinian Liberation Organization, wherein the Second Circuit Court of Appeals reversed a jury finding in favor of victims of Palestinian terrorism brought under the Anti-Terrorism Act. The reversal, notably, was not because of any lack of evidence demonstrating that the PLO and Palestinian Authority provided material support for the terrorist acts that cost the lives of the Plaintiffs’ family members, but was based solely on jurisdictional grounds.
Essentially, the Second Circuit held that “[t]here is no basis to conclude that the defendants participated in these acts in the United States or that their liability for these acts resulted from their actions that did occur in the United States.” Without getting too far off topic, while the Court of Appeals was sure to condemn the attacks as “heinous” and acknowledged that “the defendants were liable for tortious activities that occurred outside the United States”, it completed the latter sentence by stating that the terrorist attacks “affected United States citizens only because they were victims of indiscriminate violence that occurred abroad.”
The problem with the Second Circuit’s use of the term “indiscriminate” is that it is in fact antithetical to the fundamental purpose of modern terrorism, as exemplified by these murders committed with the support of the PLO and PA. The crucial intent in such attacks is, as defined by the Anti-Terrorism Act, is to use deadly violence and threats of the same in order to achieve a political objective. The targets are only facially indiscriminate due to the fact that terrorism seeks to feed on the fear of a general public that any and all are potential victims.
With all due respect to the Second Circuit Court of Appeals, which has also issued key decisions against international terrorism, the terrorist murders at issue in this case were calculated and coordinated, anything but ‘indiscriminate.’ Put another way, the Second Circuit conflated specific intents. There was not, and did not need to be, specific intent to murder the specific members of Plaintiffs’ families in these terror attacks. The specific intent was sufficiently demonstrated by the terrorists’ desire to kill as many people as possible, and thereby target crowded public places – emphatically not to kill specific individuals. There remains a fundamental difference between terrorist mass attacks and targeted killings, to say the very least.
Turning back to the jurisdictional basis at issue, the Second Circuit ultimately held that “because the terror attacks in Israel at issue here were not expressly aimed at the United States and because the deaths and injuries suffered by the American plaintiffs in these attacks were “random [and] fortuitous” and because lobbying activities regarding American policy toward Israel are insufficiently “suit-related conduct” to support specific jurisdiction, the Court lacks specific jurisdiction over these defendants.”
The substantive problem with this determination lies in the fact that the Second Circuit relied upon a 2014 Supreme Court decision, Walden v. Fiore, which held that it is “insufficient to rely on a defendant’s “random, fortuitous, or attenuated contacts” or on the “unilateral activity” of a plaintiff.” [Internal citation omitted] However, in that case, the Supreme Court also pointed out that “[t]he Court of Appeals reached a contrary conclusion by shifting the analytical focus from petitioner’s contacts with the forum to his contacts with respondents.”
Here, the Second Circuit appears to have failed to consider two critical factors. First, that the PLO and Palestinian Authority’s presence in the State of New York has always been a crucial part of the function of each entity by virtue of access to the United Nations, not merely “lobbying” as misleadingly stated by the Court. Second, the longstanding practice of the Palestinian Authority to not only praise deceased terrorists as ‘martyrs’ but to also pay their families thereafter has been inextricably tied to official PA pronouncements and strategy alike. Indeed, this practice ultimately resulted in the introduction of the Taylor Force Act, which became law on March 23, 2018 and conditions future aid to the Palestinian Authority on condemning terrorism and ceasing ‘martyrdom’ payments.
One might also point to the unique nature of New York as an international banking center. Indeed, while it does not appear to have raised significant journalistic interest, on March 8th, New York State's Department of Financial Services announced that it had signed a Memorandum of Understanding with the Bank of Israel, in which the State's Superintendent of Financial Services noted that"DFS is pleased to further strengthen our cooperation and work with The Bank of Israel to strengthen protections of our markets and our mutual interest in combatting terrorism.”
Even as concrete measures to fight terrorism and providing material support thereto have passed beneath the headlines, last month, the United States government filed an amicus brief asking the Supreme Court to deny certiorari, to allow the Second Circuit’s decision to stand. Ted Olson, who represents the petitioners, openly questioned “Why won’t the Trump administration defend a key anti-terrorism law?” Others were even more incensed at the apparent betrayal. However, a careful reading of the United States’ amicus brief demonstrates a different calculus entirely.
Almost paradoxically, it was the petitioners urged the Court to treat the Palestinian Authority as analogous to a state, and thereby not subject to due process considerations such as specific or general jurisdiction but instead would have to defend the action using the protections provided by the Foreign Sovereign Immunities Act of 1976, or “FSIA”. The Second Circuit responded that “neither the PLO nor the PA is recognized by the United States as a sovereign state, and the executive’s determination of such a matter is conclusive.” Emphasis added.
In making such a statement, the Second Circuit relied upon the sweeping holding of the Supreme Court in Zivotofsky v. Kerry, 135 S. Ct. 2076 (2015), the latter of two appeals to the Supreme Court in which the Department of State asserted that the power to recognize sovereignty lay solely and effectively absolutely within the discretion of the President. Nearly seven years ago, this author, among others argued “that this claim of exclusive presidential power is not substantiated”, and more recently that my “serious jurisprudential objections to the jurisprudence embodied in the decision, which cannot readily be reconciled with the Constitutional scheme of ensuring that each federal department can exercise some form of control or coercion over the others as a means of averting totalitarianism.”
In this light, the Government’s position that allowing courts to determine whether a foreign entity was a ‘state’ “risks judicial determinations at odds with Presidential determinations underlying recognition” is actually rational and does not need to rely upon the overly sweeping ruling in Zivotofsky that provided the president with a type of “exclusive” power that is glaringly absent from the vast majority of the Constitutional structure.
Ultimately, the Government’s position in this case did not revolve around terrorism or assisting the PLO or PA. Nor is it fundamentally concerned with the jurisdictional and due process concerns that underlie this action. Rather, the current administration is looking – like the preceding administration – to assert its prerogative in the realm of foreign affairs, a prerogative that has been expanded by the Supreme Court to appear virtually impossible to challenge.
It remains a mistake to see the Government’s amicus brief as a betrayal, or at all inconsistent with its public foreign policy actions, which to date have included signing the Taylor Force Act and formal recognition of Israeli sovereignty over Jerusalem, the latter of which seemed impossible a mere two years ago. However, the sweepingly broad deference given to the Executive Branch in the realm of foreign affairs in Zivotofsky is something that any – and it must be surmised, every – administration.
One hundred and sixty years ago, Thomas Carlyle cited Frederick the Great (and/or Napoleon) for the famous proposition that an army travels on its stomach, thereby recognizing the critical role that logistics plays in military operations. A mere 20 years ago, Representative Deborah Pryce stood on the floor of the United States House of Representatives and stated a modern truth about terrorism, that “money is the lifeblood of these ruthless organizations, and if we cut off their flow of funds, including the blocking of financial transactions, we will surely diminish their ability to carry out these cowardly, heinous acts here at home and abroad.”
On that day in April of 1996, the House of Representatives passed the Antiterrorism and Effective Death Penalty Act of 1996 by a vote of 293-133, which sought to build on counterterrorism legislation passed in 1994 by providing the means to counteract terrorism beyond the battlefield of heinous civilian targeting, by imposing criminal and civil liability on those who provided material support that allowed terrorist organizations to commit their violent attacks.
The plain and unambiguous intent of Congress was to ensure that individuals and entities alike who facilitated the financial lifeblood of terrorist organizations either overtly or by merely looking the other way in processing their accounts would themselves be held accountable. Less than a decade ago, the Supreme Court held that “Congress plainly spoke to the necessary mental state for a violation of §2339B [18 U.S.C. §2339B, and it chose knowledge about the organization’s connection to terrorism, not specific intent to further the organization’s terrorist activity.”
And yet, as this author among others has previously noted, neither the text of the statute nor the Supreme Court’s holding has prevented defendants from attempting to rewrite the statute to mean that their intent was to further acts of terrorism per se. In 2011, convicted arms dealer Monzer Al Kassar and two codefendants tried this ploy after their convictions, but the Second Circuit Court of Appeals was not persuaded.
But what about financial institutions in particular? To build on the analogy of money as the lifeblood of terrorism, financial institutions are very much the arteries carrying it along.
Section 2339B includes additional specific provisions for financial institutions, namely that “any financial institution that becomes aware that it has possession of, or control over, any funds in which a foreign terrorist organization, or its agent, has an interest, shall--
(A) retain possession of, or maintain control over, such funds; and
(B) report to the Secretary the existence of such funds in accordance with regulations issued by the Secretary.”
However, holding banking institutions liable proved to be considerably more problematic. Most recently, the Second Circuit Court of Appeals vacated and remanded a major ruling against the Arab Bank, which had “admitted that, during the period relevant to this action, it processed 282 fund transfers, totaling $2,563,275, for relevant foreign terrorist entities and individuals” as well as “transfers totaling approximately $32,000,000 on behalf of purported charities known to funnel money to Hamas”.
