Sharia Finance

2009-09-09T11:27:00.000-07:00

Clifford Chance advises Islamic Development Bank on an update of its US$1.5bn sukuk programme

Client Work

The programme was originally established in 2005 and this update made a number of Shari'a related structural changes to reflect developments since the programme was established as well as increase the programme size to US$1.5 billion.

The Clifford Chance team worked closely with The Islamic Development Bank and its Shari'a scholars to update this novel sukuk-al-isthismar sukuk programme within the precepts of Shari'a. The programme provides for the issuance of both floating rate and fixed rate certificates. Trust Certificates issued under the programme may be admitted to listing on the official list of the United Kingdom Financial Services Authority and to trading on the London Stock Exchange.
The availability of the sukuk programme will assist The Islamic Development Bank to continue fostering the economic development and social progress of its member countries and Muslim communities.

Deutsche Bank AG, London Branch and HSBC Bank plc were the joint arrangers and dealers of the programme.

Qudeer Latif, Partner and Head of Islamic finance, comments: "Our relationship with the Islamic Development Bank spans back many years and we are delighted to have worked with the IDB again for this successful and innovative update of their programme.
]
The IDB has always been at the forefront of Islamic market developments and this transaction is no exception. We also congratulate the IDB on two successful new issuances under the programme in continuing difficult global market conditions".

The Clifford Chance team in Dubai was led by Qudeer Latif, Partner, Global Head of Islamic Finance and comprised of Bilal Ahmad (Senior Associate) and Shauaib Mirza (Associate). The Clifford Chance team in Madrid comprised of Antonio Henriquez (Senior Associate) and Patrizia Nowakowski (Trainee).

The Rest @ Clifford Chance

Sheikh Saleh Kamel and Al Baraka part of Islamic Super Bank Stikhlafm,

2009-06-18T08:15:00.000-07:00

Adnan Yousif wants to build the first truly global Islamic bank

MOST practitioners of Islamic finance pride themselves on their modesty. But not Adnan Yousif, the chairman of the Union of Arab Banks, a regional club for financial firms. He has recently struck a tone more reminiscent of greed-is-good Wall Street, with a grand plan to build the biggest Islamic bank yet seen, spanning the world and providing Muslim countries with new financial services their people have barely heard of. “People never thought big here, never thought globally,” he says.

Mr Yousif’s ambitions date to the founding of modern Islamic finance. During the 1970s oil boom the Gulf’s Muslim elite needed to put their new-found wealth somewhere, and American government bonds seemed the safest option.

Yet Islam prohibits the charging of interest. So some sheikhs bought bonds but let their Western banks keep the interest, in the casual manner of a customer leaving change on a restaurant table.

To Mr Yousif, then a young banker at American Express in his native Bahrain, this made no sense. At a time when Muslim countries had imposed an oil embargo over America’s support for Israel why, he wondered, refuse the Americans oil but give them billions of dollars?

The embargo faltered and ever more money flowed to the Gulf, prompting Muslim scholars to seek ways to cleanse finance of interest payments. Practical men like Mr Yousif paid attention.

In 1980 he moved to Arab Banking Corporation, a Bahraini bank, and set up an Islamic-finance division. It was little more than a few desks in a bare room where white-robed bankers created investments that generated profits in forms other than interest.

The bank’s bosses thought it would be, at best, a niche business with little chance of competing against Western-style finance.

But over the next two decades Islamic banking prospered, driven by a revival of faith following the Iranian revolution in 1979.
By the turn of the century there were more than 200 Islamic banks and Mr Yousif was leading from the front. He turned his bank’s Islamic-finance division into a stand-alone institution, then became chief executive of Bahrain Islamic Bank in 2002.
Two years later, now head of the Al Baraka Group, another Bahraini bank, he oversaw its initial public offering (IPO), the largest thus far by an Islamic bank.

Along the way, interest-avoidance schemes became ever more sophisticated. Today $700 billion of global assets are said to comply with sharia law. Even so, traditional finance houses rather than Islamic institutions continue to handle most Gulf oil money and other Muslim wealth.

In private, some Gulf bankers speak of the need for an “Islamic Goldman Sachs”. That is what Mr Yousif is now attempting to create—a sharia-compliant investment bank with global reach and ready access to capital. It will be called Istikhlaf, Arabic for “doing God’s work”.

Others in the industry have welcomed the move. “Islamic banking cannot be taken seriously until we have some global Islamic banks,” says Simon Eedle, managing director of Islamic banking at Calyon, a French investment bank. “They don’t have to be present everywhere in the world, but they need to be in the top 100.”

Mr Yousif says he has raised $3.5 billion from Gulf investors and is seeking the same again by the end of the year.
In addition he plans a $3 billion IPO in Dubai and Bahrain. The oil price is down from last year’s peak, but there is plenty of cash in the region looking for a home.
So far, though, most of what Mr Yousif has collected comes from other banks rather than private investors.
He and his backers, including Sheikh Saleh Kamel, the force behind the Al Baraka Group, delayed the launch of Istikhlaf last year after turbulence in the financial markets.
They also dropped talk of raising up to $100 billion—at least for now.

Even with a more modest capital base of $10 billion, Istikhlaf will stand a reasonable chance of picking up lucrative finance deals.

The region’s ubiquitous infrastructure projects need beefy backers. Most Islamic banks have so far been absent from this field because of their small size.

Deals instead went to sharia-compliant units of multinationals like Deutsche Bank, HSBC and Citigroup. These will now face stronger local competition.Mr Yousif’s ambitions do not end there.

He plans to create a team of venture-capital researchers to sift through innovators’ ideas and provide the good ones with a cradle-to-IPO service.
Many people do this successfully in Silicon Valley, but potential investors in his bank may wonder how easy it will be to transplant that sort of high-technology entrepreneurship to the Gulf.

You say sukuk, I say heresy

More worrying still, the rules for Islamic finance are not uniform around the world.

A Kuwaiti Muslim cannot buy a Malaysian sukuk (sharia-compliant bond) because of differing definitions of what constitutes usury. Indeed, a respected Islamic jurist recently denounced most sukuk as godless.
Nor are banking licences granted easily in most Muslim countries. That is why big Islamic banks are so weak. Often they are little more than loose collections of subsidiaries.
They also lack home-grown talent: most senior staff are poached from multinationals.

There are worries, too, about Istikhlaf’s lack of a Saudi presence or partner.

There have been rumours of a merger with Saudi Investment Bank, although Mr Yousif has denied this. Such a deal would be a big help. Saudi Arabia is one of the main growth areas for Islamic banking. It has the largest oil reserves and the most valuable project-finance deals.
It is no coincidence therefore that the biggest Islamic bank to date, Al Rajhi, is Saudi.

But if anyone can snatch the lead from the Saudis it is Mr Yousif. Never afraid of breaking the mould, he confesses to admiring Alan Greenspan, a man (of Jewish origins) better known as a disciple of Ayn Rand, the prophet of rugged capitalism, than as a scholar of holy scripture. Mr Yousif has read the former Fed chairman’s memoirs “three or four times”, he says. With luck he will heed Mr Greenspan’s warnings about irrational exuberance.

The Rest @ The Economist

Islamic Financial Services Board

2009-03-24T08:31:00.000-07:00

Islamic Financial Services Board

Membership List: Do they do business with Sudan? Sudan seems to think so.

ABC Islamic Bank (E.C.)
Bahrain
Observer Member
2.
Absa Bank
South Africa
Observer Member
3.
Abu Dhabi Commercial Bank
United Arab Emirates
Observer Member
4.
Abu Dhabi Islamic Bank
United Arab Emirates
Observer Member
5.
Affin Islamic Bank Berhad
Malaysia
Observer Member
6.
Ahli Bank QSC
Qatar
Observer Member
7.
Ahli United Bank
Bahrain
Observer Member
8.
Al Baraka Bank Lebanon
Lebanon
Observer Member
9.
Al Hilal Bank
United Arab Emirates
Observer Member
10.
Al Rajhi Banking and Investment Corporation (Malaysia) Bhd.
Malaysia
Observer Member
11.
Al Rowad Financial Services Co.
Sudan
Observer Member
12.
Al Safa Islamic Banking, Commercial Bank of Qatar
Qatar
Observer Member
13.
Al Salam Bank
Bahrain
Observer Member
14.
Al Salam Bank
Sudan
Observer Member
15.
Al-Jazira Bank
Saudi Arabia
Observer Member
16.
Al-Muthanna Investment Company
Kuwait
Observer Member
17.
Al-Rajhi Banking and Investment Corporation
Saudi Arabia
Observer Member
18.
Albaraka Banking Group
Bahrain
Observer Member
19.
Albaraka Turkish Finance House
Turkey
Observer Member
20.
Algazeera Sudanese Jordanian Bank
Sudan
Observer Member
21.
Allied Cooperative Insurance Group
Saudi Arabia
Observer Member
22.
AmIslamic Bank Berhad
Malaysia
Observer Member
23.
Amlak Finance
United Arab Emirates
Observer Member
24.
Animal Resources Bank
Sudan
Observer Member
25.
Arab Islamic Bank
Palestine
Observer Member
26.
Arbah Capital
Saudi Arabia
Observer Member
27.
Arcapita Bank
Bahrain
Observer Member
28.
AREF Investment Group
Kuwait
Observer Member
29.
Asian Development Bank
International Inter Governmental Organizations
Associate Member
30.
Asian Finance Bank Berhad
Malaysia
Observer Member
31.
A�ayan Leasing and Investment Co.
Kuwait
Observer Member
32.
Badr Al Islami
United Arab Emirates
Observer Member
33.
Bahrain Islamic Bank
Bahrain
Observer Member
34.
Bangko Sentral ng Pilipinas
Philippines
Associate Member
35.
Bangladesh Bank
Bangladesh
Full Member
36.
Bank Al-Maghrib
Morocco
Observer Member
37.
Bank Asya
Turkey
Observer Member
38.
Bank for International Settlements
International Inter Governmental Organizations
Associate Member
39.
Bank Indonesia
Indonesia
Full Member
40.
Bank Islam Brunei Darussalam Berhad
Brunei
Observer Member
41.
Bank Islam Malaysia Berhad
Malaysia
Observer Member
42.
Bank Kerjasama Rakyat Malaysia Berhad
Malaysia
Observer Member
43.
Bank Keshavarzi
Islamic Republic of Iran
Observer Member
44.
Bank Muamalat Malaysia Berhad
Malaysia
Observer Member
45.
Bank Negara Malaysia
Malaysia
Full Member
46.
Bank of Japan
Japan
Observer Member
47.
Bank of Mauritius
Mauritius
Associate Member
48.
Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad
Malaysia
Observer Member
49.
Bank Saderat Iran
Islamic Republic of Iran
Observer Member
50.
Banque Centrale De Djibouti
Djibouti
Full Member
51.
Banque du Liban
Lebanon
Associate Member
52.
BNP Paribas Islamic Banking Unit
Bahrain
Observer Member
53.
Boubyan Bank
Kuwait
Observer Member
54.
Bursa Malaysia Berhad
Malaysia
Associate Member
55.
Byblos Bank Africa Ltd
Sudan
Observer Member
56.
Cagamas
Malaysia
Observer Member
57.
Capital Market Authority of Saudi Arabia
Saudi Arabia
Full Member
58.
Capital Market Development Authority
Maldives
Associate Member
59.
Central Bank of Bahrain
Bahrain
Full Member
60.
Central Bank of Egypt
Egypt
Full Member
61.
Central Bank of Jordan
Jordan
Full Member
62.
Central Bank of Kuwait
Kuwait
Full Member
63.
Central Bank of Sudan
Sudan
Full Member
64.
Central Bank of Syria
Syria
Full Member
65.
Central Bank of the Islamic Republic of Iran
Islamic Republic of Iran
Full Member
66.
Central Bank of the United Arab Emirates
United Arab Emirates
Full Member
67.
Commerce International Merchant Bankers Berhad (CIMB)
Malaysia
Observer Member
68.
Commercial Bank International
United Arab Emirates
Observer Member
69.
Commercial Bank of Dubai
United Arab Emirates
Observer Member
70.
Deutsche Bank AG
United Arab Emirates
Observer Member
71.
Doha Bank
Qatar
Observer Member
72.
Dow Jones Indexes
United States of America
Observer Member
73.
Dubai Bank
United Arab Emirates
Observer Member
74.
Dubai Financial Services Authority
United Arab Emirates
Associate Member
75.
Dubai International Financial Centre Authority
United Arab Emirates
Associate Member
76.
Dubai International Financial Exchange
United Arab Emirates
Observer Member
77.
Dubai Islamic Bank
United Arab Emirates
Observer Member
78.
Dubai Islamic Bank Pakistan Limited
Pakistan
Observer Member
79.
Dubai Islamic Insurance and Reinsurance Co.
United Arab Emirates
Observer Member
80.
Egyptian Saudi Finance Bank
Egypt
Observer Member
81.
Emirates Islamic Bank
United Arab Emirates
Observer Member
82.
Emirates Securities and Commodities Authority
United Arab Emirates
Associate Member
83.
EONCAP Islamic Bank Berhad
Malaysia
Observer Member
84.
European Islamic Investment Bank PLC
United Kingdom
Observer Member
85.
Faisal Islamic Bank
Egypt
Observer Member
86.
Farmer�s Commercial Bank
Sudan
Observer Member
87.
Financial Services Commission & Financial Supervisory Service
Korea
Observer Member
88.
First Habib Modaraba
Pakistan
Observer Member
89.
First Investment Company
Kuwait
Observer Member
90.
Fitch Ratings Singapore Pte Ltd
Singapore
Observer Member
91.
FWU Group
Germany
Observer Member
92.
Gatehouse Bank plc
United Kingdom
Observer Member
93.
Guidance Financial Group LLC
United States of America
Observer Member
94.
Gulf Investment House
Kuwait
Observer Member
95.
Hannover ReTakaful B.S.C
Bahrain
Observer Member
96.
Hong Kong Monetary Authority
Hong Kong
Associate Member
97.
Hong Leong Islamic Bank
Malaysia
Observer Member
98.
HSBC Amanah Finance
United Arab Emirates
Observer Member
99.
Industrial Development Bank
Sudan
Observer Member
100.
Insurance Commission of Jordan
Jordan
Observer Member
101.
International Leasing and Investment Company
Kuwait
Observer Member
102.
International Monetary Fund
International Inter Governmental Organizations
Associate Member
103.
Investment Dar
Kuwait
Observer Member
104.
Islami Bank Bangladesh Limited
Bangladesh
Observer Member
105.
Islamic Corporation for the Development of Private Sector Sector
International Inter Governmental Organizations
Associate Member
106.
Islamic Corporation for the Insurance of Investment and Export Credit
Saudi Arabia
Observer Member
107.
Islamic Development Bank
International Inter Governmental Organizations
Full Member
108.
Islamic International Rating Agency
Bahrain
Observer Member
109.
Japan Bank for International Cooperation
Japan
Observer Member
110.
Japan Securities and Dealers Association
Japan
Observer Member
111.
Jordan Islamic Bank for Finance and Investment
Jordan
Observer Member
112.
Khaleeji Commercial Bank B.S.C.
Bahrain
Observer Member
113.
Kuwait Finance House
Kuwait
Observer Member
114.
Kuwait Finance House (Malaysia) Berhad
Malaysia
Observer Member
115.
Kuwait Finance House-Bahrain
Bahrain
Observer Member
116.
Kuwait International Bank, Kuwait
Kuwait
Observer Member
117.
Kuwait Turkish Participation Bank
Turkey
Observer Member
118.
Labuan Offshore Financial Services Authority
Malaysia
Associate Member
119.
Lembaga Tabung Haji
Malaysia
Observer Member
120.
Malaysia Deposit Insurance Corporation
Malaysia
Associate Member
121.
Malaysian Rating Corporation Berhad
Malaysia
Observer Member
122.
Maldives Monetary Authority
Maldives
Full Member
123.
Masraf Al Rayan
Qatar
Observer Member
124.
Maybank Investment Bank Berhad
Malaysia
Observer Member
125.
Ministry of Economy and Finances
Senegal
Observer Member
126.
Ministry of Finance, Brunei
Brunei
Full Member
127.
Mitsubishi UFJ Securities Co., Ltd.
Japan
Observer Member
128.
Mizuho Corporate Bank Ltd.
Japan
Observer Member
129.
Monetary Authority of Singapore
Singapore
Full Member
130.
National Bank of Dubai
United Arab Emirates
Observer Member
131.
National Bank of Umm Al Qawain
United Arab Emirates
Observer Member
132.
National Commercial Bank
Saudi Arabia
Observer Member
133.
Nomura Asset Management Malaysia Sdn Bhd
Malaysia
Observer Member
134.
Nomura Securities Co. Ltd.
Japan
Observer Member
135.
Oasis Crescent Capital (PTY) Ltd.
South Africa
Observer Member
136.
Omdurman National Bank
Sudan
Observer Member
137.
Palestine Monetary Authority
Palestine
Associate Member
138.
Perbadanan Tabung Amanah Islam Brunei
Brunei
Observer Member
139.
Qatar Central Bank
Qatar
Full Member
140.
Qatar Financial Centre Regulatory Authority
Qatar
Associate Member
141.
Qatar International Islamic Bank
Qatar
Observer Member
142.
Qatar Islamic Bank
Qatar
Observer Member
143.
Qatar National Bank
Qatar
Observer Member
144.
Rasameel Structures Finance Company
Kuwait
Observer Member
145.
RHB Islamic Bank Berhad
Malaysia
Observer Member
146.
RUSD Investment Bank, Labuan
Malaysia
Observer Member
147.
SALAMA - Islamic Arab Insurance Co.
United Arab Emirates
Observer Member
148.
Saudi Arabian Monetary Agency
Saudi Arabia
Full Member
149.
Saudi British Bank
Saudi Arabia
Observer Member
150.
Securities and Exchange Commission of Pakistan
Pakistan
Associate Member
151.
Securities and Futures Commission
Hong Kong
Observer Member
152.
Securities Commission of Malaysia
Malaysia
Full Member
153.
Seera Investment Bank
Bahrain
Observer Member
154.
Shariyah Review Board
Bahrain
Observer Member
155.
Sharjah Islamic Bank
United Arab Emirates
Observer Member
156.
Shiekan Insurance and Reinsurance Co. Ltd
Sudan
Observer Member
157.
State Bank of Pakistan
Pakistan
Full Member
158.
Sudan Financial Services Company
Sudan
Observer Member
159.
Sudanese Banks Association
Sudan
Observer Member
160.
Sudanese French Bank
Sudan
Observer Member
161.
Sumitomo Mitsui Banking Corporation, Japan
Japan
Observer Member
162.
Syarikat Takaful Malaysia Berhad
Malaysia
Observer Member
163.
Tadamon Islamic Bank
Sudan
Observer Member
164.
Takaful Ikhlas Sdn. Bhd.
Malaysia
Observer Member
165.
The Insurance Supervisory Authority
Sudan
Associate Member
166.
The Islamic Bank of Asia, Singapore
Singapore
Observer Member
167.
The Islamic Insurance Co. Plc
Jordan
Observer Member
168.
The National Pensions Fund
Sudan
Observer Member
169.
The People Bank of China
China
Associate Member
170.
The Securities House
Kuwait
Observer Member
171.
The World Bank
International Inter Governmental Organizations
Associate Member
172.
Tokio Marine Middle East Limited
United Arab Emirates
Observer Member
173.
UBS AG, Dubai
United Arab Emirates
Observer Member
174.
UM Financial Inc.
Canada
Observer Member
175.
Unicorn International Islamic Bank Malaysia Berhad
Malaysia
Observer Member
176.
Unicorn Investment Bank
Bahrain
Observer Member
177.
Venture Capital Bank B.S.C (c)
Bahrain
Observer Member
178.
Wethaq Takaful Insurance Company K.C.S.C.
Kuwait
Observer Member

Sukuk Failing in Malasia

2009-01-18T19:17:00.000-08:00

MALAYSIAN property developer IJM Land may scrap plans to sell Islamic bonds and take out a loan instead to refinance borrowings, a source close to the matter said today.

Syariah bond issuance in Southeast Asia’s most developed Islamic finance market has been virtually frozen by worries about a global recession and sliding asset values, shattering earlier beliefs the industry would escape the downturn largely unscathed.

Islamic bond issuance in Malaysia fell to US$5.86 billion last year, compared with US$26.53 billion in 2007, according to Islamic Finance Information Service. IJM Land, the property arm of infrastructure group IJM Corp, wants to raise about RM300 million-RM400 million, said the source who declined to be identified.

“The market is so volatile it’s kind of difficult to do a bond at this kind of time,” said the source. “Taking a straight loan is much easier than doing a bond. The market risk for bonds, especially for developers, at the current time is kind of challenging.” IJM group managing director Krishnan Tan Boon Seng was not available for comment.

IJM Land had earlier wanted to issue Islamic bonds, or sukuk, to tap growing investor demand in Malaysia for syariah-compliant paper. Top Malaysian lender Maybank has estimated that sukuk accounted for more than half of the RM47 billion of corporate bonds that were issued in the country last year.

The Rest @ Business Times

Hawala Facilitates Human Trafficking Ring in Greece and Pakistan

2009-01-18T17:50:00.000-08:00

Monday, January 19, 2009
By Salman Aslam
LAHORE:

The Federal Investigation Agency has arrested three human traffickers -- including the two guilty of a failed attempt to smuggle 13 Pakistanis to Greece, who suffocated in a container in a district adjoining Istanbul on July 30 last -- The News learnt Saturday.

Sources said Mehdi Khan, s/o Muhammad Khan, caste Gujjar, a resident of PO Qila Sora Singh Tehsil, Gujrat district, was one of the arrested, who is an accused in the suffocation case. His name appears at serial number 5 on the Red Book list.

The investigators during interrogation came to know that Mehdi Khan was a general councillor, Union Council Barrila Sharif, Gujrat district.

His two younger brothers

Safdar Ali, 40, and
M Afzal, 35,

live in Greece. A sister of the accused is married to Sana Ullah, a resident of Gaigian, Gujrat district, who is also a human trafficker.

Out of the seven children, his three elder sons M Riaz, 23, M Abbas, 21, and M Namas, 16, are settled in Greece.

The sources said Mehdi Khan booked dozens of people for smuggling to Greece for Rs 500,000 to 600,000.
He used Iran-Turkey land route for the purpose. He is associated with human trafficker Haji Abdullah, s/o Agha Inayat r/o Kake Mitter, Wazirabad, Gujranwala district.
Haji is operating safe houses in Iran and Turkey.
The illegal immigrants are handed over to Haji Abdullah at Taftan on Pak-Iran border and trafficked forward through Iran.
The trafficking starts right from Balochistan to Iran and Turkey and illegal immigrants are further smuggled to Greece through boats.
Mehdi Khan was involved in FIA case numbers 27 and 34 registered with its office in Gujranwala.

A number of enquiries based on deportees’ statements are pending against him to be converted to cases. The other human trafficker arrested by the FIA has been identified as Mamoon-ur-Rasheed alias Steno s/o Subay Khan, caste Mayo, r/o Begowal, Tehsil Sambrial, Sialkot district.

His arrest had been a challenge, given his precautions. He remained a mystery for the last many years as he never met any intending immigrant, or other agent or even any member of his own network. He was arrested on Jan 14, 2009. A case was registered with Sadar Kamoke Police Station against him, his brother Javed and two others — Basharat and Jameel.

The accused also resorted to firing to avoid arrest. The sources informed The News that Mamoon was involved in human trafficking from Pakistan to Europe through land routes in Pakistan, Iran, Turkey and Greece.

He set up a network of sub-agents in the country as well as abroad. He is a trafficker wanted in the highest number of FIA cases.

The accused had got issued two Computerised National Identity Cards in the names of Mamoon and Zahid Rehman.

His three brothers are living abroad: Javed, 30, in Malaysia and Parvaiz Ahmed, 25, and Rashid Ahmed, 20, in Spain. He is involved in 15 cases registered with AHTC Police Station, Gujranwala, bearing FIR numbers 601, 613, 615, 616, 618, 764, 818, 925 of 2006 and 345, 360, 361, 362, 363, 401, 402 and 403 of 2007. Other 15 cases bearing FIR numbers 36 to 50 have now been registered with AHTC police on the basis of deportees’ statements. Owing to his frequent involvement in the illegal business and number of persons he has smuggled, his name appeared in the Red Book 2007.

How it worked

The accused used to deal with intending immigrants directly or through his sub-agents demanding payment ranging from Rs 600,000 to Rs 700,000 preceded by Rs 100,000 advance payment.
The illegal immigrants were handed over to other agents across the unfrequented land routes in Pakistan, Iran, Turkey and Greece.
When illegal immigrants reached their destination, their families paid the remaining amount to the accused through an agent ‘Chacha Rafique’—the owner of Hawala office at Lalamusa, Gujrat district.
The accused handed over intending immigrants to agents based in Karachi, whom he paid Rs15,000 for each.

The Rest @ The News International (Pakistan)

Islamic Banking in Crisis

2008-12-23T08:00:00.000-08:00

Investment bankers from London were flying into once-booming Dubai last night as the bailout of the Gulf state’s banking sector began.

The bank and the finance ministry of the United Arab Emirates have established a AED120 billion emergency funding facility .

Global Investment House KSCC, Kuwait’s biggest investment bank, declined to the lowest in more than four years after appointing HSBC Holdings to renegotiate loans owed to foreign lenders.

Citigroup Inc., the global bank that got a $45 billion government bailout, “recently” arranged more than $8 billion of financing for government-owned companies in Dubai.

Dubai Holding Commercial Operations Group LLC, a company owned by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, said it repaid 2.4 billion dirhams ($650million) of maturing bonds and loans from its own cash flows.

Unnao Hawala Cash Captured while moving from Uttar to Sarjah India

2008-11-08T19:31:00.000-08:00

Lucknow, Nov 9 (IANS) Two people were arrested from the Amausi airport in Uttar Pradesh capital late Saturday night while they were allegedly trying to smuggle Hawala money worth Rs.16 million, the police said.

The duo, who were at the airport to take a flight to Sharjah, were caught by the officials of the Directorate of Revenue Intelligence (DRI) under the Foreign Exchange Management Act (FEMA), according to police sources.

“We only know that the arrested persons belong to Unnao and the local police was not involved in the entire operation as it is a matter related to DRI,” Akhil Kumar, senior superintendt of police Lucknow, told IANS over phone.

The paper was in Saudi Ryals and Indian Rupees

The Rest @ ThaIndian

Hawaladar Convicted of Conspiracy Money Laundering and Terrorist Financing

2008-11-06T18:43:00.000-08:00

MONEY REMITTER SENTENCED TO OVER NINE YEARS FOR MONEY LAUNDERING CONSPIRACY AND CONCEALING TERRORIST FINANCING

Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Saifullah Anjum Ranjha, age 45, a Pakistani national residing in Washington, D.C. and Maryland, today to 110 months in prison, followed by three years of supervised release, for conspiring to launder money and for concealing terrorist financing, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Garbis also signed a preliminary order forfeiting $2,208,000 of Ranjha's assets.

"The hawala system can be used by criminals to launder money without using financial institutions, by giving the money to a person in the United States and picking it up in a foreign country," said U.S. Attorney Rod J. Rosenstein. "Identifying hawala networks that violate the law often requires the cooperation of international authorities."

"As the U.S. financial industry strengthens its anti-money laundering programs, the use of the hawala system to move illicit funds becomes increasingly attractive to terrorist and other criminal organizations," stated Scot R. Rittenberg, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement. "We will continue to work jointly with our domestic and foreign law enforcement partners to investigate the movement of illicit funds via the hawala system."