This action, Linde v. Arab Bank, was brought by families of people murdered by Hamas terrorists under 18 U.S.C. § 2333(a), which provides a civil remedy for victims of acts of international terrorism. The appellate court held that when the lower court instructed the jury that providing material support itself constituted an act of international terrorism, that it was error on the part of the lower court.
From a legal practitioner’s perspective, the Court’s reasoning makes sense. Courts are reluctant to extend liability, particularly as here where even the Arab Bank’s turning a blind eye to millions of dollars of transactions to Hamas is not the same as being the source of such funding. Still, under other circumstances, the Court’s extremely narrow parsing of the term “act of international terrorism” would merit significant skepticism based not merely on the legislative history, but the jurisprudential canon of in pari materia, namely that similar statutes should be interpreted similarly, unless legislative history or purpose suggests material differences.
However, as the Court noted in its decision, Congress has already acted to close this loophole. The passage of the Justice Against Sponsors of Terrorism Act (JASTA) in 2016 would explicitly include actors like Arab Bank, since the newly enacted section 2333(d)(1) specifically provides that a civil action may be brought “as to any person who aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism.”
Indeed, Congress stated in its bill that the purpose of JASTA “is to provide civil litigants with the broadest possible basis, consistent with the Constitution of the United States, to seek relief against persons, entities, and foreign countries, wherever acting and wherever they may be found, that have provided material support, directly or indirectly, to foreign organizations or persons that engage in terrorist activities against the United States."
While the parties in Linde v. Arab Bank rightfully entered into a settlement agreement that makes further contemplation of that specific case somewhat moot, there is one final part of JASTA that is unusual and important enough to be underscored. JASTA applies to civil claims arising from terrorist acts committed after September 11, 2001, which is to say that it has retroactive effect. The conditional limitation that made it inapplicable to the plaintiffs in Linde was simply that this action was commenced in 2004, and therefore not after JASTA’s enactment as required.
And so, despite the pre-JASTA expectations of many – this author included – Linde v. Arab Bank will almost certainly not turn out to be the seminal decision it might otherwise have been. It will be civil lawsuits brought pursuant to section 2333(a) after September 28, 2016 that will bear close scrutiny.
The high profile Malaysian court case for the murder of North Korea’s Kim Jong Nam saw the magistrate court judge transferring the case to the High Court on Tuesday (May 30), after it was delayed twice due to the prosecution’s request for evidence and document compilation.
The case is now transferred to the Shah Alam High Court in Selangor with the upper court to fix a date for case management before proceeding to trial.
A lawyer representing North Korea was present to watch the brief. Jagjit Singh, was employed by the North Korean embassy to provide legal assistance. “All I do is report to the embassy,” he told reporters
According to news portal Malaysiakini, Jagjit Singh, 75, was appointed by the North Koreans on March 2, shortly after Jong Nam, the half-brother of their leader Kim Jong Un, was murdered at klia2 from what is believed to be the administration of the VX nerve agent directly on his skin.
Speaking to reporters after the case was re-mentioned and transferred to the High Court in Shah Alam today, Jagjit said he had earlier also helped three North Korean suspects in the murder case return to their home country.
“We worked behind the scenes, negotiated with the government for them to send the three back,” Malaysiakini reported him as saying.
The three suspects were chemist Ri Jong Chol, Air Koryo staff Kim Uk Il, and North Korean embassy second secretary Hyong Kwan Song.
The lawyer said he was tasked to protect the embassy’s interests, and to report to the North Korean authorities what transpired in court.
It is clear from the reporting that UK intelligence agencies were well informed of the Manchester suicide bomber Salman Abedi's jihadi activities:
A group of Gaddafi dissidents, who were members of the outlawed Libyan Islamic Fighting Group (LIFG), lived within close proximity to Abedi in Whalley Range.
Among them was Abd al-Baset Azzouz, a father-of-four from Manchester, who left Britain to run a terrorist network in Libya overseen by Ayman al-Zawahiri, Osama bin Laden’s successor as leader of al-Qaeda.
Azzouz, 48, an expert bomb-maker, was accused of running an al-Qaeda network in eastern Libya. The Telegraph reported in 2014 that Azzouz had 200 to 300 militants under his control and was an expert in bomb-making.
Another member of the Libyan community in Manchester, Salah Aboaoba told Channel 4 news in 2011 that he had been fund raising for LIFG while in the city. Aboaoba had claimed he had raised funds at Didsbury mosque, the same mosque attended by Abedi.
The murder of children young as eight, make clear that the authorities are not prepared to face the facts of danger.
The Manchester Arena suicide bomber Salman Abedi had made trips to Libya, Downing Street said last night, as intelligence agencies combed his connections with al-Qaeda and Islamic State in his parents’ homeland.
Salman Abedi, 22, who was reportedly known to the security services, is thought to have returned from Libya as recently as this week.
A school friend told The Times: "He went to Libya three weeks ago and came back recently, like days ago."
Abedi born in Manchester and grew up in tight-knit Libyan community that was known for its strong opposition to Colonel Muammar Gaddafi’s regime.
He had become radicalised recently - it is not entirely clear when - and had worshipped at a local mosque that has, in the past, been accused of fundraising for jihadists.
Abedi’s older brother Ismail had been a tutor at Didsbury mosque’s Koran school. The imam last night said that Salman Abedi, who wore Islamic dress, had shown him “the face of hate” when he gave a talk warning on the dangers of so-called Islamic State.
Born in 1994, the second youngest of four children, Abedi’s parents were Libyan refugees who fled to the UK to escape Gaddafi.
His mother, Samia Tabbal, 50, and father, Ramadan Abedi, a security officer, were both born in Tripoli but appear to have emigrated to London before moving to the Whalley Range area of south Manchester where they had lived for at least a decade.
Abedi went to school locally and then on to Salford University in 2014 where he studied business management before dropping out. His trips to Libya, where it is thought his parents returned in 2011 following Gaddafi’s overthrow, are now subject to scrutiny including links to jihadists.
A group of Gaddafi dissidents, who were members of the outlawed Libyan Islamic Fighting Group (LIFG), lived within close proximity to Abedi in Whalley Range.
We understand that feelings are very raw right now and people are bound to be looking for answers. However, now, more than ever, it is vital that our diverse communities in Greater Manchester stand togetherChief Con Ian Hopkins
Among them was Abd al-Baset Azzouz, a father-of-four from Manchester, who left Britain to run a terrorist network in Libya overseen by Ayman al-Zawahiri, Osama bin Laden’s successor as leader of al-Qaeda.
Azzouz, 48, an expert bomb-maker, was accused of running an al-Qaeda network in eastern Libya. The Telegraph reported in 2014 that Azzouz had 200 to 300 militants under his control and was an expert in bomb-making.
Another member of the Libyan community in Manchester, Salah Aboaoba told Channel 4 news in 2011 that he had been fund raising for LIFG while in the city. Aboaoba had claimed he had raised funds at Didsbury mosque, the same mosque attended by Abedi. The mosque at the time vehemently denied the claim. “This is the first time I’ve heard of the LIFG. I do not know Salah,” a mosque spokesman said at the time.
At the mosque, Mohammed Saeed El-Saeiti, the imam at the Didsbury mosque yesterday branded Abedi an dangerous extremist. “Salman showed me the face of hate after my speech on Isis,” said the imam. “He used to show me the face of hate and I could tell this person does not like me. It’s not a surprise to me.”
Police name suicide bomber as Salman Abedi
02:52
Salman visited the mosque on a number of occasions to pray, but the imam insisted “he was not my friend, he is not close. I could understand that he was not happy with me because I did combat Isis in that Friday sermon sometimes”.
The imam added: “When he passed by me, we Muslims greet each other and you know he is not happy with me if he doesn’t greet you.”
At the Abedi family home in Elsmore Road, a non-descript red-brick terrace, neighbours told how Abedi had become increasingly devout and withdrawn.
Lina Ahmed, 21, said: “They are a Libyan family and they have been acting strangely. A couple of months ago he [Salman] was chanting the first kalma [Islamic prayer] really loudly in the street. He was chanting in Arabic.
“He was saying ‘There is only one God and the prophet Mohammed is his messenger’.’
A family friend, who described the Abedis as “very religious”, said most of the family had returned to Libya, leaving only Salman and his older brother Ismail behind.
“They have not been there for quite a while. Different people come and go,” said Alan Kinsey, 52, a car-delivery driver who lives across the street. Mr Kinsey’s wife, Frances, 48, a care worker, said she believed that the parents had left before Christmas and just one or two young men had been living in the property.
Mr Kinsey said a huge flag, possibly Iraqi or Libyan, had been hanging from their house. “There was a large Iraqi flag hanging out the window but we never thought anything or it,” added Mr Kinsey, “We thought it was about football or a protest at home or something.”
Neighbours woke up to the reality that the quiet young man next door had blown himself up, murdering at least 22 innocent victims.
Police blasted down the door of the family home at 11.30am. According to locals, two helicopters and at least 30 police officers in camouflage, riot gear and shields arrived for the raid.
“The police were very heavily armed. All of them. It was like something out of a war scene,” said Mr Kinsey.