"Terrorist networks need money to be effective. Fortunately, IRS-CI is effective at following the money to find the source of the crime," said Internal Revenue Service-Criminal Investigation Special Agent in Charge, C. Andre' Martin.

According to his guilty plea, Ranjha was born in Pakistan and became a lawful permanent resident of the United States in September 1997.
He operated a money remitter business in the District of Columbia known as Hamza, Inc.

A cooperating witness, acting at the direction of law enforcement, held himself out to Ranjha and his associates to be involved in large scale international drug trafficking, international smuggling of counterfeit cigarettes and weapons.

He also represented that he was providing assistance and financing to members of al Qaeda and its affiliated organizations and their operatives.

From October 2003 to September 19, 2007, the cooperating witness gave Ranjha and his associates a total of $2,208,000 in government funds in order to transfer the monies abroad through an informal money transfer system called a "hawala," using a network of persons and/or businesses to transfer money across domestic and international borders without reliance upon conventional banking systems and regulations.

The cooperating witness represented that the monies were the proceeds of, and related to, his purported illegal activities and Ranjha laundered these funds believing they were to be used to support those activities.

Ranjha was the primary point of contact for the cooperating witness and received the bulk of the monies from the cooperating witness, for a total of 21 hawala transactions in amounts ranging from $13,000 to $300,000.

Most of the monies were turned over to Ranjha in locations in Maryland.

On a few occasions the cooperating witness met Ranjha and other co-conspirators at Hamza, Inc. to provide monies for a particular hawala transfer.

Ranjha arranged with his associates for the equivalent amount of monies, minus commissions, to be delivered to the cooperating witness, his third party designee, or a designated bank account in Canada, England, Spain, Pakistan, Japan and Australia.

Ranjha kept a commission of approximately five percent of the amount of currency sought to be transferred on each occasion.

Other conspirators involved in a particular transaction retained an additional commission of between three to five percent of the transaction amount.

All the funds transferred abroad were picked up by cooperating individuals and returned to the Government.

United States Attorney Rod J. Rosenstein thanked U.S. Immigration and Customs Enforcement, the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation for their investigative work.

In addition, Mr. Rosenstein thanked our international partners, the Spanish National Police; Australian Federal Police; London Metropolitan Police; and Royal Canadian Mounted Police for their help.

Mr. Rosenstein commended Assistant United States Attorney Christine Manuelian who is prosecuting the case.

Source: The US Department of Justice

Whu do Muslims Support Hawala and Charity Operations that Support Jihad?

2008-11-05T14:44:00.000-08:00

A new article on SSRN attempts to address the question: why do individuals support the work of charities that support jihadist operations, even when they may not agree with these organizations' agenda? The paper, entitled "Microfinancing Terrorism: A Study in Al Qaeda Financing Strategy", by Tolga Koker and Carlos Yordan (my thesis adviser while at Hamilton College), asserts that social pressure--rather than ideology--motivates individuals to donate to charities that may be affiliated with the global jihadist movement.

To test this claim, the authors construct a social choice model, where individuals derive different utilities from their private preferences (to support a jihadist movement) versus their public preferences (community reputation). The authors conclude that because Middle Eastern cultures value the collective over the individual, people will eventually acquiesce to social pressure and donate to these charities because the utility gained through group participation outweighs that from individuality.

This a provocative argument, as it suggests there may be an endless supply of financing to jihadist groups like al-Qaeda, as Muslim may always submit to social pressure and contribute funds. While there is much value in examining the social dynamics within Muslim culture that lead to the "microfinancing of terrorism",

I am not convinced that the dynamic presented by the authors is what actually provides the bulk of support for these illicit financial networks. More likely, these groups are simply exploiting the global hawala system to laundering and redirect funds.

The Center for Contemporary Conflict has presented excellent work discussing how jihadist groups exploit hawla, and more recent studies have shown this network to be extremely efficient at moving money around the world.

This exploitation can occur completely outside the purview of the individuals using the system, which would conflict with the idea that social pressure is motivating direct financing of these groups.

Put simply, many Muslims can be supporting groups like al-Qaeda without even knowing it.

The Rest @ Zero Intelligence Agents

Hawala is the Bank of the Somali Business Woman

2008-11-02T15:11:00.000-08:00

NAIROBI, Nov 1 (IPS) - On the fifth day of every month a group of women entrepreneurs gather to share their experiences and discuss matters of trade. What makes this exceptional is that the women are from south-central Somalia and they meet in Mogadishu, one of the world’s most devastated and dangerous cities.

With 780 registered members, most of them from the Banadir region, the Banadir Businesswomen’s Association the association is headed by a veteran businesswoman, Shamso Abdulle. Banadir is of the eight administrative units in south-central Somalia which includes the capital Mogadishu.

A mother of nine, covered in a fashionable head-to-toe Islamic veil or hijaab, and insistent on speaking only in her mother tongue Somali, Abdulle is an unlikely business success story. The east African country where she lives has not had a central government for over 17 years.

The city where she lives has been ravaged by an unending internecine war between clannish warlords and by foreign military interventions.

‘‘When I started my business of importing furniture and other goods from India in 1984, Somalia was a different country,” Abdulle told IPS in Nairobi last week where she was attending a two seminar on the war economy of Somalia’s capital, organised by the Norwegian Institute for Urban and Regional Research.

‘‘For six years I was able to do normal trade and earn enough to be independent and expand my business to other places like Dubai.”

Then, in 1991, the civil war erupted. The state collapsed and the era of the warlords began. Like most other businesspeople, Abdulle had to abandon her business and flee the city.

‘‘I had to leave Mogadishu and live with my family in the bush for months. My savings were disappearing fast. As soon as the fighting receded a bit, with the intervention of a UN mission, I returned to the capital to explore the possibility of resuming trade,” she recalls.

On her return she found that the rules and norms of business had completely changed. The Mogadishu port was closed and would not open again until 2006, which forced businesses to other distant ports like El Ma’an, Merka and Kismayo.

Instead of government regulations and institutions, traders had to negotiate safe passage for their goodsùand for themselvesùwith an assortment of militias. Money transfers through banks had been replaced by the informal hawala, or hundi, system.

It was difficult for women to get loans from the big businessmen who saw no assurance of repayment or getting a return. The public’s purchasing power was down; the violence and insecurity was high, as it remains to this day.

But there was also a unique opportunity for women to step into business.

‘‘One of the main reasons why there are so many women traders in Mogadishu is because so many men died in the conflict or lost their government jobs. Also, working as street vendors or shopkeepers is considered beneath the dignity of men who before the war were working as doctors, lecturers and bureaucrats in Mogadishu,” explains Abdulle.

The Rest @ Global Intelligence

India Hawalas Undermining the Rupee Exchange Rate

2008-11-02T14:48:00.000-08:00

American fund managers investing in the emerging markets today are fundamentally assuming that, over a given time horizon, profits from equity investments will far exceed losses from currency devaluations. That assumption needs to be contextualized in the reality that, if investments in emerging markets like India were made on a fully hedged (forex risk) basis today, mutual funds would be forced to realize significant losses in their financial statements at the very outset.

The Indian rupee far forward rate, to offset currency risk on 3-year equity investments, will result in a net loss of about 24% today for dollar investors. Thinly traded 5-year contracts to purchase dollars are being offered at a premium of 35%. Few fund managers are known to actually offset foreign exchange risk unless, of course, they are confronted with panic conditions, like those witnessed this month.

Forward premiums apart, the rupee has lost 20% of its value against the dollar during the course of this year. There are several reasons to anticipate another 15% move downwards by early 2009 and to predict a further widening of forward differentials. Interestingly, the single most powerful indicator of the fate of the rupee is the behaviour of “hot” money being generated every day by India’s huge and powerful underground economy.

Dubai’s “hawala” traders claim that over $300 million has left India’s shore this month alone; hawala currency exchanges are executed outside mainstream banking channels with an exceptionally high degree of anonymity. India’s central bank, which periodically intervenes in the inter-bank foreign exchange markets for limited durations, has no ability whatsoever to control the flow of cash in the hawala system. Further bad news from the global economy, like yesterday’s downgrade in Pakistan’s credit rating, will only increase hot money outflows.

Besides, the only inference one can draw form statistical data is that the Indian economy is now in reversal, as opposed to being in the midst of a cyclical downturn as many asset managers would like to believe, with several sectors contracting at an alarming rate. The default rate amongst 30 million credit card holders is likely to breach 22% before the end of this year, by conservative estimates. The crisis in housing will force most of India’s leading real estate companies to renege on their debt service obligations in forthcoming weeks. Speaking of consumer confidence, a recent survey showed that more than 50% of working Indians fear losing their jobs in 2009. Darkening the scenario are rising food prices, which have been steadily chipping away at the value of middle- and lower-income family incomes since the commodity boom began in mid-2007.

Before fund managers invest in India or, for that matter, in other emerging markets, they should ask themselves the same three questions which the holders of underground capital, the ones with most at stake on a daily basis, ask themselves each morning: How much of the phenomenal growth in consumer spending power in this decade can be attributed to easy credit? Is the debt-induced fairy tale coming to an end? And, perhaps most importantly, are poverty levels in the urban and rural centres creating the potential for deep-rooted social unrest?

The short India trade is justified by both, currency risk arbitrage considerations and the status of the Indian economy. Such a short trade may not be possible to execute in the equity exchanges. But the short India canvas is wide enough: buy synthetic shorts on exchange-trade India funds and shares on each rally, buy stock index puts in similar fashion, and buy 3-year sovereign default risk and far forward dollars now.

The Rest @ Quoteplatform

al Harbi Notes from 2004

2008-10-28T11:25:00.000-07:00

JEDDAH, 17 July 2004 — Saudi authorities took a wanted militant into custody after he finally arrived from the Syrian capital where he had earlier surrendered to the Saudi Embassy, according to his brother, Fawaz Al-Harbi.

Ibrahim Al-Sadek Al-Kaydi Al-Harbi, 33, who is not on the list of 26 most wanted terrorists, is the fourth militant to turn himself in under a one-month amnesty offered by Custodian of the Two Holy Mosques, King Fahd, on June 23 to extremists who surrender.

Fawaz said Ibrahim called the family a week ago from Damascus, expressing his desire to give himself up.
Ibrahim told them that he had gone to the Saudi Embassy in Syria to hand himself in but officials there had asked him to wait at his house until they made contact with details for his return to the Kingdom. After waiting for four days, Ibrahim decided to make the call and arrange everything from here.

“I called one of my friends that helped me contact Assistant Interior Minister Prince Muhammad ibn Naif, who made the necessary arrangements within 24 hours. Ibrahim handed himself in and arrived in Saudi Arabia on Thursday. I haven’t met him yet,” Fawaz said.

Prince Muhammad ordered the arrangements for Ibrahim’s return to be sped up after the Saudi Embassy in Damascus failed to deliver promptly, he said.

Al-Harbi reportedly went to Afghanistan during the Soviet invasion in the 1980s and was also in Bosnia, where he was wounded, according to his brother. He returned to Saudi Arabia before dropping out of sight in the wake of the Sept. 11 attacks in the United States.

Fawaz claimed his brother is not a member of Osama Bin Laden’s Al-Qaeda terror network and had no links with the extremist cells blamed for a wave of violence, which has killed some 90 people and wounded hundreds since May 2003.

Another brother, Abdul Ghaffar who worked at the Passport Department said Ibrahim had come to him in 2001 before disappearing and asked for a new passport. Abdul Ghaffar said after checking his file, he discovered that Ibrahim was wanted by security authorities and had a 10-year ban on traveling abroad.

Thirteen militants on the most wanted list remain at large, down from the original 26 when it was issued last December. The others have been either killed in clashes with security forces or surrendered, including one who gave himself up under the amnesty offer.

On Tuesday, Khaled ibn Odeh ibn Mohammed Al-Harbi, alias Abu Suleiman Al-Makki, presumed to be a top Al-Qaeda figure close to Osama Bin Laden, was flown back to Saudi Arabia after turning himself in to his country’s embassy in Iran.

Source: ArabNews

al Harbi Holding Company

2008-10-28T11:01:00.000-07:00

Rhyadd, Saudia Arabia Based Holding Company

CEO: Ahmad al Harbi
CEO, Ahmad Al Harbi Group

One of 20 Doners listed on al Qaeda's Golden Chain List

L'Investigateur notes, "L'Houssaine Kherchtou testified on February 21, 2001, during the trial of suspected al-Qaida militants in connection with the bombings of the American embassies in Kenya and Tanzania on 7 August 1998, that he was welcomed at Miram Shah guest house in Pakistan before joining Al-Qaida by 'Abu Ahmed al Harbi'."

(The Golden Chain -Wikipedia)

Holds Three International Companies:

Al Harbi Trading and Contracting Company: Oldest and International Development Company, worked on Projects Throughout the Middle East
DIXU International, Shanghai, China headed by Fawaz al Harbi: buys Mechanical and Electrical Equipment from China for the Saudi Market
Arabella - Real Estate Development Company in the Czech Republic
Ready Batch Concrete Company Abu Dahbi - Concrete
Saudi Marble and Granite Factory
Al Harbi Company for Education Projects -Education Consultants
HEMCO Electromagnetic Equipment (seems to be about water purification and Treatment and importing Chinese Hardware)

They also appear to be partnered in Several Saudi Arabian Shopping Malls

MedMeans Saudia Arabia

2008-10-28T10:35:00.000-07:00

Med Means Trading (MMT) is a Riyadh based service medical company, two years old

Quality healthcare products at an unbeatable quality and price
To reach out our valued customer/ endorser in order to understand their needs and to mobilize all our means and resources to supply the right products at right prices at the right time an objective to help the suffering patient in his critical time of need.

Med Means Trading

Future Plans:

As expressed earlier, MMT has highly ambitious plans to add more and more dedicated, efficient and result oriented professionals to its existing team in order to further strengthen and potentate this component to meet the fast growing challenges of the future markets.

We also have plans to create new departments like

IT,
Research and business development,
Tender department,
Training department
and many more.