“It was terrifying. About thirty of them arrived in camouflage and riot gear and removed the wooden fence between two properties.
“Then they attached a black strip to the door and there was a loud explosion. The door came off its hinges. The windows were shaking. The whole operation lasted about 90 seconds.
“I didn’t see them leading anyone out of the house. I believe it was empty.”
Malaysia's state controlled English daily The Star has reported that the Indian Muslim preacher Zakir Naik, wanted in India for terrorist activities, has managed to escape an Interpol Red Notice by relying on his newly gained status as a citizen of Saudi Arabia.
Zakir has been living in Malaysia,where despite public protests, Prime Minister Najib Razak has been happy to have him stay as a permanent resident. The Saudi-Malaysian collaboration to protect Zakir against Indian enforcement agencies and terrorism laws throws new light onto the 1MDB theft ,where Najib ,his family and their associates are subject of US Department Of Justice investigation and asset seizures.
Nevertheless, accepting the Saudi and Najib explanation, one then turns to statements made by Malaysia's Deputy PM Zahid Hamidi ,who is also Minister for Home Affairs, who in defending Najib said that the Saudi "donation" was used to support Muslim causes throughout the region.However,many of those causes involve jihadi violence.As previously reported by this writer:
Having previously said that a sum of US$681 million found in Malaysian Prime Minister Najib Razak's personal account was only part of what a Saudi benefactor had provided Muslim groups throughout the region, including Muslim separatists in Thailand and the Philippines who have been waging guerrilla warfare against the majority in those countries, Malaysia's Deputy Prime Minister Ahmad Zahid Hamidi now says that the money was contributed by a number of different donors.
The DOJ says proceeds from the 1MDB theft have been used to acquire assets in the US and UK.Some of those assets have been seized.Given the likelihood of the assets being later used to finance terrorist attacks, it is hard to see how the assets might be returned to anyone who claims them.
Only a short while after writing an article here, The EU proposes to limit virtual currency transactions: but will this help?, I realised that the story was more complex than I had originally described, and indeed points to yet another example of the regulatory confusion from which the European Commission typically suffers. As a result, I have added my analysis of how the Commission's new proposals for fighting terror finance and money laundering, as well as some of its other regulations, may actually cause much more harm than good. The changes are nearly all at the end.
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One of the most popular methods for financial regulators worldwide to try to prevent or restrict terror funding and money laundering is to limit the use of cash in the economy, since it is so difficult to track cash. The EU’s Third Money Laundering Directive (3MLD) requires financial institutions to carry out additional Know Your Customer checks on anyone carrying out transactions of more than 15,000 Euros, and the Fourth Money Laundering Directive, due to come into force later this year, reduces this trigger amount to 10,000 Euros.
There is indeed logic behind these cash limits: although most terror attacks cost far less money to plan and execute than the hundreds of thousands of dollars needed for the 9/11 attack in the United States, buying the arms and ammunitions used in the Bataclan attacks in Paris, and that at Brussels airport, from black-market weapons dealers in Belgium costs real money; and in principle, making it more difficult for terrorists to move large sums of cash -- since of course black-market weapons are purchased either with cash or drugs -- should make these weapons more difficult to obtain. Several years ago, the UK’s Serious and Organised Crime Agency, now rebranded as the National Crime Agency, discovered through detailed intelligence work that criminal and terrorist groups based in the UK were smuggling very large sums of money, in the region of one million Euros at a time, to continental Europe by changing the sterling-denominated proceeds of other crimes into 500-Euro notes, the largest denomination available in Europe, and stuffing as many of them as possible into jumbo-sized breakfast cereal boxes that wouldn’t arouse suspicion at the border. SOCA’s response was to have the Bank of England order banks and foreign exchange businesses to stop using the 500-Euro note, thus cutting off this money laundering channel at a stroke.
Of course, it can be argued that some attacks, like the most recent ones in Nice and Paris last year, basically cost the attackers nothing more than the bus or metro fares to reach the point where they could steal or hijack the trucks they used to mow down their victims. But it’s simply folly to assume that preventing the financial of terrorism can prevent all terrorist activity, the more so since we have barely seen the beginning of cyber terrorism, something that needs no more weapons than the laptop computer or electronic notepad that almost everybody own anyway. But the underlying principle of the EU’s AML Directives, and of similar regulations in other jurisdictions, to make it more difficult for criminals and terrorists to move money around in untraceable cash remains a good one, even though it’s almost impossible to enforce it effectively.
The problem, however, is that it’s not only cash that is basically untraceable. Two years ago, I commented in these pages that the rapid development of modern financial technology, especially the growth of virtual currencies, which are basically designed to be untraceable, perhaps encourages financial crime. And finally, after a completely unreasonable delay, the European Commission has responded to this very real threat by publishing on 23rd January a regulatory impact assessment for ’Proposal for an EU initiative on restrictions on payments in cash’that included proposals to restrict virtual currencies such as Bitcoin, so that the same reporting requirements that apply to cash transactions entering and leaving the EU should also apply to virtual currencies. The proposal very reasonably says: .’In view of the development of cryptocurrencies and the existence of other means of payments ensuring anonymity, an option could be to extend the restrictions to cash payments to all payments ensuring anonymity (cryptocurrencies, payment in kinds, etc.).’
This proposal is certainly well intended, and on first glance ought to be an effective curb on using virtual money to pay for at least the larger terror attacks. But is it likely to work? No more than the restrictions on cash actually work: any half-professional money launderer or terror financier simply splits the money up into as many smaller transactions as are necessary to be well below the reporting limits, and reassembles the total sum at the other end, where it is needed; and so it will be with Bitcoins or whatever other virtual money. And in any case, there is no technical proposal yet for how to actually detect much larger sums in Bitcoins from travelling across the Internet from and to any arbitrary end points, let alone interdict them.
Cyber criminals (including terrorist groups) carrying out ransomware atacks, whether on personal or corporate computers or on more sophisticated and valuable infrastructure systems, almost invariably demand that the ransom the victims have to pay to get back the data that has been encrypted by the malicious software -- sometimes worth a lot more than 15,000 or 10,000 Euros -- should be transferred in Bitcoins, because they are confident that the money will arrive undetected and without any risk of their identities being uncovered. So why does the European Commission imagine that this new regulatory tweak is going to make the slightest difference to the fight against terror finance and money laundering, when what really counts is much better, but inevitably much more demanding, intelligence work?
But the real problem that the Commission has created is this: if a cyber-criminal or -terrorist carries out a ransomware attack on, say, a financial institution or hospital, or a shipping company, and demands a million Euros in Bitcoin, or perhaps much more, as ransom for the restoration of its critical data, or for the renewed functioning of critical computer systems, the proposed new regulatory restriction may make it a criminal offence for the victim to pay the ransom as demanded, in Bitcoin. Is it conceivable that an insurance company will refuse to pay to get back data that may be worth billions, or that a medical centre will refuse to pay to restore critical data that may be necessary to save lives, on the grounds that they would be breaking financial regulations and perhaps risking the imprisonment of a senior executive? (Technically, paying such a ransom could probably be regarded in today's over-regulated world as a money laundering offence to begin with, since it is transferring the proceeds of crime, but the victim organisation would at least have the legal defence of duress.) On top of that, after May 2018, the EU's own General Data Protection Regulation will impose draconic fines for breaches of personal data held by any business, not only resident in the EU but even doing business there: these fines are large enough, up to the larger of 20mn Euro or 4 percent of global turnover, that they could bankrupt many companies. The more or less obvious result is that many cyber attacks will be carried out in order to simply blackmail companies: pay us, or we will release the personal data you hold on your clients, or patients, or whoever.
Yes, it is certainly possible to create some kind of legal process to request permission of the authorities, just as the current Suspicious Activity Report regime makes it possible for law enforcement authorities to permit payment from frozen funds. But since ransomware usually works on the basis that the victime only has 24 or 48 hours to pay up, otherwise the data remains irreversibly encrypted forever, such a process would almost certainly be useless.
The solution to this regulatory minefield might be for the eventual regulations to say explicitly that the payment of ransom, whether for a human kidnap victim or for kidnapped data or systems is not an offence, whether made in Bitcoin, cash or uncut diamonds. But this in itself would constitute a moral hazard, as it would incentivise criminals and terrorists to carry out such attacks. The bottom line is that the European Union, in its enthusiasm to protect society from all kinds of risks and vulnerabilities by creating mountains of regulations, has made the problem worse.
One of the largest and most international banks in the world, Standard Chartered, announced on 30th January that it had appointed Tracey McDermott, the former Acting Chief Executive of the UK Financial Services Agency, to be the bank’s group head of corporate, public and regulatory affairs.
Standard Chartered (STAN:L), although headquartered in London, doesn’t do any retail banking business in the United Kingdom, but is present in 67 countries, especially in the Middle East, Africa and Asia, and has total assets in 2015 of £432bn. Informed sources say that the bank’s management is concerned about the high level of risk from both cyber- and conventional financial crime, which is perhaps natural considering the institution’s geographical base; and so McDermott, who was a highly respected head of enforcement and financial crime at the FSA before becoming acting head of the regulator for nine months until June 2016, is a very logical choice to help manage the bank’s reputational risk.
It isn’t the first time that a major global bank has recruited a top executive from the regulatory world to help ward off regulatory and reputational risk. The much larger HSBC Group (HSBA.L), which is the world’s sixth-largest bank by assets and has branded itself "the world’s local bank," has since 2003 gone through several major scandals over involvement in money laundering, including carrying out financial transfers for Mexican drug cartels, and facilitating tax evasion, and paid $1.9bn in regulatory fines to US authorities as a result. One of its immediate responses to the Mexican drug-trade scandal was to hire former top US Treasury Department official Stuart Levey as chief legal officer, essentially with the responsibility of rebuilding trust in the bank among US and other banking regulators. Levey, who was Treasury’s under secretary for terrorism and financial intelligence from 2004 to 2011, has been a very active advocate of reorganising the way in which banks and governments work together in fighting financial crime amd global terrorism, something which has been substantially hampered by restrictive financial industry regulation, especially around data privacy and sharing of financial crime information across border.
HSBC also appointed to its board of directors in 2013 the former director general of the UK Security Service (MI5), Jonathan Evans, now Baron Evans of Weardale, with responsibilities including membership of the bank’s Conduct and Values Committee. This is much less counter-intuitive than may appear, as the UK’s intelligence services pride themselves on following very demanding ethical standards in spite of the obvious need for deviousness and deceit in their operational activities.
Barclays Bank (BARC.L), yet another London-based top-tier bank, also reinforced itself against both actual and reputational risk two years ago by appointing Troels Oerting as group chief information security officer and group security officer. Oerting, who has had a 35-year career spanning the Danish serious and organised crime squad and the country’s security intelligence service, and then head of both cybercrime and counter-terrorism at Europol, is regarded as a top cybersecurity expert but also as someone with a broad holistic view of risks to the bank’s functioning and its reputation.
In the cases of McDermott and Levey, one can assume that one of the reasons for recruiting them is their intimate knowledge of the processes, politics and personalities of the regulatory agencies and government ministries whose decisions can tip the balance between survival and disgrace for both the institutions themselves and for their top managements.
What’s common to these appointments, however, and presumably many other that will follow at both board and top executive levels in major international banks, is a recognition that former top government officials responsible for intelligence, security and regulatory compliance are a key acquisition if they are to maintain their international reputations and indeed their client base. The global banking industry is not only being threatened by competition from new players but also the usual problems of political events that can destabilise the banks’ business models, as well as, mismanagement and even incompetence. They also face malicious state and non-state actors that through a combination of cyber-attacks and ’conventional financial crime and terrorism can cause them massive regulatory and reputational damage, perhaps with the aim of causing systemic damage at both national and international levels. In the circumstances, recruiting top people from public service is a necessary as well as cost-effective investment.
Only a short while after writing an article here, The EU proposes to limit virtual currency transactions: but will this help?, I realised that the story was more complex than I had originally described, and indeed points to yet another example of the regulatory confusion from which the European Commission typically suffers. As a result, I have added my analysis of how the Commission’s new proposals for fighting terror finance and money laundering, as well as some of its other regulations, may actually cause much more harm than good. The changes are nearly all at the end.
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One of the most popular methods for financial regulators worldwide to try to prevent or restrict terror funding and money laundering is to limit the use of cash in the economy, since it is so difficult to track cash. The EU’s Third Money Laundering Directive (3MLD) requires financial institutions to carry out additional Know Your Customer checks on anyone carrying out transactions of more than 15,000 Euros, and the Fourth Money Laundering Directive, due to come into force later this year, reduces this trigger amount to 10,000 Euros.
There is indeed logic behind these cash limits: although most terror attacks cost far less money to plan and execute than the hundreds of thousands of dollars needed for the 9/11 attack in the United States, buying the arms and ammunitions used in the Bataclan attacks in Paris, and that at Brussels airport, from black-market weapons dealers in Belgium costs real money; and in principle, making it more difficult for terrorists to move large sums of cash -- since of course black-market weapons are purchased either with cash or drugs -- should make these weapons more difficult to obtain. Several years ago, the UK’s Serious and Organised Crime Agency, now rebranded as the National Crime Agency, discovered through detailed intelligence work that criminal and terrorist groups based in the UK were smuggling very large sums of money, in the region of one million Euros at a time, to continental Europe by changing the sterling-denominated proceeds of other crimes into 500-Euro notes, the largest denomination available in Europe, and stuffing as many of them as possible into jumbo-sized breakfast cereal boxes that wouldn’t arouse suspicion at the border. SOCA’s response was to have the Bank of England order banks and foreign exchange businesses to stop using the 500-Euro note, thus cutting off this money laundering channel at a stroke.
Of course, it can be argued that some attacks, like the most recent ones in Nice and Paris last year, basically cost the attackers nothing more than the bus or metro fares to reach the point where they could steal or hijack the trucks they used to mow down their victims. But it’s simply folly to assume that preventing the financial of terrorism can prevent all terrorist activity, the more so since we have barely seen the beginning of cyber terrorism, something that needs no more weapons than the laptop computer or electronic notepad that almost everybody own anyway. But the underlying principle of the EU’s AML Directives, and of similar regulations in other jurisdictions, to make it more difficult for criminals and terrorists to move money around in untraceable cash remains a good one, even though it’s almost impossible to enforce it effectively.
The problem, however, is that it’s not only cash that is basically untraceable. Two years ago, I commented in these pages that the rapid development of modern financial technology, especially the growth of virtual currencies, which are basically designed to be untraceable, perhaps encourages financial crime. And finally, after a completely unreasonable delay, the European Commission has responded to this very real threat by publishing on 23rd January a regulatory impact assessment for ’Proposal for an EU initiative on restrictions on payments in cash’that included proposals to restrict virtual currencies such as Bitcoin, so that the same reporting requirements that apply to cash transactions entering and leaving the EU should also apply to virtual currencies. The proposal very reasonably says: .’In view of the development of cryptocurrencies and the existence of other means of payments ensuring anonymity, an option could be to extend the restrictions to cash payments to all payments ensuring anonymity (cryptocurrencies, payment in kinds, etc.).’
This proposal is certainly well intended, and on first glance ought to be an effective curb on using virtual money to pay for at least the larger terror attacks. But is it likely to work? No more than the restrictions on cash actually work: any half-professional money launderer or terror financier simply splits the money up into as many smaller transactions as are necessary to be well below the reporting limits, and reassembles the total sum at the other end, where it is needed; and so it will be with Bitcoins or whatever other virtual money. And in any case, there is no technical proposal yet for how to actually detect much larger sums in Bitcoins from travelling across the Internet from and to any arbitrary end points, let alone interdict them.
Cyber criminals (including terrorist groups) carrying out ransomware atacks, whether on personal or corporate computers or on more sophisticated and valuable infrastructure systems, almost invariably demand that the ransom the victims have to pay to get back the data that has been encrypted by the malicious software -- sometimes worth a lot more than 15,000 or 10,000 Euros -- should be transferred in Bitcoins, because they are confident that the money will arrive undetected and without any risk of their identities being uncovered. So why does the European Commission imagine that this new regulatory tweak is going to make the slightest difference to the fight against terror finance and money laundering, when what really counts is much better, but inevitably much more demanding, intelligence work?
But the real problem that the Commission has created is this: if a cyber-criminal or -terrorist carries out a ransomware attack on, say, a financial institution or hospital, or a shipping company, and demands a million Euros in Bitcoin, or perhaps much more, as ransom for the restoration of its critical data, or for the renewed functioning of critical computer systems, the proposed new regulatory restriction may make it a criminal offence for the victim to pay the ransom as demanded, in Bitcoin. Is it conceivable that an insurance company will refuse to pay to get back data that may be worth billions, or that a medical centre will refuse to pay to restore critical data that may be necessary to save lives, on the grounds that they would be breaking financial regulations and perhaps risking the imprisonment of a senior executive? (Technically, paying such a ransom could probably be regarded in today’s over-regulated world as a money laundering offence to begin with, since it is transferring the proceeds of crime, but the victim organisation would at least have the legal defence of duress.) On top of that, after May 2018, the EU’s own General Data Protection Regulation will impose draconic fines for breaches of personal data held by any business, not only resident in the EU but even doing business there: these fines are large enough, up to the larger of 20mn Euro or 4 percent of global turnover, that they could bankrupt many companies. The more or less obvious result is that many cyber attacks will be carried out in order to simply blackmail companies: pay us, or we will release the personal data you hold on your clients, or patients, or whoever.
Yes, it is certainly possible to create some kind of legal process to request permission of the authorities, just as the current Suspicious Activity Report regime makes it possible for law enforcement authorities to permit payment from frozen funds. But since ransomware usually works on the basis that the victime only has 24 or 48 hours to pay up, otherwise the data remains irreversibly encrypted forever, such a process would almost certainly be useless.