In order to strengthen and enhance our activities to meet the ever increasing challenges of growing competition in the health sector. We know, we are in competition with big giants in the line, but they are the history and MMT is the future.

Negotiations are on with many world class manufacturers to add on many more lines of sophisticated, high tech medical products from all over the world. Negotiation are also underway to establish collaboration with manufacturers from all over the world in order to obtain the technique of manufacturing and the art of know-how to manufacture selected products locally to make them more economic and handy.

In tune with MMT ambitious plans of expansion, negotiation are at the final stage with a group of renounced business groups in the Kingdom for business collaboration/ association which, if capitalized will further boost its energy, accelerate its velocity, enrich its professional culture and enhance its capacity to serve its valued customers better.

Meet the Staff

Med Means Technical staff

Mr. FALEH ALI AL HARBI is currently the General Director of Med Means Trading,

a former Commercial Director of Al Harbi Holding Company (2006),

Executive Director Logistic Service – National Guard Health Affairs, KAMC (2004), Administrator, Logistic Service – King Faisal Specialist Hospital & Research Center (1999), Administrative Assistant and Acting Administrator, Logistic 1987) ,)King Faisal Specialist Hospital and Research Center Manager, Cargo Department – King Faisal Specialist Hospital & Research Center (1982),
Head of Supplies – Ministry of commerce Saudi Arabia (1968), Represent of the Kingdome of Saudi Arabia in many international Exhibition in Europe, Africa and Asia as Director of Saudi Arabia Exhibition.

NABIL FALEH AL HARBI graduated with Sales and Marketing from the Institute of Public Administration is currently the Sales Manager of Med Means Trading. He is former Shares Broker in Al Rajhi Bank (2004). And under took on-job-training in Abbott Laboratories in Riyadh, Saudi Arabia(2003).

RAVI MENON has over 18 years career spanning in the Kingdom of Saudi Arabia by working in the medical field. A qualified commerce graduate from India and an Associate of the Institute of provisional Managers from UK since 1984. His expertise covers ranging from:

- Equipping, installation and mobilization of new medical clinics and small hospitals both in private and government sectors.

- Conducting strategy survey and how to structure and develop a feasibility study to be of maximum use any organization for medical projects.

- Investment appraisal methodologies, evaluating appropriate technical know related to the medical disposable production.

- Determining the size of the market and exploring its prospects and identifying the sources of market data.

- Organize geographic distribution of target customer base and to develop the infrastructure for the sales and marketing of medical equipment and disposables.

Source: MMT Website

Islamic Banks to Gain Through the WEstern Financial Crisis

2008-10-25T12:42:00.000-07:00

By Asma Alsharif

JEDDAH, Saudi Arabia, Oct 25 (Reuters) - The global financial crisis is an opportunity for Sharia-compliant Islamic banking to further its position internationally, bankers said at a forum in Saudi Arabia on Saturday.

Islamic banks have been barely bruised by the global credit crisis so far, although falling property and commodity prices and slowing economies are starting to affect the sector.
But bankers at the forum, on how the world finance crisis could affect Islamic banking, saw the sector strengthening.

"It is a must for Islamic finance to seize the opportunity that came with this global financial crisis," Ahmad Ali, president of the Jeddah-based Islamic Development Bank (IDB) said at the discussion organised by IDB.

"Global investment banks should be set up that realise the Islamic economy and offer the world a new vision and different way to manage assets, invest wealth and create products."

Sharia-compliant finance bans the receipt of interest and investments in companies dealing in alcohol, gambling and pornography.

Islamic financing deals are backed by assets, commonly real estate and commodities, due to the Sharia requirement that transactions must involve real economic activity.

There are more than 300 Islamic financial institutions worldwide and the sector is valued at about $1 trillion, just a fraction of the conventional global banking industry.

The growth of Sharia banking has been fuelled by an increasing focus on Islamic values and cash from Middle East oil exporters hungry for assets that comply with Islamic principles.
The falling oil price could affect that.

But with Muslims making up almost a fifth of the world's population, the Islamic industry was seen as offering plenty of room for longer-term growth.

"Regulation by itself is not the answer," a Saudi Islamic banking consultant said.
"Regulation is necessary but it has to be complemented by a structural change in the financial system and this is the structural change that Islam has suggested."

Saleh Kamel, a Saudi entrepreneur who heads the General Council of Islamic Banks, said the global crisis suggested Islam was the "third way" after the failure of great ideologies.

"Perhaps through this crisis, that is a great evil for the world, God will lead us to the school of moderation," he said.

"Communism has failed and capitalism failed, and only now are they starting to admit this failure," he said. (Writing by Andrew Hammond; editing by Anthony Barker)

The Rest @ the Guardian. UK

Outflow from Pakistan Hawalas Exceeds Inflow - Study

2008-10-21T09:16:00.000-07:00

The ‘hawala’ drain- by Ikram Sehgal

Of all the problems besetting us today nothing is more critical than the economy, particularly the rapid evaporation of our foreign exchange reserves into thin air. We were on the verge of defaulting when 9/11 made us the temporary darling of the West.

While prudent economic polices did contribute to our economic resurgence and the building up of our foreign exchange reserves, our so-called “brilliant” economic team was neither intellectually honest nor innovative, its reputation built on debt forgiveness, debt rescheduling, aids and grants and the massive infusion of foreign funding to fight the “war against terrorism.”

Shaikh Nayhan Bin Mubarak Al Nayhan sponsored a study in 2004 to ascertain why Pakistan was lagging behind in home remittances. When Shaukat Aziz was personally approached by Bashir Tahir, the CEO of Dhabi Group, the prime minister gave wholehearted support to the study. In actual practice, neither he nor his administration extended anything more than mere lip-service.

The study group headed by Pervaiz Shahid carried out physical research on the ground in Pakistan, Sri Lanka, Bangladesh and the Philippines. It would have been ideal to include India, but that country was deliberately left out.

In contrast to the studied (and motivated) indifference in Pakistan, the Philippines government gave wholehearted support. 3.2 million Filipinos were registered as employed abroad in 2003, 82 percent of them women.

A very efficient department has representative centres in all small cities and towns in the many Islands of the Philippines. Not only giving good information about possible employment abroad, these centres requisition the services of these employed abroad when visiting home on leave to give information about conditions in the the country where they were working.
The Philippine Central Bank invested money in a particular software meant to disburse money instantly to the many branches of many banks on one software platform.
This software was given free to the banks so as to commonality. The minimum hardware requirement to support the software was laid down.
The banks remained open 24 hours seven days a week. If anyone remitted money anywhere in the world before midnight Philippine time, it was instantly transmitted to the account of the recipient next day. Obviously this built up trust in the home banking system for Filipinos abroad and they did not go outside the banking system.
The results were tremendous. $8.6 billion were remitted through banking channels home in 2003, approximately $2,700 per expatriate Filipino per year.

The department concerned with coordinating emigrants in Sri Lanka was not as efficient as that in the Philippines, but good enough for the 900,000 Sri Lankan workers employed abroad to remit $1.25 billion annually, with each Sri Lankan having sent approximately $1,400 in 2003.

The banking system is used more than hawala, and a negligible amount of money is transacted outside banking channels.

Bangladesh in 2003 had 2.3 million people sending $800 million annually, about $350 per head. Like in Pakistan, Bangladesh has a very active hawala trade outside the system.

Pakistan was easily the worst. In 2003, with 3.5 million Pakistanis abroad sending only $900 million per annum, or approximately $260 per head. This is one-tenth of what was being sent by expatriate Filipino and one-fifth of that being remitted by the average Sri Lankan.

According to available information, non-resident Indian was sending $4,000 per head in 2003.
Bangladesh has shown considerable improvement, with 2.5 million sending around $9 billion in 2007 ($3600 per head), double the amount sent by the 3.7 million Pakistanis sending $6.1 billion ($1650 per head) in 2007.

Hawala is OK as long as there is inflow, unfortunately there is greater outflow from Pakistan.

The hawala mafia has great influence in the Establishment, and for obvious reasons. There is so much money to go around, and the corrupt have to send their ill-gotten gains abroad, for purchase of assets and property outside Pakistan.
The hawala system is estimated at around $14-15 billion, which means about 8-9 percent “service charges” or “commission” of Rs5-6 for every dollar. The hawala facilitators earn about $1.2 billion, and the country loses $15 billion annually, or $45-50 million every working day.

Pervez Musharraf did not do what he, and before him Zia-ul-Haq, could have easily done through authoritarian rule: eliminate the hawala trade as Indira Gandhi did as a civilian dictator when she imposed emergency rule in India in 1975.

To eliminate the hawala trade, Mrs Gandhi jailed all hawala traders, seized all their propertes and bank accounts and the funds en route. Today the Indian expatriate on an average sends $4,000 per head annually, all through the banking system. Given the 8-9 million non-resident Indians abroad, this comes to a cool $30-35 billion annually.

This country’s exchange value has already dropped about 40 percent in the last couple of months. Before it goes into a free fall somebody must do something to prevent the outflow.

We do not have any time left, it has to be done, and now! If 3.7 million Pakistanis were to send $4,000-4,500 each annually (about $350 per month) it would amount to about $15-20 billion annually.

When foreign exchange dealers are put out of business permanently, there will be no outflow of the $15-20 billion going out presently.

If Asif Zardari really means “Pakistani Khapay,” he must mandate Shaukat Tareen to stop this illegal outflow by any means possible, and as soon as possible

The writer is a defence and politicalanalyst. Email: isehgal@pathfinder9.com

Source: The News, 21/10/2008

The Rest @ Pakistani Friends

The Golden Chain

2008-10-19T19:09:00.000-07:00

The "Golden Chain" or a list purported sponsors of al Qaeda that was seized in March of 2002 raid by Bosnian police authorities of the premises of the Benevolence International Foundation in Sarajevo. The list includes at least 20 top Saudi and Gulf State financial sponsors including bankers, businessmen, and former ministers. Part of the list included computer file titles "Tarekh Osama" or "Osama History", but the appellation "Golden Chain" itself is due to al Qaeda defector Jamal al-Fadl, who vouched for its authenticity; the FBI later also pronounced the document as genuine.

Most accounts are vague on what year the Golden Chain document was written; some say 1988. but US government counterterrorism advisor Richard Clarke says it dates from 1989. The "Golden Chain" was presented by the United States Government case USA v. Arnaout filed on January 29, 2003 and in other legal filings, which would cause its veracity and meaning to be brought under further scrutiny.

The Rest @ Wikipedia

From a recent post at the Shimron Letters:

While the Golden Chain List been set aside in several court cases where it has been used as evidence of al Qaeda connections, even as last as 2006, this does not mean that the names and companies found on the list are not of interest in on going investigations into al Qaeda funding.-Shimron Issachar

Shimron goes on to quote an article from Free Press, but a distillation of the company and people names follow:

Saleh Abdullah Kamel.

Confirmation that the Bin Laden family has been a major contributor to Usama, despite its statements denying such support
Involvement of bankers representing the three largest Saudi banks
(National Commercial Bank, Riyad Bank, Al Rajhi Banking and Investment Corp)
Involvement of former oil ministers Sheikh Yamani and Taher-Involvement of most of them in charity organizations as founders or board members

AL QAIDA DONORSSULEIMAN AL-RASHIDAl-Rashid Trading & Contracting (Riyadh, Saudi Arabia)

ABDEL QADER BAKRI (ABDULKADER [AL] BAKRI)CEO, Bakri Group of CosCEO, Al Bakri International Power Co. Ltd (Jeddah, Saudi Arabia)

CEO, Al-Bakri Shipping Group (Jeddah, Saudi Arabia)
CEO, Alkhomasia Shipping and Maintenance Company Ltd (Jeddah, Saudi Arabia)
CEO, Red Sea Marine Services (Jeddah, Saudi Arabia)
CEO, Diners Club International (Jeddah, Saudi Arabia)
Bakri Group formed in April 2002
a JV with the Malaysian International Shipping Corporation (MISC) to operate in Middle-East countries, including Yemen. MISC leased super tanker MT Limburg when it was attacked on October 6, 2002, coming from Ra's Tannura (Saudi Arabia).

BIN LADEN BROTHERS Saudi Binladin Group (SBG)

Bakr Bin Laden

YOUSIF JAMEEL (YOUSSEF [YOUSEF] JAMEEL)

CEO, Abdul Lateef Jameel Group (donated SR8 million to support Saudi Red Crescent Society's relief work in Kosovo in 1999)
Former Board member, major shareholder, Global Natural Resources Inc. (Houston, Texas)

IBRAHIM AFANDI (IBRAHIM MUHAMMAD AFANDI)

Board member, Ibn Baz Foundation (President: Prince Salman, VP: Abdulaziz bin Fahd
Board member, IIROChairman, Al Afandi Establishment (Jeddah, Saudi Arabia)
CEO Al Afandi Germany (Frankenberg)
CEO, Sky Muzn Holding Co. BV (Netherlands)
CEO, Saudi Industrial Services Company (Sisco) with partners Xenel Industries and Dallah Al Baraka
Founder, Great Saudi Development & Investment Co. (GSDIC)
Founder, Arabian Company for Development and Investment Limited (ACDIL)
Chairman, National Committee of Saudi Contractors
Partner, African Company (Sudan), with Al Rajhi Bank and Dallah Al Baraka
Former General manager and shareholder of Al Amoudi Group
Owner, Gang Ranch (Canada), second largest ranch in North America
Owner, Skylight Corp, Georgia, USA
Owner, BSA Investments (complaint from LTV Steel Company, Inc) US address: 6914 Los Verdes Dr Apt 6, Rch Palos Vrd, CA 90275

SALEH KAMEL (SALEH ABDULLAH KAMEL) Born in 1941, Mecca, Saudi Arabia

CEO, Dallah Al Baraka (Jeddah, Saudi Arabia) - 3rd largest Saudi company
Chairman Arab Radio & Television (ART)
Founding member and shareholder, Al Shamal Islamic Bank (Khartoum, Sudan
Partner, Tamlik Company Ltd (with Mohamed Binladen Co., Saleh Bin Laden)
Shareholder, Jordan Islamic Bank
Vice Chairman Bank Al Jazira Founder, Iqraa International FoundationAL-RAJHI (SULEIMAN ABDULAZIZ AL RAJHI)
Board member, IIROBoard member, Ibn Baz Foundation
CEO, Al Rajhi Banking and Investment Company (Riyadh, Saudi Arabia) - 9th largest Saudi company, 4th largest Saudi commercial bank

AL-JUMAIH (MOHAMMAD BIN ABDULLAH AL-JOMAIH)

Board member IIRO
Board member, Ibn Baz Foundation
Member of the Committee for collection of donations for supporting the Intifada (Chairman Prince Salman
Chairman First Islamic Investment Bank+300 companies
Al Birr donor
Bosnia donor

AL-SHARBATLY (ABDULRAHMAN HASSAN [ABBAS] SHARBATLY)

Founder and board member, Riyad Bank (Riyadh, Saudi Arabia) - 7th largest Saudi company and 2nd largest Saudi commercial bank (Abdulrahman A. Al-Amoudi, Senior Executive Vice President)
Offices in Houston, Texas
(Riyad Bank Houston Agency, 700 Louisiana, suite 4770, Houston, Texas 77002, US
Board member, Beirut Ryad Bank SAL (with Prince Khaled bin Turki and Abdullah Taha Bakhsh)
Board member, Saudi Arabian Refinery Company (Chairman Prince Khaled bin Turki, directors include Kaaki (bin Mahfouz) and Al Rajhi)
Shareholder, Middle East Capital Group (shareholders include Abdullah Taha Bakhsh,

Henry Sarkissian

-President Saudi Binladin Group International-, Sami Baarma -National Commercial Bank-
CEO, Saudi Arabian Marketing Agencies and Company Ltd (Shareholder : Salem Mohammad Bin Laden)
Ferrari, Porsche, Audi and Volkswagen deale Shareholder,
Egyptian Gulf BankShareholder
Golden Pyramids Plaza CoShareholder
Savola Snack Food Co. Ltd (with Saleh bin Mahfouz and Abdullah Taha Bakhsh

MOHAMED YOUSEF AL-NAGHIAl Naghi Brothers Co (Jeddah, Saudi Arabia)

BIN MAHFOODH (KHALID BIN MAHFOUZ)

Former COO, BCCI
Former CEO, National Commercial Bank, 1st Saudi commercial bank
Founder, Muwafaq Foundation
Founder, International Development Foundation

ABDEL QADER FAQEEH (ADEL FAQIH)

Board member, Ibn Baz Foundation
Chairman, Bank Al Jazira
Chairman, Savola Group (Sharbatly), merged with Azizia Panda (Walid bin Talal) - 13th largest Saudi company
Chairman, Makkah Construction & Development Company

SALAH AL-DIN ABDEL JAWAD (SALAHUDDIN ABDULJAWAD)

CEO, General Machinery Agencies (Jeddah, Saudi Arabia)
Agent for General Motors, Wacker Corp, Mannesmann, Renault (RVI),
Opel Board member,
United Gulf Industries Corp, Manama, Bahrain (with Khalil Bin Laden)
Partner, Savola Snack Food Co. Ltd (with Saleh Bin Mahfouz, Abdullah Taha Bakhsh, Prince Mishail Bin Abdullah Bin Turki, Abdulrahman Sharbatly)
Founder of several scholarship funds (Berkeley, Oxford -including the Salahuddin Abduljawad Fellowship in Islamic Art History) through Barakat Trust (UK) and Barakat Foundation (USA) with Xenel Industries Ltd and Khalid Alireza

AHMAD TURKI YAMANI (AHMED ZAKI YAMANI)Born in 1930, Mecca, Saudi Arabia, Son of former Saudi Chief Justice

Former Saudi minister of petroleum and mineral resources
Former director, ARAMCO
Founder, Investcorp (Board members include Abdullah Taha Bakhsh)

ABDEL HADI TAHER (ABDUL HADI TAHER)

CEO, Taher Group of Companies, 52nd largest Saudi company
Owner, Marketing General Trading Corp (Jeddah, Saudi Arabia)
Shareholder, Arab Company for Hotels & Contracting Ltd (with Ahmed Zaki Yamani
Former Minister of State
Former Governor of the Saudi state oil company Petromin, under responsibility of Ahmed Zaki Yamani
Former director, Saudi European Bank (Paris), held 25% of the bank shares along with Ahmed Zaki Yamani

MOHAMMED OMAR???AL KUWAIT???AHMAD AL HARBICEO, Ahmad Al Harbi Group(L'Houssaine Kherchtou testified on February 21, 2001, during the trial of suspected al-Qaida militants in connection with the bombings of the American embassies in Kenya and Tanzania on 7 August 1998, that he was welcomed at Miram Shah guest house in Pakistan before joining Al-Qaida by "Abu Ahmed al Harbi").

AL ISSAEI (MOHAMMED AL-ISSAI)

Board member, Saudi Research & Marketing Company (with Mohammed Hussein al-Amoudi, Saleh Abdullah Kamel, Abdullah Bin Khalid Bin Mahfouz, Dallah Albaraka Group) - 20th largest Saudi company
CEO, Al Issai Trade Company (Daimler-Chrysler representative)
Deputy Chairman, Arab Cement Company (shareholders include Binladin Group, Bin Mahfouz, Al Rajhi -
Chairman: Turki Bin Abdulaziz Al Saud)

HAMAD AL HUSAINI (HAMAD AL HUSSAINI)CEO, Akel Trading Company

CEO, Akel Agricultural Investment Company LLCCEO, Al Hussaini and CompanyBoard member of Al Waqf Al Islami Foundation (Netherlands)
Brother of Abdullah Osman Abdulrahman Al Hussaini,
General Director of Al Waqf Al Islami Foundation,
owner of Al Furqan Mosque in Netherlands (linked to MWL, Mounir El Motassadeq and Marwan El Shehhi
Family member include Walid Al Hussaini, representative of Abdullah Al Turki (former minister of Islamic Affairs, Secretary General of MWL,
Linked to Mohammad Zouaydi -Spanish procedure-)

************************

AL-QAIDA RECIPIENTS

Major recipients appear to be Usama Bin laden and Adel Abdul Jalil Batterjee. They receive donations from 13 donors.

USAMA (USAMA BIN LADEN)Receives donations from the most prominent in the list:

Bin Laden Brothers, Al Rajhi, Sharbatly, Al Naghi, Bin Mahfouz, Adel Faqih, Al KuwaitWAIL (WAEL HAMZA JULAIDAN)
Former Secretary General of the Muslim World League and Rabita Trust in Pakistan, designated by the United States Treasury as SGDT
Receives donations from Suleiman Al Rashid, Abdulkader Bakri, Salahuddin Abduljawad, Abdul Tahi Taher

BATERJI (ADEL ABDUL JALIL BATTERJEE)

Chairman Al Shamal Islamic Bank (Khartoum, Sudan)
Founder, Al-Birr Society, Benevolence International Foundation
Former Secretary General, World Assembly of Muslim Youth (WAMY)
Receives donations from Yousef Jameel, Ibrahim Afandi, Saleh Abdullah Kamel, Mohammad Bin Abdullah Al Jomaih, Ahmed Zaki Yamani and Mohammed Omar

ABU MAZIN ( ??? MAZIN M. BAHARETH)Son of Mohammed Saleh Bahareth (brother of Usama Bin Laden father's wife and tutor of the Bin Laden family after patriarch Mohammad Bin Laden's death in 1968)

CEO, Bahareth Organization (Jeddah, Saudi Arabia)
Shareholder, Triple B Trading GmbH (Germany) - with Hassan Bahfzallah and Shahir A. I. Batterjee,
Secretary: Abdul-Martin Tatari
Receives donations from Hamad Al HussainiSALEM TAHERReceives donations from Ahmad Al Harbi and Mohammed Al IssaiSource:

S0urce Free Republic

Hawala 102

2008-10-18T20:29:00.000-07:00

BY Sam Vaknin

I. OVERVIEW

In the wake of the September 11 terrorist attacks on the USA, attention was drawn to the age-old, secretive, and globe-spanning banking system developed in Asia and known as "Hawala" (to change, in Arabic). It is based on a short term, discountable, negotiable, promissory note (or bill of exchange) called "Hundi". While not limited to Moslems, it has come to be identified with "Islamic Banking".

Islamic Law (Sharia'a) regulates commerce and finance in the Fiqh Al Mua'malat, (transactions amongst people). Modern Islamic banks are overseen by the Shari'a Supervisory Board of Islamic Banks and Institutions ("The Shari'a Committee").

The Shi'a "Islamic Laws according to the Fatawa of Ayatullah al Uzama Syed Ali al-Husaini Seestani" has this to say about Hawala banking:

"2298. If a debtor directs his creditor to collect his debt from the third person, and the creditor accepts the arrangement, the third person will, on completion of all the conditions to be explained later, become the debtor. Thereafter, the creditor cannot demand his debt from the first debtor."

The prophet Muhammad (a cross border trader of goods and commodities by profession) encouraged the free movement of goods and the development of markets.

Numerous Moslem scholars railed against hoarding and harmful speculation (market cornering and manipulation known as "Gharar"). Moslems were the first to use promissory notes and assignment, or transfer of debts via bills of exchange ("Hawala").

Among modern banking instruments, only floating and, therefore, uncertain, interest payments ("Riba" and "Jahala"), futures contracts, and forfeiting are frowned upon. But agile Moslem traders easily and often circumvent these religious restrictions by creating "synthetic Murabaha (contracts)" identical to Western forward and futures contracts. Actually, the only allowed transfer or trading of debts (as distinct from the underlying commodities or goods) is under the Hawala.

"Hawala" consists of transferring money (usually across borders and in order to avoid taxes or the need to bribe officials) without physical or electronic transfer of funds. Money changers ("Hawaladar") receive cash in one country, no questions asked. Correspondent hawaladars in another country dispense an identical amount (minus minimal fees and commissions) to a recipient or, less often, to a bank account. E-mail, or letter ("Hundi") carrying couriers are used to convey the necessary information (the amount of money, the date it has to be paid on) between Hawaladars. The sender provides the recipient with code words (or numbers, for instance the serial numbers of currency notes), a digital encrypted message, or agreed signals (like handshakes), to be used to retrieve the money. Big Hawaladars use a chain of middlemen in cities around the globe.

But most Hawaladars are small businesses. Their Hawala activity is a sideline or moonlighting operation. "Chits" (verbal agreements) substitute for certain written records. In bigger operations there are human "memorizers" who serve as arbiters in case of dispute. The Hawala system requires unbounded trust. Hawaladars are often members of the same family, village, clan, or ethnic group. It is a system older than the West. The ancient Chinese had their own "Hawala" - "fei qian" (or "flying money").

Arab traders used it to avoid being robbed on the Silk Road. Cheating is punished by effective ex-communication and "loss of honour" - the equivalent of an economic death sentence. Physical violence is rarer but not unheard of. Violence sometimes also erupts between money recipients and robbers who are after the huge quantities of physical cash sloshing about the system. But these, too, are rare events, as rare as bank robberies. One result of this effective social regulation is that commodity traders in Asia shift hundreds of millions of US dollars per trade based solely on trust and the verbal commitment of their counterparts.

Hawala arrangements are used to avoid customs duties, consumption taxes, and other trade-related levies.
Suppliers provide importers with lower prices on their invoices, and get paid the difference via Hawala.
Legitimate transactions and tax evasion constitute the bulk of Hawala operations.
Modern Hawala networks emerged in the 1960's and 1970's to circumvent official bans on gold imports in Southeast Asia and to facilitate the transfer of hard earned wages of expatriates to their families ("home remittances") and their conversion at rates more favourable (often double) than the government's.
Hawala provides a cheap (it costs c. 1% of the amount transferred), efficient, and frictionless alternative to morbid and corrupt domestic financial institutions. It is Western Union without the hi-tech gear and the exorbitant transfer fees.
Unfortunately, these networks have been hijacked and compromised by drug traffickers (mainly in Afganistan and Pakistan), corrupt officials, secret services, money launderers, organized crime, and terrorists.
Pakistani Hawala networks alone move up to 5 billion US dollars annually according to estimates by Pakistan's Minister of Finance, Shaukut Aziz. In 1999,
Institutional Investor Magazine identified 1100 money brokers in Pakistan and transactions that ran as high as 10 million US dollars apiece.

As opposed to stereotypes, most Hawala networks are not controlled by Arabs, but by Indian and Pakistani expatriates and immigrants in the Gulf.

The Hawala network in India has been brutally and ruthlessly demolished by Indira Ghandi (during the emergency regime imposed in 1975), but Indian nationals still play a big part in international Hawala networks.
Similar networks in Sri Lanka, the Philippines, and Bangladesh have also been eradicated.
The OECD's Financial Action Task Force (FATF) says that:
"Hawala remains a significant method for large numbers of businesses of all sizes and individuals to repatriate funds and purchase gold.... It is favoured because it usually costs less than moving funds through the banking system, it operates 24 hours per day and every day of the year, it is virtually completely reliable, and there is minimal paperwork required."

(Organisation for Economic Co-Operation and Development (OECD), "Report on Money Laundering Typologies 1999-2000," Financial Action Task Force, FATF-XI, February 3, 2000, at http://www.oecd.org/fatf/pdf/TY2000_en.pdf )

Hawala networks closely feed into Islamic banks throughout the world and to commodity trading in South Asia.
There are more than 200 Islamic banks in the USA alone and many thousands in Europe, North and South Africa, Saudi Arabia, the Gulf states (especially in the free zone of Dubai and in Bahrain), Pakistan, Malaysia, Indonesia, and other South East Asian countries.
By the end of 1998, the overt (read: tip of the iceberg) liabilities of these financial institutions amounted to 148 billion US dollars.
They dabbled in equipment leasing, real estate leasing and development, corporate equity, and trade/structured trade and commodities financing (usually in consortia called "Mudaraba").