The solution to this regulatory minefield might be for the eventual regulations to say explicitly that the payment of ransom, whether for a human kidnap victim or for kidnapped data or systems is not an offence, whether made in Bitcoin, cash or uncut diamonds. But this in itself would constitute a moral hazard, as it would incentivise criminals and terrorists to carry out such attacks. The bottom line is that the European Union, in its enthusiasm to protect society from all kinds of risks and vulnerabilities by creating mountains of regulations, has made the problem worse.
Anyone who has bothered to listen and read, rather than hyperventilate and stupidly ridicule President Donald Trump’s executive order on “Protecting the Nation from Terrorist Attacks by Foreign Nationals” will see that the order is very likely to disrupt material and moral passive support for Islamists and jihadists both within and outside the United States, provided by those normally resident in that country.
For a very long time US based passive supporters have been able to provide Islamists and jihadists with ongoing support from within their well established communities, enabled by a secure relatively comfortable US base. The so -called "Muslim ban" executive order serves a useful purpose even in its incorrect labelling by the media for it immediately disrupts, both in thought and in substance, the existence of that comfortable base. Put simply, passive supporters are less likely to mount arguments about "the suicide bombers' legitimate grievances" when their own bases are disturbed. Material support both overt and covert is even less likely to be provided.
Adding to the collection of articles on the subject of passive support for jihadis is the article below about some recent work on the modelling of innovation. Its relevance to the study of jihadi networks and the passive actors in those networks becomes obvious once one considers jihadism as an innovation in the promotion of the Islamist cause. Once seen as innovation it becomes equally obvious that jihadi and Islamist networks must be destroyed entirely in order to stop their evolution. Clearly, the eradication of passive supporters is a necessary element.
Innovation is one of the driving forces in our world. The constant creation of new ideas and their transformation into technologies and products forms a powerful cornerstone for 21st century society. Indeed, many universities and institutes, along with regions such as Silicon Valley, cultivate this process.
And yet the process of innovation is something of a mystery. A wide range of researchers have studied it, ranging from economists and anthropologists to evolutionary biologists and engineers. Their goal is to understand how innovation happens and the factors that drive it so that they can optimize conditions for future innovation.
This approach has had limited success, however. The rate at which innovations appear and disappear has been carefully measured. It follows a set of well-characterized patterns that scientists observe in many different circumstances. And yet, nobody has been able to explain how this pattern arises or why it governs innovation.
Today, all that changes thanks to the work of Vittorio Loreto at Sapienza University of Rome in Italy and a few pals, who have created the first mathematical model that accurately reproduces the patterns that innovations follow. The work opens the way to a new approach to the study of innovation, of what is possible and how this follows from what already exists.
The notion that innovation arises from the interplay between the actual and the possible was first formalized by the complexity theorist Stuart Kauffmann. In 2002, Kauffmann introduced the idea of the “adjacent possible” as a way of thinking about biological evolution.
The adjacent possible is all those things—ideas, words, songs, molecules, genomes, technologies and so on—that are one step away from what actually exists. It connects the actual realization of a particular phenomenon and the space of unexplored possibilities.
But this idea is hard to model for an important reason. The space of unexplored possibilities includes all kinds of things that are easily imagined and expected but it also includes things that are entirely unexpected and hard to imagine. And while the former is tricky to model, the latter has appeared close to impossible.
What’s more, each innovation changes the landscape of future possibilities. So at every instant, the space of unexplored possibilities—the adjacent possible—is changing.
“Though the creative power of the adjacent possible is widely appreciated at an anecdotal level, its importance in the scientific literature is, in our opinion, underestimated,” say Loreto and co.
Nevertheless, even with all this complexity, innovation seems to follow predictable and easily measured patterns that have become known as “laws” because of their ubiquity. One of these is Heaps’ law, which states that the number of new things increases at a rate that is sublinear. In other words, it is governed by a power law of the form V(n) = knβ where β is between 0 and 1.
Words are often thought of as a kind of innovation, and language is constantly evolving as new words appear and old words die out.
This evolution follows Heaps’ law. Given a corpus of words of size n, the number of distinct words V(n) is proportional to n raised to the β power. In collections of real words, β turns out to be between 0.4 and 0.6.
Another well-known statistical pattern in innovation is Zipf’s law, which describes how the frequency of an innovation is related to its popularity. For example, in a corpus of words, the most frequent word occurs about twice as often as the second most frequent word, three times as frequently as the third most frequent word, and so on. In English, the most frequent word is “the” which accounts for about 7 percent of all words, followed by “of” which accounts for about 3.5 percent of all words, followed by “and,” and so on.
This frequency distribution is Zipf’s law and it crops up in a wide range of circumstances, such as the way edits appear on Wikipedia, how we listen to new songs online, and so on.
These patterns are empirical laws—we know of them because we can measure them. But just why the patterns take this form is unclear. And while mathematicians can model innovation by simply plugging the observed numbers into equations, they would much rather have a model which produces these numbers from first principles.
Enter Loreto and his pals (one of which is the Cornell University mathematician Steve Strogatz). These guys create a model that explains these patterns for the first time.
They begin with a well-known mathematical sand box called Polya’s Urn. It starts with an urn filled with balls of different colors. A ball is withdrawn at random, inspected and placed back in the urn with a number of other balls of the same color, thereby increasing the likelihood that this color will be selected in future.
This is a model that mathematicians use to explore rich-get-richer effects and the emergence of power laws. So it is a good starting point for a model of innovation. However, it does not naturally produce the sublinear growth that Heaps’ law predicts.
That’s because the Polya urn model allows for all the expected consequences of innovation (of discovering a certain color) but does not account for all the unexpected consequences of how an innovation influences the adjacent possible.
So Loreto, Strogatz, and co have modified Polya’s urn model to account for the possibility that discovering a new color in the urn can trigger entirely unexpected consequences. They call this model “Polya’s urn with innovation triggering.”
The exercise starts with an urn filled with colored balls. A ball is withdrawn at random, examined, and replaced in the urn.
If this color has been seen before, a number of other balls of the same color are also placed in the urn. But if the color is new—it has never been seen before in this exercise—then a number of balls of entirely new colors are added to the urn.
Loreto and co then calculate how the number of new colors picked from the urn, and their frequency distribution, changes over time. The result is that the model reproduces Heaps’ and Zipf’s Laws as they appear in the real world—a mathematical first. “The model of Polya’s urn with innovation triggering, presents for the first time a satisfactory first-principle based way of reproducing empirical observations,” say Loreto and co.
The team has also shown that its model predicts how innovations appear in the real world. The model accurately predicts how edit events occur on Wikipedia pages, the emergence of tags in social annotation systems, the sequence of words in texts, and how humans discover new songs in online music catalogues.
Interestingly, these systems involve two different forms of discovery. On the one hand, there are things that already exist but are new to the individual who finds them, such as online songs; and on the other are things that never existed before and are entirely new to the world, such as edits on Wikipedia.
Loreto and co call the former novelties—they are new to an individual—and the latter innovations—they are new to the world.
Curiously, the same model accounts for both phenomenon. It seems that the pattern behind the way we discover novelties—new songs, books, etc.—is the same as the pattern behind the way innovations emerge from the adjacent possible.
That raises some interesting questions, not least of which is why this should be. But it also opens an entirely new way to think about innovation and the triggering events that lead to new things. “These results provide a starting point for a deeper understanding of the adjacent possible and the different nature of triggering events that are likely to be important in the investigation of biological, linguistic, cultural, and technological evolution,” say Loreto and co.
We’ll look forward to seeing how the study of innovation evolves into the adjacent possible as a result of this work.
Ref: arxiv.org/abs/1701.00994: Dynamics on Expanding Spaces: Modeling the Emergence of Novelties
It was reported on this blog in December last year that Richard Haythornthwaite, the chairman of Mastercard, had been implicated in a money laundering scheme involving Prince Turki Al-Saud, son of the late King Abdullah of Saudi Arabia. Readers will recall that that scheme has involved the apparent theft of billions of dollars from the Malaysian sovereign fund, 1 MDB Bhd.
That Haythorthawite can then continue to sit on the board and as chairman of what is esentially an extremely large international money transfer business must clearly raise questions for the board, who may well have to consider their own liability if they choose to either ignore these matters , or defend their chairman.
Readers will be aware how the negligence of Australian authorities, including the national police, the Australian Federal Police, now headed by one Andrew Colvin, allowed former SGDT Yassin Al-Kadi and his associates to launder some USD 8 billion via that jurisdiction. A decade later, things seem to have gotten worse. Now it seems money launderers can even rely on Government websites to ply their trade, comfortable in the knowledge that the Australian Federal Police will do nothing even if the facts are presented to it repeatedly.
This excerpt from a recent report on Australia's ABC provide the gist of the matter:
PAT MCGRATH (Reporter): He (Bradley, a victim) reported the fraud to jobactive's administrators and they removed the ad, but it reappeared days later.
BRADLEY: I've reported that about four or five times now. The last one, my response back to them simply was, "I don't think your systems are working and I don't think my reporting is helping those systems work," because that was probably four weeks ago and in that time they're still popping up, new ones, daily.