While previously confined to the Arab peninsula and to south and east Asia, this mode of traditional banking became truly international in the 1970's, following the unprecedented flow of wealth to many Moslem nations due to the oil shocks and the emergence of the Asian tigers.

Islamic banks joined forces with corporations, multinationals, and banks in the West to finance oil exploration and drilling, mining, and agribusiness. Many leading law firms in the West (such as Norton Rose, Freshfields, Clyde and Co. and Clifford Chance) have "Islamic Finance" teams which are familiar with Islam-compatible commercial contracts.

II. HAWALA AND TERRORISM

Recent anti-terrorist legislation in the US and the UK allows government agencies to regularly supervise and inspect businesses that are suspected of being a front for the ''Hawala'' banking system, makes it a crime to smuggle more than $10,000 in cash across USA borders, and empowers the Treasury secretary (and its Financial Crimes Enforcement Network - FinCEN) to tighten record-keeping and reporting rules for banks and financial institutions based in the USA.

A new inter-agency Foreign Terrorist Asset Tracking Center (FTAT) was set up.

A 1993 moribund proposed law requiring US-based Halawadar to register and to report suspicious transactions may be revived. These relatively radical measures reflect the belief that the al-Qaida network of Osama bin Laden uses the Hawala system to raise and move funds across national borders.

A Hawaladar in Pakistan (Dihab Shill) was identified as the financier in the attacks on the American embassies in Kenya and Tanzania in 1998. But the USA is not the only country to face terrorism financed by Hawala networks.
A few months ago, the Delhi police, the Indian government's Enforcement Directorate (ED), and the Military Intelligence (MI) arrested six Jammu Kashmir Islamic Front (JKIF) terrorists.
The arrests led to the exposure of an enormous web of Hawala institutions in Delhi, aided and abetted, some say, by the ISI (Inter Services Intelligence, Pakistan's security services).
The Hawala network was used to funnel money to terrorist groups in the disputed Kashmir Valley.

Luckily, the common perception that Hawala financing is paperless is wrong. The transfer of information regarding the funds often leaves digital (though heavily encrypted) trails.

Couriers and "contract memorizers", gold dealers, commodity merchants, transporters, and moneylenders can be apprehended and interrogated.
Written, physical, letters are still the favourite mode of communication among small and medium Hawaladars, who also invariably resort to extremely detailed single entry bookkeeping.
And the sudden appearance and disappearance of funds in bank accounts still have to be explained.
Moreover, the sheer scale of the amounts involved entails the collaboration of off shore banks and more established financial institutions in the West.

Such flows of funds affect the local money markets in Asia and are instantaneously reflected in interest rates charged to frequent borrowers, such as wholesalers.

Spending and consumption patterns change discernibly after such influxes.
Most of the money ends up in prime world banks behind flimsy business facades.
Hackers in Germany claimed (without providing proof) to have infiltrated Hawala-related bank accounts.

The problem is that banks and financial institutions - and not only in dodgy offshore havens ("black holes" in the lingo) - clam up and refuse to divulge information about their clients.

Banking is largely a matter of fragile trust between bank and customer and tight secrecy. Bankers are reluctant to undermine either.
Banks use mainframe computers which can rarely be hacked through cyberspace and can be compromised only physically in close co-operation with insiders.
The shadier the bank - the more formidable its digital defenses.
The use of numbered accounts (outlawed in Austria, for instance, only recently) and pseudonyms (still possible in Lichtenstein) complicates matters.
Bin Laden's accounts are unlikely to bear his name. He has collaborators.

Hawala networks are often used to launder money, or to evade taxes. Even when employed for legitimate purposes, to diversify the risk involved in the transfer of large sums, Hawaladars apply techniques borrowed from money laundering.

Deposits are fragmented and wired to hundreds of banks the world over ("starburst").
Sometimes, the money ends up in the account of origin ("boomerang"). Hence the focus on payment clearing and settlement systems.
Most countries have only one such system, the repository of data regarding all banking (and most non-banking) transactions in the country. Yet, even this is a partial solution. Most national systems maintain records for 6-12 months, private settlement and clearing systems for even less.

Yet, the crux of the problem is not the Hawala or the Hawaladars.

The corrupt and inept governments of Asia are to blame for not regulating their banking systems, for over-regulating everything else, for not fostering competition, for throwing public money at bad debts and at worse borrowers, for over-taxing, for robbing people of their life savings through capital controls, for tearing at the delicate fabric of trust between customer and bank (Pakistan, for instance, froze all foreign exchange accounts two years ago).

Perhaps if Asia had reasonably expedient, reasonably priced, reasonably regulated, user-friendly banks - Osama bin Laden would have found it impossible to finance his mischief so invisibly.

The Rest @ Behavioral Science Blogspot

Sam Vaknin is the author of "Malignant Self Love - Narcissism Revisited" and "After the Rain - How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site:

http://samvak.tripod.com/

Islamic Banking: Occasional Paper, No 49 - Iran

2008-10-09T08:21:00.000-07:00

Islamic Banking: Occasional Paper, No 49
By Zubair Iqbal, Abbas Mirakhor

Published by International Monetary Fund, 1987
ISBN 0939934825, 9780939934829
62 pages

This book was published after Post-Revoutionary Iran set in place Ismalic reforms. This is a Shi'ia approach, different set of methods of reform from the the current post 9-11 Islamic Banking pheonomenon, which is guided by Sunny economists.

Iranian Banks have somewhat different practices, and have differeing fatwas related to Haram. Therefore they do not apear to automtatically participate in Sukuks and other instruments issued by other Islamic finanace groups.

More Study is needed.

Bank Markazi Jomhouri Islami Iran

2008-10-04T08:20:00.000-07:00

ISO Country code:
IRA

SWIFT Country code:
IA
Central Bank:
(The Central Bank of Iran) ; Established: 1960; Bank of Note issue
Monetary unit:
Rial(IRR) = 100 Dinars
Capital:
Tehran
Financial centre:

Tehran
Language:
Persian (Farsi)
Population:
66,000,000
Area:
1,648,195 sq. km.
± GMT:
+3 ½ hours

Banking hours:
Saturday to Wednesday 08.00-16.00

Public holidays:
2008:Oct 1; Dec 8,16. 2009: Jan 7,19; Feb 11; Mar 9,18, 20; Jul 20; Aug 8; Sep 9,21; Oct 15; Nov 28

Bank Markazi Jomhouri Islami Iran

Dahabshiil and Halawa's Explorinn Wirless Phones for Money Transfers

2008-09-18T13:41:00.000-07:00

In countries where few have access to formal banking, mobile transfers provide crucial support for families with breadwinners abroad

There are dozens of different networks by which the world's estimated 200 million migrant workers transfer money to their home towns: from transnational behemoths such as Western Union to local, traditional systems such as the Chinese fei ch'ien ("flying monkey"). Ghanaian migrant workers in Berlin can deposit cash in one of the city's transfer agencies; at the other end, a hairdresser in Accra keeps a pile of cash next to his clippers to dispense funds to the workers' families. But all networks - from hundi in Pakistan to phei kwan in Thailand - could soon be eclipsed by the humble text message.

Globally, the total amount sent home by migrant workers through remittance transfers is roughly $300bn (£170bn); money sent via informal networks and money laundering is believed to add a further $150bn. Remittances far outstrip foreign aid to the developing world and can contribute up to a third of a country's GDP.

But "mobile remittances" - small sums sent via text message - are transforming the market. This may not sound hugely significant in an age of internet banking, but in countries where few have access to formal banking, mobile transfers provide crucial support for families with breadwinners abroad.

Branded with snappy names such as GCash and M-Pesa, the first networks were launched in the Philippines and Kenya last year, with services in India and Afghanistan coming soon. Users pay cash into an "mWallet"; and whenever they want to transfer money using their phone, the recipient gets a text message, which provides them with a code to show to a local agent.

The mobile networks are able to compete in an already crowded marketplace with low transaction costs and flexibility: while the usual wire transfer companies take a 10 per cent commission on transfers, GCash costs as little as 1 per cent.
It is also a formal system of remittance at a time when informal networks face harassment by financial authorities.

Because of US suspicions that the 9/11 attacks were funded by money laundering, many hawala networks, supplying remittances to families in the Middle East and Africa, were shut down (though the 9/11 Commission later found that the attacks had been funded using ordinary wire transfers).

According to a 2005 UK government report: "The closure of hawala outlets in the US and UK after the 11 September terrorist attacks left many Somali families destitute."

The Horn of Africa transfer company Dahabshiil is investigating providing mobile transfer to help workers stung by prohibitively high commissions since the traditional networks shut down.
Paul Harvey, who has carried out research for the Overseas Development Institute into the role remittances play in development, notes: "Somalia has very widespread mobile-phone networks, considering its political instability, so there are all sorts of exciting possibilities for using mobile networks."
The mobile transfer networks could also change the way humanitarian agencies administer aid, as a pilot scheme launched during the Kenyan post-election violence this year demonstrated.
With the country in chaos, cattle rustlers took advantage of the security vacuum in the remote Kerio Valley to attack communities and livestock, making the transportation of food, money and materials to affected communities unfeasible. The aid agency Concern Worldwide entered into an agreement with M-Pesa and sent a total of ?36,000 to 560 households within a month.

The scheme highlighted both the advantages and the pitfalls of the transfers. Most importantly for underfunded aid agencies, it was markedly cheaper than normal wire transfer, and quicker and less dangerous than handouts.

But although mobile-phone use has increased hugely in Africa over the past decade, 40 per cent of those who required aid in the Kerio Valley did not have access to one.
Widespread illiteracy also provided challenges for a project that required the use of text messages.
Concern circumvented these problems by liaising with trusted, literate members of the community who owned handsets.

In September, Concern will start a permanent scheme targeting 5,000 families around Kenya in dangerous or isolated areas. Other agencies will be watching with interest. If it takes off, aid workers may find themselves having to add the language of txtspeak to their roster of local dialects.

The Rest @ New Statesman

Learn About Money laundering

2008-09-09T10:17:00.000-07:00

Money Laundering: Forensics Text Book in Google Book
The conversion or transfer of property derived from a criminal offense for the purpose of concealing, or disguising, the illicit origin of the ...www.thebankingnetwork.com/glossary.html
Money laundering is the process whereby the origin of dishonest and/or illegally obtained money is concealed so that it appears to come from a ...www.u4.no/document/glossary.cfm

This is the process by which "dirty money" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.www.efgi.com/glossary/m.html
the wilful concealment of the existence, illegal source, or illegal use of proceeds, and the disguise of them as legitimate.www.gbc.hu/english/bszotare3.htm
There is international concern that the multimillionaire Osama bin Laden and his wealthy backers have created a sprawling global network of funds. ...www.guardian.co.uk/world/2001/sep/27/afghanistan.terrorism5
Legislation requires the School, in some circumstances, to obtain satisfactory evidence (such as sight of a passport) of the identity of the person who is paying Fees.www.millhill.org.uk/admissions/terms.html
....means engaging directly or indirectly in a transaction that involves money or property which is proceeds of crime or receiving, processing, conceiving, disguising, transforming, converting, disposing of, removing from, bringing into any territory, money or property that is the proceeds of crime.www.dwaf.gov.za/Docs/Other/RISDP/Glossary.doc
.....is the act of investing funds in a way that disguises their origin. Some criminals undertake to launder the proceeds of their crime in order to avoid detection. ...www.illegal-logging.info/uploads/Illegal_Logging_Glossary2.doc
The unlawful act of accepting large amounts of cash that is used for criminal activities. Banks and other financial institutions are required by law to report cash deposits of $10,000 or more.www.moneymatters101.com/startingabusiness/bust/bustm.asp
concealing the source of illegally gotten money wordnet.princeton.edu/perl/webwn
Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of the underground economy. en.wikipedia.org/wiki/Money laundering
The act of engaging in transactions designed to obscure the origin of money that has been obtained illegally en.wiktionary.org/wiki/money laundering

Bank Maskan

2008-09-09T10:02:00.000-07:00

Bank Maskan

POBox 11365-3499No.247, Ferdowsi Ave. TehranIran
Telephone:
Facsimile:
Website:
+98(21)6709655
+98(21)6703262
http://www.bank-maskan.org

Bank of Interest

Who owns Iqra TV?

2008-09-01T18:36:00.000-07:00

Who owns Iqra TV?
Who owns Iqra TV? Saudi religious channel

Best Answer the multimillionere saudi Bussiness man (Saleh Kamel)..who owns the all ART channels including IqraTV

Saleh Kamel Fund for Young Entrepreneurs - and Qutbist Terrorists?

2008-08-27T17:00:00.000-07:00

This is How Zakat Funds Work and How Salifiyyah - Qutbists fund their projects:

Watch this process

Dallah Albaraka Donates Ten Million Riyals To The Centennial Fund

The Signing Ceremony Was Attended By The Governor Of The General Investment Authority (SAGIA) And Deputy Chairman Of The Trustees Board Of The Centennial Fund. Mr. Omar Abdallah Al-Dabbagh

Jeddah, Saudi Arabia - August 10, 2008: NRH Prince Abdul-Aziz bin Abdallah bin Abdul-Aziz,

Consultant of Custodian of the Two Holly Mosques and Chairman of the Trustees board of the Centennial Fund signed in Jeddah last July with Mr. Abdallah Saleh Kamel, C.E.O. of Dallah Albaraka Group an agreement whereby the Group donates through its social responsibility programmes the amount of ten million riyals for the establishment of a special fund under the umbrella of the Centennial Fund, in the name of "Saleh Kamel Fund" for the support of young entrepreneurs.

The signing ceremony was attended by the Governor of the General Investment Authority (SAGIA) and Deputy Chairman of the Trustees board of the Centennial Fund. Mr. Omar Abdallah Al-Dabbagh.

On this occasion Mr. Abdallah Saleh Kamel said in a statement that the agreement stands as a further assurance to the Group's feeling of responsibility toward the community and its desire for fostering the culture of entrepreneurship beside standing as a proof of our confidence in the mechanism of the Centennial Fund which realized within so short period of time a remarkable success and eventually acquired the ISO 900l.

According to this agreement:

Dallah Albaraka shall have a priority in establishing offices for distribution and collection of applications,
The Centennial Fund pursues all other arrangements in the following three steps:

First Stage: Acceptance and evaluation of applications.

At this stage personal interviews shall be conducted with the applicants to make sure that they are really serious in establishment of projects and that the projects are quite viable.

Second Stage: Evaluation of Applications

In the light of the result of this verification the committee shall decide on the applications and, in case of acceptance of the projects

Third Stage - Provision

further steps shall be taken with regard to provision of facilities and assistance to viable projects.

PressReleaseNetwork.com

Iranian Banks Beat US Sanctions by Linking to Smaller Banks

2008-08-21T07:20:00.000-07:00

Iran gets around US bank sanctions

By Najmeh Bozorgmehr in Tehran

Bank Mellat, Iran’s third largest state-owned bank, is getting around US-imposed sanctions by establishing links with small and medium-sized banks that have less US exposure than bigger lenders, its managing director said.

Ali Divandari told the Financial Times that US sanctions had failed to prevent the bank’s “links with the international brokerage network”, adding: “We managed to quickly replace other banks.”

EDITOR’S CHOICE

Syria and Iran consider joint bank - Oct-13
Georgia fall-out casts shadow on Iran talks - Aug-25
US warns Turkey over energy deal with Iran - Aug-14
Russia denies sanctions deal after Iran snub - Aug-06
Obama camp signals robust approach on Iran - Jul-01
Iran says offer is acceptable ‘in principle’ - Jul-02

The US in October imposed unilateral sanctions against three of Iran’s commercial banks – Melli, Saderat and Mellat – to choke off Iran’s access to dollar financing and the US financial system.

Analysts say financial sanctions have hit Iran harder than the United Nations-imposed sanctions, which are largely restricted to nuclear- and missile-related activities and people involved in such activities.

“The US sanctions initially had a negative impact on the bank’s reputation and created troubles, but in practice there was no halt in our operations,” Mr Divandari said. “We are now working with important international commercial and correspondent banks on a daily basis . . . including European, Asian and African ones.”

He declined to give the names or nationalities of the foreign banks concerned. But he said the number of banks working with Mellat had increased under sanctions, because the big international banks that had withdrawn or scaled down ties to safeguard their interests in the US had been replaced by small and medium-sized banks with less US exposure.

“This economy has its own attractions, even under the worst conditions,” he said.
Western diplomats agree that Iran’s financial transactions have continued but stress that they have been much more costly, troublesome and time-consuming. Such difficulties, they say, have further hindered big investments in the country.

France and Britain recently joined the US in alleging that Iranian banks were involved in illegal nuclear activity and in financing terrorism. Iran denied the charges.

The European Union has been seeking financial sanctions outside the UN and has banned Bank Melli, Iran’s largest commercial bank, from operating on its territory since June.
The EU has also warned financial entities that doing business with Iranian banks will be carefully watched.
Bank Mellat has six branches outside the country, including one subsidiary in London called Persia International Bank, which still operate.

“It will be troublesome if Europe imposes unilateral sanctions on Iran’s banks, but we will be able to again replace the outgoing banks,” Mr Divandari said.

He warned the foreign banks that if they left it could be difficult for them to return.
There have been no foreign lenders in Iran since the 1979 revolution, when all banks were nationalised. However, big international banks have had representative offices, which have been scaled down or shut during the past two years because of sanctions.

Mr Divandari said Iran’s market could not be ignored. “Domestic investment on its own cannot meet the country’s needs, which makes Iran an opportunity for foreign banks, particularly as investment banks – not retail banks – to function as gates in attracting foreign investment.”

He reckoned the capital turnover for foreign banks could be as high as 40 per cent, almost double the rate in Europe, should they decide to enter the Iranian market.

He also urged foreign banks and companies to join his bank’s imminent privatisation programme despite sanctions, and reminded them of Iran’s geopolitical significance and enormous energy resources.

The Rest @ FT.COM

What is Money Laundering?

2008-08-16T18:52:00.000-07:00

Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of the underground economy.

[ this can be done in any financial system, including Western or Islamic ]

In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Comptroller of the Currency) to encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting.

As a result, the illegal activity of money laundering is now recognized as potentially practiced by:

Individuals,
Small and large businesses,
Corrupt officials,
Members of organized crime (such as drug dealers or the Mafia),
Even corrupt states, through a complex network of shell companies and trusts based in offshore tax havens.

A few examples of money laundering are smurfing or kiting.
The increasing complexity of financial crime, the increasing recognized value of so-called "financial intelligence" (FININT) in combating transnational crime and terrorism, and the speculated impact of capital extracted from the legitimate economy has led to an increased prominence of money laundering in political, economic, and legal debate.

The Rest @ Wikipedai

How a Hawala Works

2008-08-16T17:48:00.000-07:00

In the most basic variant of the hawala system, money is transferred via a network of hawala brokers, or hawaladars.

A customer approaches a hawala broker in one city and gives a sum of money to be transferred to a recipient in another, usually foreign, city.
The hawala broker calls another hawala broker in the recipient's city, gives disposition instructions of the funds (usually minus a small commission), and promises to settle the debt at a later date.
The unique feature of the system is that no promissory instruments are exchanged between the hawala brokers; the transaction takes place entirely on the honor system.
As the system does not depend on the legal enforceability of claims, it can operate even in the absence of a legal and juridical environment.
No records are produced of individual transactions; only a running tally of the amount owed by one broker to another is kept.
Settlements of debts between hawala brokers can take a variety of forms, and need not take the form of direct cash transactions.

The Rest @ Wikipedia

In addition to commissions, hawala brokers often earn their profits through bypassing official exchange rates.

Generally the funds enter the system in the source country's currency and leave the system in the recipient country's currency.
As settlements often take place without any foreign exchange transactions, they can be made at other than official exchange rates.

Hawala is attractive to customers because it provides a fast and convenient transfer of funds, usually with a far lower commission than that charged by banks.

Its advantages are most pronounced when the receiving country applies distortive exchange rate regulations (as has been the case for many typical receiving countries such as Pakistan or Egypt) or when the banking system in the receiving country is less complex (e.g. due to differences in legal environment in places such as Afghanistan, Yemen, Somalia).

Furthermore, the transfers are informal and not effectively regulated by governments, which is a major advantage to customers with tax, currency control, immigration, or other legal concerns.

For the same reasons, governments do not favor the system, and accusations have been made in recent years that terrorist funding often changes hands through hawala networks.

Al Rowad Financial Services PLC

2008-08-15T15:55:00.000-07:00

Interesting Company to Watch

Rowad Means "Pioneers".

Al Rowad Financial Services PLC

A brokerage company at Khartoum Stock Exchange (KSE). It is the second established public company working in this field.

The Chairman of the company Mr. Abdul Rahim Hamdi twice Minister of Finance and National Economy of Sudan.

He established a number of banks in Sudan, and propagated a bank in the United Kingdom.
The General Manager Dr. Hamid Al Amin, a banker, ex-manager of department of corporations in Khartoum Stock Market and Feasibility Studies and Research department manager in Al Igbal Consulting Company
SDG 350,000,000 on 31 of December 2007
Contact Us
Tel +249 183 777222
Fax +249 183 777116

info@rowad.sd

Saleh Kamel Wants Financial Instruments to move from Sharia Compliant to become Sharia Based

2007-12-20T09:18:00.000-08:00

The pioneer and driving force behind modern Islamic finance is Saleh Kamel.
However, he is now calling for Islamic finance to move from being Shari’ah compliant to that of being Shari’ah based.

At the heart of his concern, is a belief that Islamic finance has adopted in part Western models, rather than the purely shari’ah model. Sheik Kamel sees zakat as key to the transformation from Shari’ah compliant to Shari’ah based financial products..

In October 2006, Sheik Kamel called for the establishment of a single worldwide organization to collect and distribute zakat, both Zakat Al-Fitr and Zakat Al-Mal from the 20,000 or so organizations that are currently involved in its collection.

Significantly, the funds will be distributed under the supervision of a committee comprising experts from the IDB, ICCI and the OIC.

On November 28, 2006, the OIC approved Kamel’s proposal.
On December 4, 2006, it was announced that the International Commission for Zakat would be based in Malaysia.

On April 30, 2007, 20 OIC nations, including Saudi Arabia, endorsed the International Commission for Zakat.

-The whole post from the Shimron letters

The Islamic Financial Services Board

2007-12-19T09:25:00.000-08:00

The Islamic Financial Services Board

An international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include:

banking
capital markets
insurance sectors

The IFSB also conducts research and coordinates initiatives on industry related issues, as well as organises roundtables, seminars and conferences for regulators and industry stakeholders.

Iraqi2 OFAC December as Specially Designated Nationals

2007-12-15T11:44:00.000-08:00

The following entities have been added to OFAC's SDN list:
AL-AHMAD, Ahmad Muhammad Yunis (a.k.a. AL-BADANI, Ahmad Muhammad Mahmud 'Abdallah; a.k.a. AL-BARRANI, Ahmad Muhammad Al-Abdullah), Al-Mazzah Al-Jabal District, 6 Subdistrict, 3 area, Al-Iskan complex, 40/2, Fifth Floor, Damascus, Syria; DOB 19 Sep 1978; POB Al-Anbar, Iraq; nationality Iraq; Passport H0347417 (Iraq) issued 20 Feb 2003 expires 19 Feb 2011; passport place of issue: Al-Anbar, Iraq (individual) [IRAQ2]

AL-AHMAD, Sa'ad Muhammad Yunis, Damascus, Syria; DOB 1 Jan 1981; POB Baghdad, Iraq; nationality Iraq; Identification Number 159014 (Iraq) (individual) [IRAQ2]
AL-AZAWI, Hatem Hamdan, Diyali, Al-Khalis Sector, Iraq; Deli Abbas, Iraq; DOB circa 1937 (individual) [IRAQ2]

AL-DULAYMI, Hasan Hashim Khalaf (a.k.a. "ABU WISSAM"), 30th Street, Al-Yarmuk Area, Jadat Al-Jaysh District, Damascus, Syria; House #43, Lane #17, Subdivision #808, Al-Dawrah, Baghdad, Iraq; DOB 1942; POB Baghdad, Iraq; nationality Iraq (individual) [IRAQ2]
AL-DURI, Thabet, Karkh District, Baghdad, Iraq; Rukan al-Din, Syria; DOB 1943; alt. DOB 1944; POB Dur, Iraq (individual) [IRAQ2]

AL-RAWI, Fawzi Mutlaq (a.k.a. AL-RAWI, Fawzi Isma'il Al-Husayni; a.k.a. "ABU AKRAM"; a.k.a. "ABU FIRAS"), SYRIAN BA'TH PARTY COMMAND BUILDING, AL-HALBUNI DISTRICT, DAMASCUS, Syria; SYRIAN GOVERNMENT-OWNED APARTMENT , AL-MAZZAH DISTRICT, DAMASCUS, Syria; DOB 1940; POB RAWAH CITY, IRAQ; citizen Syria; nationality Iraq; CHAIRMAN, IRAQI WING OF THE SYRIAN BA'TH PARTY (individual) [SDGT]

AL-TIKRITI, Ahmed Watban Ibrahim Hasan (a.k.a. AL-TIKRITI, Ahmad Watban Ibrahim Hasan; a.k.a. MUHAWDAR, 'Imad 'Udi), Al-Hadda Hotel, Sana'a, Yemen; Al-Ra'is Building, Mina Street, Tartus , Tartus, Syria; Jirmanah Neighborhood, Damascus, Syria; DOB 1975; alt. DOB 1979; POB Baghdad, Iraq; nationality Iraq (individual) [IRAQ2]

HSBC

2007-12-14T07:42:00.000-08:00

From Banking in Dubai FAQ

You'll usually need a residency visa first before you can do this although some banks will accept a letter from your employer saying that your residency visa has been applied for (your employer should be able to tell you which banks) or even a letter of introduction from a bank in your home country.

HSBC is one bank apparently (not confirmed) that does not require a residency visa to open an account. Go to the bank of your choice......

......HSBC Bank Middle East - mixed reports. Some customers are happy, some unhappy. Don't get caught by the office on Jumeirah Beach Road - it's a representative office of their offshore bank (Guernsey?), not a branch of HSBC UAE....

....HSBC is well established in the Middle East but Dubai branches are only in:

Bur Dubai (no parking)
Jebel Ali with a customer service centre in Mercato Mall on Jumeirah Beach Rd.

......HSBC has a bank presence with branches in most emirates, and also has a representative office on Jumeirah Beach Road in Dubai not connected with the UAE branches. You usually cannot do your normal banking activities at a representative office but they may have an ATM.

Arboon, Ijara and Delorenzo, Fatwa Collector

2007-10-08T02:21:00.000-07:00

GROWING INTEREST

When Hedge FundsMeet Islamic Finance

U.S. Firms Hire ScholarsT o Help Design Products;
The 'Rent-a-Sheik' Issue By JOANNA SLATER August 9, 2007; P

HAYMARKET, Va. -- One recent afternoon, New York money manager James Rickards presented Sheik Yusuf Talal DeLorenzo with a dilemma: Could his hedge fund be Islamic-friendly?

Islam prohibits all kinds of speculative behavior that is embedded in Wall Street's DNA.

But Mr. DeLorenzo, a Massachusetts-born convert to Islam, is on a mission to meld centuries-old Islamic law with modern finance in the U.S.Mr. Rickards's fund couldn't bet on currency futures or some of the shares in the Standard & Poor's 500 index, Mr. DeLorenzo said, if he wants observant Muslims to invest.

But some alterations could earn the sheik's approval -- such as holding currencies instead of futures, and buying only S&P 500 companies that aren't debt-heavy or dependent on profit from interest payments. "Music to my ears," Mr. Rickards said. "It sounds like I can still get the effect I'm looking for."