PAT MCGRATH: The Department of Employment declined to do an interview about jobactive, but in a statement said it had tightened its screening of job ads after a spike in fraudulent posts this year. It says it relies on an automated computer system to check the job ads it hosts are genuine. PAT MCGRATH: Poonam (another victim) realised she'd been turned into a criminal and she'd been tricked by an international crime syndicate into sending money overseas. So she came to the police, but they told her because she hadn't lost any money herself, they couldn't investigate.
International money launderers are using Australian Government employment website JobActive to lure unsuspecting job-seekers into becoming money mules.
Transcript
LEIGH SALES, PRESENTER: Every day, thousands of unemployed Australians log on to a government-run website called jobactive. The site is supposed to be a safe and secure job search portal controlled by the Department of Employment. But tonight 7.30 can reveal cyber criminals have infiltrated jobactive, targeting almost 300,000 registered job seekers with a variety of scams. In one, international money launderers used fake job ads to lure unsuspecting applicants into becoming money mules. Pat McGrath reports.
PAT MCGRATH, REPORTER: Melbourne's outer suburban frontier with its rows and rows of new houses. The last place you'd expect an international money laundering operation to find recruits.
POONAM KALA: I know it's criminal thing I have done. I was a part of the criminal thing. If I go to the jail and what happened to my little one?
PAT MCGRATH: When Poonam Kala escaped an unhappy marriage last year, she set out to start a new life and find a new job. She ended up in the clutches of foreign criminals.
Been a scary time.
POONAM KALA: Yes, I was so scared on that time.
PAT MCGRATH: Her nightmare began when she logged on to the government-owned job search site jobactive. With about 275,000 registered job seekers, jobactive is at the heart of the Government's welfare-to-work strategy. Within days of registering, Poonam Kala received an email inviting her to apply for a job.
POONAM KALA: I was so happy. I was, "Oh, my God, that's so quick." Yes.
PAT MCGRATH: The job offered great opportunities with the aviation giant Boeing. So, Poonam filled out an application form and after doing an interview over Skype chat with a HR manager who called herself Stella Alonso, she got the job, but weeks passed without any work until she woke up to a surprise.
POONAM KALA: In the morning, 7 o'clock, I saw her message on my Skype and then she said, "OK, you got a - can you check your account? You got $15,000 into your account." And then I checked and it was there.
PAT MCGRATH: $15,000?
POONAM KALA: $15,000. And then she reminded me again because we are dealing with the defence and military things, you do not need to tell anyone like what you are doing.
PAT MCGRATH: The instructions were clear. Go to the bank, withdraw the cash and send it to a woman named Anna Pretrova in Poland.
POONAM KALA: Because on that time I didn't have any car. I have to call the taxi and I think I reached by bank 8.30 or 9 o'clock in the morning. I asked the bank and then they said, "Oh, we are so busy in the morning at this time. We can't give you $10,000, but we can give you $5,000 only."
PAT MCGRATH: Poonam sent the cash via Western Union and then went back to the bank to transfer the rest, but staff at the branch said they'd put a block on her account.
POONAM KALA: They said, "OK, we understand, like, what you're doing, but we just want to let you know the money you have received into your account is stolen money." And then when I just heard the words "stolen money", I was just - just couldn't think anything. My brain just stopped working on that time.
PAT MCGRATH: Poonam realised she'd been turned into a criminal and she'd been tricked by an international crime syndicate into sending money overseas. So she came to the police, but they told her because she hadn't lost any money herself, they couldn't investigate.
They told her to report what happened to the Government's new Australian Cybercrime Online Reporting Network known as ACORN. ACORN is supposed to ensure that cyber crimes are referred to the appropriate law enforcement agency, but more than six months later, Poonam has heard nothing.
POONAM KALA: I'm still thinking in five years or in 10 years maybe they can say, "Oh, yeah, we have opened your file. Now we need some kind of information."
PAT MCGRATH: ACORN says for privacy reasons it can't say what happened to Poonam's complaint.
This is not an isolated case. 7.30 has seen evidence of other job seekers being recruited by the same criminals that targeted Poonam and we've spoken to a woman who was tricked into sending money to China. She too is waiting to find out whether the police will investigate.
LOUIS DE KOKER, DEAKIN UNI. LAW SCHOOL: I am concerned act the fact that the leads seem to come from a government website. The users of these websites were - tend to put great trust in the approaches via these sites.
PAT MCGRATH: Louis De Koker is an expert in Australian and international laws surrounding money laundering. He says there's a chance victims like Poonam Kala could face prosecution.
LOUIS DE KOKER: Whether they have exposure to prosecution depends on whether law enforcement officials believe that it was sheer naivety.
PAT MCGRATH: The Department of Employment has been warned before that there may be scams on its website.
Bradley, who has asked us not to use his surname, thought he'd found his dream job through jobactive earlier this year.
BRADLEY: That one looked quit genuine to begin with. They wanted people to work from home scanning 3-D objects with a 3-D scanner to be put up on the internet.
PAT MCGRATH: But when Bradley, a trained English teacher, got his contract, he quickly worked out he was the target of a scam.
BRADLEY: That English is just - that grammar's just really starting to get very broken English.
PAT MCGRATH: So it's sort of indicating to you that this might not be a genuine offer of employment?
BRADLEY: Well - well yeah. I wouldn't expect an official response from a company offering genuine employment to really be that bad with grammar.
PAT MCGRATH: He reported the fraud to jobactive's administrators and they removed the ad, but it reappeared days later.
BRADLEY: I've reported that about four or five times now. The last one, my response back to them simply was, "I don't think your systems are working and I don't think my reporting is helping those systems work," because that was probably four weeks ago and in that time they're still popping up, new ones, daily.
PAT MCGRATH: The Department of Employment declined to do an interview about jobactive, but in a statement said it had tightened its screening of job ads after a spike in fraudulent posts this year. It says it relies on an automated computer system to check the job ads it hosts are genuine.
LOUIS DE KOKER: I think it would be extremely helpful if those who are running these websites on behalf of government could perhaps do a great measure of due diligence.
PAT MCGRATH: Poonam Kala has finally found a real job and is trying to move on with her life, but she still lives with the fear that she may have committed a crime and that the criminals that tricked her into it know where to find her.
POONAM KALA: It was horrible and I'm still - if I still think about, I'm still a little bit scared. Little bit scared about the things like - like, I can't even imagine, like, if something happened on that time to me and then I - so that is why even I can't trust anyone now.
Adel al-Jubei had earlier said that the money was an investment made by a private Saudi citizen, and had nothing to do with the Saudi government. Whatever the reasons for his about-face, the Kingdom is now directly implicated in the financing of terrorism in South East Asia,as are the banks that facilitated the transfers, which include Wells Fargo, Australia's ANZ ,and its Malaysian associate AMBank.
Part of the funds said to be stolen (from 1 Malaysia Development Bhd, a Malaysian SWF) is said to have found its way to the personal accounts of the Malaysian Prime Minister Najib Razak. In his defence he has said that a Saudi family had sent him a donation of US$ 681 million, via Wells Fargo Bank of New York, using a BVI company (since liquidated) called Tanore Finance. No one is buying the story, and to make matters worse Najib's deputy Ahmad Zaid Hamidi and other ministers have said that the money was only part of what the Saudi benefactor had provided Muslim groups throughout the region, including Muslim separatist in Thailand and the Philippines who have been waging guerrilla warfare against the majority in those countries.
The Malaysian Government has since gone further and insists that the Saudi family concerned is in fact the Saudi Royal Family, then headed by the late King Abdullah.The Malaysian Government says King Abdullah and the Al-Sauds provided that funding in an attempt to ensure their new enemies, the Muslim Brotherhood, did not gain a foothold in Malaysia. The BBC quoting unnamed "Saudi sources" has confirmed the Malaysian Government's story,and that King Abdullah himself approved that funding.
Image copyright AFP A Saudi source said the donation was approved by the late King Abdullah Prince Turki bin Abdullah, one of the king's sons, is reported to have had extensive business dealings in Malaysia.
It is now for the Al-Sauds to clear matters with regards the Malaysian revelation. Then again, perhaps the Malaysian Government is using the cover of Saudi history of funding jihadis to justify its allegation, which provides a convenient cover for a what is probably a theft.
Richard Haythornthwaite, the chairman of Mastercard, has been implicated in the money laundering scheme involving Prince Turki Al-Saud previously reported here. As reported, that scheme has involved the apparent theft of billions of dollars from the Malaysian sovereign fund, 1 MDB Bhd.
The investigate news site Sarawak Report in its latest edition of an ongoing investigation into Turki's Petrosaudi has reported:
Given the mounds of evidence now apparent about the collusion of PetroSaudi in the 1MDB heist masterminded by Jho Low and this latest proof from Good Star’s own incorporation records, Sarawak Report wrote last week to the company’s President, the prominent British businessman Rick Haythornthwaite.
Haythornthwaite is also the Chairman of the UK energy giant Centrica. We asked if he knew of PetroSaudi’s letter claiming that it owns Good Star and if he had authorised the company to make such a claim?
In his response to Sarawak Report 's editor Clare Rewcastle-Brown Haythornthwaite said among other things:
Dear Mrs Rewcastle
Having now done some research into your background, it is clear that you are an active campaigning blogger rather than an objective journalist with a desire to understand the true facts behind this matter. That your email to me contains fundamental factual errors – not least suggesting that I am, or have ever been, chairman of PetroSaudi International – reinforces my concerns about your credibility.
Therefore, even if I were to be in possession of information relevant to your query, I would be unwilling to assist you in your questionable activities.
Rick Haythornthwaite, 55, has been the Company’s Non-Executive Chairman since July 2009 having joined the Board in March 2009 as a Non-Executive Director. He was Chief Executive of Invensys plc, from 2001 to 2005. He was also previously Group Chief Executive of Blue Circle Industries and spent 18 years with BP in various senior roles. He is currently Non-Executive Chairman of MasterCard Inc, a Senior Advisor to STAR Capital Partners and President of PetroSaudi International (UK) Ltd. His previous non-executive roles included Board membership of ICI, Land Securities and Lafarge. In the voluntary sector, he is Chairman of the Southbank Centre and Chairman of the World Wide Web Foundation. Rick will retire from the Board at the Company’s annual general meeting (AGM) on 19 July 2012. Appointed 23 March 2009
While Haythornthwaite might get away with saying " even if I were to be in possession of information relevant to your query, I would be unwilling to assist you in your questionable activities" to Rewcastle-Brown's Sarawak Report, it is not a position he can maintain with regards Mastercard, its shareholders, and the relevant authorities, in the US, UK and other jurisdictions that are investigating the 1 MDB matter.
Having previously said that a sum of US$681 million found in Malaysian Prime Minister Najib Razak's personal account was only part of what a Saudi benefactor had provided Muslim groups throughout the region, including Muslim separatists in Thailand and the Philippines who have been waging guerrilla warfare against the majority in those countries, Malaysia's Deputy Prime Minister Ahmad Zahid Hamidi now says that the money was contributed by a number of different donors.
This revelation ,given the fact that the sender on record is a BVI company since liquidated named Tanore Finance, suggests that there was a scheme to gather and distribute funds using Wells Fargo as a conduit. The quantum and the structure of the payment suggests that Wells Fargo has at the very least questions to answer with regards basic know your customer (KYC) rules.
by Ganesh Sahathevan Having recently payed about a million and a half in fines for AML/CTF breaches, Wells Fargo is now implicated in a money laundering scandal that rivals the drug cartel business that its wholly-owned subsidiary Wachovia had once transacted. At the heart of the scandal is the apparent theft of some $ 10 billion from a Malaysian sovereign wealth fund, 1Malaysia Development Bhd (1 MDB). Part of the funds said to be stolen is said to have found its way to the personal accounts of the Malaysian Prime Minister Najib Razak. In his defence he has said that a Saudi family had sent him a donation of US$ 681 million, via Wells Fargo Bank of New York, using a BVI company (since liquidated) called Tanore Finance. That company was a client of Falcon Private Bank Of Singapore, which was the ordering institution for that wire transfer. The Wall Street Journal which broke the story of that massive "donation" hasplaced on-line the relevant documents. No one is buying the story, and to make matters worse Najib's deputy Ahmad Zaid Hamidi and other ministers have said that the money was only part of what the Saudi benefactor had provided Muslim groups throughout the region, including Muslim separatist in Thailand and the Philippines who have been waging guerrilla warfare against the majority in those countries. END
The Ministry Of Foreign Affairs Of The Russian Federation has issued a press release of Russian Foreign Minister Sergey Lavrov’s telephone conversation with his Turkish counterpart Mevlüt Çavuşoğlu after Turkey shot down a Russian fighter jet.The press release makes clear that Russia considers Turkey's act an act of aggression motivated by Turkey's support for the Islamic State (IS):
The Ministry of Foreign Affairs of the Russian Federation
№ 2289-25-11-2015
25 November 2015
Press release on Sergey Lavrov’s telephone conversation with Turkish Foreign Minister Mevlüt Çavuşoğlu
On November 25, Foreign Minister Sergey Lavrov spoke on the phone with the Foreign Minister of Turkey Mevlüt Çavuşoğlu, a call initiated by Turkey.
Sergey Lavrov expressed indignation over Turkey’s unfriendly act. He pointed out that, by shooting down a Russian plane on a counter-terrorist mission of the Russian Aerospace Force in Syria, and one that did not violate Turkey’s airspace, the Turkish government has in effect sided with ISIS. Judging by the facts, Turkey’s actions appear premeditated, planned, and undertaken with a specific objective. The Russian Minister reminded his counterpart about Turkey’s involvement in the ISIS’ illegal trade in oil, which is transported via the area where the Russian plane was shot down, and about the terrorist infrastructure, arms and munitions depots and control centres that are also located there. Sergey Lavrov specifically said that this act by Turkey will have serious consequences for Russian-Turkish relations and will not go unanswered.
Mevlüt Çavuşoğlu has expressed his condolences and regret over the death of the pilot. At the same time, his statement was ultimately intended to justify the actions of the Turkish Air Force. The Turkish Minister also spoke about the importance of maintaining dialogue and ties with Russia.
November 25, 2015
This would not be the first time in recent years that the Turkish Government led by President Recep Tayyip Erdogan has found itself at the center of a terrorist financing network.In 2004 Erdogan himself stood accused of providing a safe haven for Yassin Al-Kadi, who was then on the UN , US and other national lists r of specially designated terrorists. Al-Kadi was one of the first persons so listed after 9/11, and stood accused of being Al-Qaeda's chief financier.
As I demonstrated in the article below published in 2007, the Kadi-Turkey network has deep and old ties with the Saudi networks that support daawah (Muslim outreach) ,which includes the construction of mosques all over the world.
We have therefore ISIL, Al-Qaeda and the international daawah all sharing common financiers. It would be naive to assume that the same pool of financiers would finance three movements with opposing objectives.
The New Anatolian of Turkey reported on February 23 2007:
Inspectors Hamza Kacar and Galip Sabuncu wrote a report in which they claimed that they had uncovered significant evidence of money movements linked to Yasin el Kadi (SDGT Sheik Yassin Al-Kadi) in Turkey, but added that their probe was blocked by certain bureaucrats and politicians.
The inspectors said that el Kadi's money movements were concentrated on Albaraka Turk, an Islamic finance institution….Kacar sent a letter to the Albaraka Turk on Nov. 5, 2003, asking the institution to whom el Kadi was making money transfers via the bank. The inspector also asked the meaning of two-letter codes in account abstracts of numerous companies of which al Kadi was a shareholder. Albaraka rejected the request and Finance Minister Kemal Unakitan forced the inspectors in early 2004 to complete their report in ten days. (http://www.thenewanatolian.com/tna-23456.html)
The report read in context of other information in the public domain links together a number of persons whose names have featured prominently in the counter-terrorism financing literature.
In his book "Desperately Seeking Paradise" Zianuddin Sardar ,(usually described as a London based Muslim moderate), gives an account of how somewhere around the time the first Gulf War was about to or had commenced, he was persuaded to fly to Saudi Arabia at the invitation of certain wealthy Saudis to receive a grant of USD 5 million that was to enable him to set-up a think tank that would put forward the Arab view.
Sardar was then in Malaysia, had reservations about making the trip, but was persuaded to go by Anwar Ibrahim, who was then Minister for Education but about to appointed Minister for Finance.
Sardar writes that Anwar told him to accept their invitation, for the Saudis had been on the phone to him rather often about the matter of the gift to Sardar. Sardar flew to Saudi Arabia,and went on to meet Sheikh Saleh Kamel,founder of the Al Baraka investment group.Also present at that meeting was Anwar Ibarhim, who Sardar says had flown out separately in a Malaysian government jet.
In September 1990 The Malaysian Ministry of Finance sold a 17.5 % stake in Bank Islam Malaysia Bhd , Malaysia’s first Islamic bank, to JAMI Malaysia Sdn Bhd . Its shareholders were the New York-based Saar Corporation, the Saudi-based Al Rajhi,Banking and Investment Corporation (ARABIC) and Salah Kamel's Al Baraka Group. The minister for finance at that point of time was Daim Zainuddin.
Anwar Ibahim replaced Daim Zainuddin as Minister for Finance sometime in 1991.
The company listed on the Kuala Lumpur Stock Exchange in 1992 .
In May 1994 the Ministry of Finance Inc (Anwar Ibrahim) disposed of its entire 21.14m shares in Bank Islam Malaysia Bhd to Lembaga Urusan dan Tabung Haji and Jami Malaysia Sdn Bhd, and ceased to be a substantial shareholder. A total of 18.46m shares were sold to Lembaga Urusan dan Tabung Haji bringing its stake in Bank Islam to 35.70m shares, or 26.76%. The remaining 2.89m shares were sold to Jami Malaysia, which was at that time the registered holder of 5.27m shares.
Jamal Barzinji, who heads the SAFA Trust which is part of the SAAR Foundation,and who together with Anwar and others founded the International Institute of Islamic Thought (he was at that time,as he is now ,like Anwar a director of the IIIT)was appointed a director of the bank and appears to have remained as one until sometime in 2003(for further details see http://www.terrorfinance.org/the_terror_finance_blog/2006/11/jamal_barzinji_.html)
Later in 2002 it would be revealed in the affidavits of David Kane that the IIIT also was funded by the SAAR Corporation and the SAFA Trust. That is, Anwar 's IIIT received funding from the SAAR Foundation at the same time that he sold the SAAR Foundation the MOF's shares in Bank Islam.
Then, in May 2006, Salah Kamel decided to float his banking assets on the Bahrain Stock Exchange. The now listed vehicle for the exercise, Al-Baraka Banking Group, (ABG) raised some US$ 580 million in what was termed one of the biggest IPO's in the Middle East.
In 1991, SDGT Sheik Yassin Al-Kadi and two of Anwar Ibrahim ‘s closest associates, Drs Wan Hasni Wan Sulaiman and Rahim Ghouse, formed Abrar Inc, a fund management company. This business was to take many shapes and forms, particularly after its base of operations was moved to Malaysia. These matters have been written about extensively on this site. The most recent article can be sighted at http://www.terrorfinance.org/the_terror_finance_blog/20
In September 2005, shortly after his release from prison , Anwar Ibrahim visited Turkey, at the invitation of Erdogan's Justice and Development Party, for meetings with amongst others, Erdogan and an adviser, Dr Ahmet Davutoglu.
The following has been said of Davutoglu:
Davutoglu has spent time in Malaysia and speaks highly of that country's supposedly dynamic and rather unique combination of Islam, capitalism, and democracy. It is no surprise, then, that in recent months Erdogan has reached out to some unsavory characters in Turkey's neighborhood, visiting President Bashar Assad in Syria earlier this year and traveling to Tehran to meet the Iranian mullahs.
(Gerard Baker, Let's Not Talk Turkey ,The Weekly Standard,29 August 2005)
AKP politician Ahmet Davutoglu, previously a professor at the International Islamic University in Malaysia, and now an advisor to both Prime Minister Erdogan and Foreign Minister Abdullah Gul, argues that Turkey can remain powerful only if it utilizes the "strategic depth" of its neighborhood, developing better ties with those Muslim neighbors with whom it shares cultural affinity. The world is composed of cultural blocs, he writes, and Turkey falls into the "Muslim bloc."
(Soner Cagaptay, ANKARA DISPATCH,Eastern Heading; TNR Online | Post date 09.08.04)
The following is an extract from a Monash press release(see full form below) quoting "terrorism expert" and lead investigator Greg Barton:
GTReC researchers found Australian militants and terrorists frequently consulted and consumed online extremist material but other factors played far more important roles in radicalising them. Their real world social networks of friends and family, and access to individuals who fought overseas or attended terrorist training camps were far more influential in affecting their thought and behaviour than materials circulating in the virtual world.
Lead chief investigator Professor Greg Barton said relationships, in the sense of social networks, belonging, and the allure of an enhanced sense of identity, play an important role in violent.
Australian jihadis are said to be very well prepared, and the best equipped for battlefield duties. As reported in The Australian:
THERE was something about the six Australians that made them stand out. Thousands of foreigners have ventured into Syria and Iraq during the past year for their journey to jihad; but, for locals who live along the border between Turkey and Syria, this group was different. As they sat drinking coffee before making their final walk into a foreign war, these Australians stood out: they were supremely confident, well-dressed and well-resourced. “It was clear they were not rookies,” says one local who watched them sitting at the coffee shop in Turkey about 50m from the border with Syria. “They seemed to know what they were doing.”
Locals watching the group were struck by several things. First, only one of them spoke Arabic and had to translate everything for the other five. He seemed to be their leader and looked to be in his 40s while the others were younger, in their 30s. Every so often he walked away from the group to talk on the phone, as if for privacy.
Second, they were clearly well prepared; they wore new, strong-looking walking boots, a contrast to many of the bedraggled jihadists who depart from this cafe clothed in little more than their well-worn attire and a desire to join the battle for Islam between Sunnis and Shi’ites. Good shoes and bags full of supplies were low on the list of priorities for those zealots.
Observers who saw the group of Australians said they seemed prepared for a long assignment. But what stood out most was their demeanour. They were calm, confident and relaxed. Locals noticed they all had Australian passports.
They were, one local commented, physically very large — he found them intimidating — and they wore the crocheted woollen caps popular with some Muslim men. All were “very beardy”.
(Unholy foot soldiers in a foreign fight THE AUSTRALIAN JULY 12, 2014)
It is obvious that these Australian jihadis had been trained professionally, were well funded, and had support of strong network of passive supporters. It is time for the Government, law enforcement agencies, and Muslim leaders, to tell us who these people are, and what is being done to eradicate the threat they pose this society.
The key findings from a four-year Australian Research Council-funded collaborative research project on terrorist radicalisation in Australia by researchers from Monash University’s Global Terrorism Research Centre (GTReC) will be released on Thursday 8 August.
The project, conducted in partnership with Victoria Police, Australian Federal Police, Department of Premier and Cabinet and the Victorian Department of Justice, is the most significant and in-depth examination of radicalisation undertaken in Australia.
Understanding Terrorism in an Australian Context: Radicalisation, De-radicalisation and Counter-radicalisationfocused on developing the understanding of radicalisation in an Australian context and sought international perspectives to enhance the understanding of violent extremism in Australia and relevant international threats.
Project members conducted over 100 interviews, including current and/or former violent extremists, in Australia, Indonesia, Europe, North America and elsewhere, from various ideologies (jihadist,far-right, far-left, IRA and Tamil Tigers). Also interviewed were many of the world’s leading counter-terrorism practitioners and analysts, and representatives from a variety of community groups, canvassing their attitudes on why some individuals become radicalised and ways community, government and religious stakeholders might work together to counter violent extremism.
The role of the internet and on-line materials in radicalising some individuals was also thoroughly investigated. Online sources provided both the lethal inspiration and the technical know-how for Norwegian Anders Behring Breivik’s anti-Islam motivated terrorism in Oslo and Utoya Island in July 2011, in the attack Tamerlan and Johar Tsarnaev perpetrated at the Boston Marathon in April 2013 and the brutal murder of off-duty British soldier Leigh Rigby in Woolwich, London, in May 2013.
GTReC researchers found Australian militants and terrorists frequently consulted and consumed online extremist material but other factors played far more important roles in radicalising them. Their real world social networks of friends and family, and access to individuals who fought overseas or attended terrorist training camps were far more influential in affecting their thought and behaviour than materials circulating in the virtual world.
Lead chief investigator Professor Greg Barton said relationships, in the sense of social networks, belonging, and the allure of an enhanced sense of identity, play an important role in violent extremism.
“Academics like to focus on ideas and ideology, but emotions, social bonds and experiences also play a crucial role. For many who become caught up in violent extremism social networks are much more important than ideology," Professor Barton said.
The findings also highlighted the importance of using, where possible, non-coercive measures to work with vulnerable individuals and groups to deflect and dissuade them from using violence to achieve their goals. These measures, commonly described as ‘CVE’ (countering violent extremism) initiatives, are becoming more prominent in Australia and overseas as many countries’ security services have observed that such ‘hard’ responses, by themselves, have often been ineffective, sometimes paradoxically increasing, rather than deterring the prospects of radicalising individuals. GTReC’s research highlights the effectiveness of including the social networks of radicalised or vulnerable individuals in countering violent extremism in both Australia and elsewhere.
CVE approaches prioritise interventions that are well ‘upstream’, averting problems before they are fully formed and give rise to criminal behaviour. Recognising key signs, or indicators, of radicalisation is an essential element of CVE. To this end GTReC researchers have developed a model that will enable a diverse range of practitioners to collectively recognise signs of radicalisation through observing indicative changes in behaviour, thinking and social relationships that, when occurring together and trending over time, point to reasons for concern and the need for some sort of intervention.
CVE also requires ‘downstream’ initiatives focusing on rehabilitation and helping individuals and groups disengage from violent extremism and re-engage with mainstream society. All forms of CVE require attention to both the individual and their environment.
For more information contact Glynis Smalley, Monash Media & Communications + 61 3 9903 4843 or 0408 027 848.
At the heart of the scandal is the apparent theft of some $ 10 billion from a Malaysian sovereign wealth fund, 1Malaysia Development Bhd (1 MDB). Part of the funds said to be stolen is said to have found its way to the personal accounts of the Malaysian Prime Minister Najib Razak. In his defence he has said that a Saudi family had sent him a donation of US$ 681 million, via Wells Fargo Bank of New York, using a BVI company (since liquidated) called Tanore Finance. That company was a client of Falcon Private Bank Of Singapore, which was the ordering institution for that wire transfer. The Wall Street Journal which broke the story of that massive "donation" hasplaced on-line the relevant documents.
No one is buying the story, and to make matters worse Najib's deputy Ahmad Zaidi and other ministers have said that the money was only part of what the Saudi benefactor had provided Muslim groups throughout the region, including Muslim separatist in Thailand and the Philippines who have been waging guerilla warfare against the majority in those countries.
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