With the Middle Eastern economy booming, partly thanks to soaring oil wealth, the Islamic financial industry has been expanding at a clip of about 15% a year, according to accounting firm KPMG, and is on pace to reach $1 trillion in two years. The money is seeking new outlets and Western financial institutions are seeking new clients -- opening the door for more aggressive methods to reconcile two worlds that don't easily

The issue of what's permissible has opened fault lines within Islamic finance. Malaysian adaptations of Western-style bonds, for instance, have been condemned, then copied, in Muslim countries in the Middle East.

Scholars consulting for Western financial institutions are criticized for bending religious laws to serve financial ends -- the "rent-a-sheik" argument, says one U.S. bank official.

Vendors profit by "capitalizing on people's religious insecurities," says Mahmoud El-Gamal, a professor of economics who holds a chair in Islamic finance at Rice University.

"Don't take my duck, sprinkle holy water on it, and say it's a chicken."Islamic law, or Shariah, stems from the Quran and subsequent interpretations by scholars. In the economic realm, commerce receives divine approval but several verses speak of a prohibition on interest, a practice viewed as exploiting the borrower.

An association in Bahrain is the informal authority on Shariah compliance for Islamic financial institutions.
But its standards aren't mandatory and don't govern the offerings of Western firms, which retain their own Shariah boards to advise them and issue their own rulings, or fatwas.
Top scholars can serve on dozens of boards, earning retainers of up to $20,000 to $40,000 a year per client.
Scholars who give their seal of approval sometimes receive a percentage of assets invested.

Mr. DeLorenzo says it's rare to get a percentage of assets, but that one time he accepted such compensation.

Among his other clients is Dow Jones parent company of The Wall Street Journal, which retains him and five other scholars to consult on its indexes of Shariah-compliant companies.
Mr. DeLorenzo receives an annual retainer of $5,000 plus stipends for attending two to three meetings a year.

Pledging Collateral - Arboon

Western banks say they make more than cosmetic changes to create shariah-compliant financial products. London-based Barclays Bank PLC, which worked with Mr. DeLorenzo and a firm called Shariah Capital Inc. on a platform for hedge funds to trade without violating Islamic requirements, had to rewrite a 20-odd-page brokerage contract.

The concept of short-selling -- using borrowed shares to bet on a stock's decline -- was replaced with an Islamic down-payment structure known as an arboon.

Any reference to a "guarantee" was replaced, for instance by a pledge of collateral, because Islamic rules require shared risk by all parties.

NEW OPTIONS

The Issue: Hedge funds and financial-services companies are seeking to create new products that can meet Islamic religious requirements.
The Incentive: The Middle East's economy is booming, creating demand for new investment options, and Western firms are looking for new clients.
The Challenge: Firms are adapting offerings to avoid prohibitions such as charging interest, while religious scholars decide how freely they can interpret Islamic law."There were definitely a few firsts," says Kieran McCann, a director in Barclays Capital's prime-brokerage group.

The gap between Wall Street and Islamic financial law can be uncomfortably wide, especially amid lingering distrust on both sides after the 2001 terrorist attacks on the U.S. But the U.S. also is home to several million middle-class Muslims, one of the largest markets in the West.

A 2004 Zogby poll for Georgetown University found a majority have college educations and earn $50,000 or more a year. Some early steps in providing Islamic alternatives have exposed pent-up demand.Vetting ServicesOnce word began to spread that Devon Bank in Chicago was exploring Islamic financial products in 2002, there was an immediate response from the local Muslim community, says bank vice president David Loundy.

"People said, 'Can you do houses, cars, lines of credit, and how about my sister in Connecticut?'" Some customers went as far as calling scholars in Pakistan to vet the acceptability of Devon's services, he said.

One Devon customer, Ahmed Khan, a technology executive at Dutch-based bank ABN Amro Holding NV, says he owned a home in the late 1980s but was "very uncomfortable" paying conventional mortgage interest and went back to renting.

In 2005 he took out a Devon "Shariah-compliant" mortgage using a method called ijara: The bank bought Mr. Khan's condominium and he pays a monthly sum to buy it from the bank over time, plus a lease payment for using the property.

In the first five years his cost of financing is about 7%, he says, and he paid some fees beyond normal closing costs for the specialized legal structure.

Mr. Khan had to fill out a standard mortgage application, but says it's important for U.S. Muslims to accept such compromises to encourage banks' efforts. "If you don't show that demand, there will never be any supply," he says.

The bank also converts the arrangement to a conventional mortgage for its regulators and the Internal Revenue Service, and advises customers to seek tax advice on whether it's deductible.

Mr. Khan takes the deduction.

Cadre of ScholarsMr. DeLorenzo, 58 years old, is at the center of the push to develop Islamic financial products in the U.S. He also serves on boards of Islamic scholars that rule on their acceptability, as do a cadre of less than 20 top scholars globally -- only a couple of them in North America -- who advise banks and financiers.

Mr. DeLorenzo's clients have included Morgan Stanley, Brown Brothers Harriman & Co., Royal Bank of Scotland PLC, and France's Société Générale SA.An Islamic mortgage that Mr. DeLorenzo helped develop here is serving as a blueprint for a venture in Saudi Arabia. He worked with a Lebanese investment bank to structure the first-ever Islamic bond from a U.S. company, issued last year by a small Texas energy firm.

Mr. DeLorenzo acted as "a cultural bridge between us and the rest of the scholars," says Ibrahim Mardam-Bey of Bemo Securitisation, the Lebanese bank. He can read banks' term sheets as well as the Quran, and has another advantage, says Mr. Mardam-Bey:

"Very few of the other scholars care to read their email."Mr. DeLorenzo, named Anthony at birth, is a grandson of Sicilian immigrants whose family was half-Catholic, half-Methodist, and was raised in neither religion, he says.

He uses the Islamic honorific "Sheik" that religious scholars are free to claim for themselves, but favors business suits and has a trimmed white beard. He was interested in finance from the age of 13, when he asked his mother to buy him shares in Studebaker Motor Co., he says.

As a Cornell University student he hopped a trans-Atlantic freighter to study in Spain, but tired of the trip early and got off in Casablanca. There he became fascinated with Arabic and Arab culture and began to read the Quran. He never returned to Cornell, instead studying in Cairo and Karachi.

He changed his name, married a Pakistani woman and in the 1980s became an adviser on education to the Pakistani government.

After attending a conference on Islamic economics held in Pakistan, he began collecting fatwas on Islamic banking issued by religious scholars across the Muslim world.

In 1989, amid escalating violence in Karachi, armed men attempted to shoot their way into the home where Mr. DeLorenzo, his wife and their three children lived. One of the family's servants was shot in the head. The case was never solved, he says.Mr. DeLorenzo quickly moved his family to Virginia, and his interests turned to the challenges faced by observant Muslims living in the U.S. The Islamic financing options here -- small-scale efforts by cooperatives, rather than financial heavyweights -- left him unimpressed.

"They were charging people too much, making them stand in line for six months to a year, demanding down payments of 40% on a house, and didn't have very good Shariah advice, if any."

Banking Fatwas

He began to establish his reputation as an expert in the late 1990s, after publishing a collection of English translations of the Islamic banking fatwas.

In 2000 he began working with what would become Guidance Financial Group, a company founded by Mohamad Hammour, a former economics professor at Columbia University. The goal: to offer U.S. Muslims a competitively priced Islamic mortgage.

It took a year and a half to hammer out a solution that they believed could not only comply with Shariah, but also clear the various home-finance regulations of individual states. It also needed to be eligible for financing by mortgage giant Freddie Mac.

"We had to essentially reinvent the entire mortgage process -- from the day you talk to the consumer, to the day the mortgage gets sold on Wall Street," says Dr. Hammour.Guidance offers a co-ownership agreement known as a musharaka, a slightly different strategy than that of Devon Bank.

The customer and Guidance jointly form a new corporation to own the home. Part of the customer's monthly payment goes toward buying out Guidance's share and part is a "utility fee," which the home buyer pays in exchange for using the asset.

Guidance says it keeps the fees roughly competitive with the market in 30-year mortgage interest rates, though there are added fees connected with the co-ownership venture. By the end of the term, the home buyer has completely bought out Guidance's stake and wholly owns the house.

Guidance reports the transaction to the IRS as a conventional mortgage, like Devon Bank, and says its customers generally take a regular deduction.

Guidance says it reached $1 billion in such financing in June, and is now operating in 21 states and Washington, D.C.

The firm contends the market for Shariah-compliant mortgages in the U.S. could top $10 billion a year.

Selling Point

Another member of Guidance's Shariah board is a former Pakistani judge, Muhammad Taqi Usmani, whose expertise is a major selling point for Guidance customer Ferzana Mir, a doctor from Pakistan who lives in Plano, Texas. (Mr. Usmani also serves on the Dow Jones Shariah board.)

Dr. Mir refuses interest on her U.S. bank accounts, and says some U.S. Muslims she knows are skeptical of a mortgage like hers because they view its substitutions for interest as "just a play on words." She disagrees: "As you delve into the finer points, you understand how this is different," she says.

Mr. DeLorenzo is pushing the envelope with an even more complex product, the Islamic trading system for hedge funds he helped develop with Barclays and Greenwich, Conn.-based Shariah Capital.

In the summer of 2001, Shariah's CEO Eric Meyer was a hedge-fund manager looking for a new venture. He was impressed by Mr. DeLorenzo's writing on Islamic finance. He sought him out and the two men talked for more than five hours about how to create an Islamic hedge fund.

Mr. DeLorenzo had his doubts. Hedge funds' variety of complex investment strategies -- including "short selling" stocks by selling borrowed shares to bet their price will drop -- poses a problem.

In Islamic finance, investors aren't allowed to sell what they don't own because it represents an unacceptable form of speculation.

There are other prohibitions, too. Because of the ban on interest payments, investors must avoid companies like banks that rely on interest for their income.

For the same reason, they are required to steer clear of firms that carry high levels of debt -- defined in different rulings as around one-third of either market capitalization or assets -- and thus pay a significant amount of interest.

Those are obstacles that would stop some experts.

Monzer Kahf, an economist and consultant in Islamic finance who lives near Los Angeles, says he generally supports Islamic finance efforts, but draws the line at trying to make hedge funds Shariah-compliant:

"What are hedge funds other than advanced forms of speculation?"'Excruciating Detail'

Mr. DeLorenzo and other well-known scholars began by breaking down the entire process of the traditional short sale "in excruciating detail," recalls Mr. Meyer. Some of the scholars' questions stumped even seasoned short-selling pros.

One example: If an investor borrows shares in a company, and that company goes bankrupt, who has voting rights?Questions like that were "just exasperating," Mr. Meyer says. "You're thinking, 'It's bankrupt, what does it matter?'
But in Islamic finance, you always need to know ownership and control" to make sure the risk is shared among the parties. After months of meetings in London and New York, Mr. DeLorenzo and his fellow scholars adapted the arboon contract -- akin to a down payment that enables the short-seller to take ownership of the share, rather than just borrowing it.
To address avoiding companies with too much debt or other issues under Islamic law, Shariah Capital developed new screening software. It taps directly into the quarterly reports that companies file electronically to the Securities and Exchange Commission and weeds out businesses that carry high amounts of debt or reap significant income from interest payments.

Mr. DeLorenzo now holds the title of chief Shariah officer for the company, and can tap into the software and monitor what's being traded at any time.

Two U.S. hedge fund firms have signed up to use the trading platform so far, and Mr. Rickards, the New York hedge-fund manager, is considering joining them.Mr. DeLorenzo says he hopes adapting Islam to modern finance could eventually influence other areas of Islamic law.

Shariah has "essentially been in a coma for several centuries," he contends. "It desperately needs reviving." He says he wants to expand his own small group of colleagues, but encounters cultural obstacles.

He recalls a meeting earlier this year in Dubai where a scholar lectured a group of visiting executives from a multinational investment firm about the sinfulness of conventional finance. "It was worse than bad," Mr. DeLorenzo says.

Write to Joanna Slater at joanna.slater@wsj.com (joanna.slater@wsj.com)

The growth of financial industries in the Islamic world is creating demand for investment professionals with an understanding of Islamic law - a demand that won't be satisfied any time soon.

At a recent regional business summit organized by Reuters, participants said Muslim investors are increasingly sophisticated and increasingly inclined to invest their money according to the stricture of Sharia, or Islamic law, say media reports.

For example, Islamic law prohibits paying interest, which makes it difficult to trade bonds or other debt instruments.

In addition, Islamic law bans investment in companies engaged in gambling, pornography or alcohol products.

Hassan Hakimian, The Cass Business School's associate dean for Off-Campus Programs, told BusinessWeek Islamic finance is growing some 15 percent annually and will continue that growth for at least the next ten years.

At the Reuters summit Atif Abdulmalik, chief executive of the private equity group Arcapita, based in Bahrain, said Islamic investing is now "mainstream."

Keba Keinde, CEO of Dubai's Millennium Finance Corp, which will invest $10 billion in energy, media and telecommunications over the next five years, added, "In terms of finding leverage,

Islamic finance has made progress in adding depth." A number of business schools are adding courses on Islamic finance, BusinessWeek says.

London's Cass school is launching an Executive MBA program in Dubai this fall, saying it sees a demand for more MBAs with experience in the area.

Islamic finance is expanding its reach across sectors ranging from global bond issuance to hedge funds - and even retail banks and home buyers in the U.S.

That portends increased job opportunities for individuals able to work with Sharia-compliant finance concepts that bear exotic names such as Sukuk, arboon and ijara.

"With the Middle Eastern economy booming, partly thanks to soaring oil wealth, the Islamic financial industry has been expanding at a clip of about 15% a year, according to accounting firm KPMG, and is on pace to reach $1 trillion in two years.

The money is seeking new outlets and Western financial institutions are seeking new clients - opening the door for more aggressive methods to reconcile two worlds that don't easily mesh," The Wall Street Journal reports. Separately,

Islamic Finance Information Service reported that worldwide issuance of Islamic bonds, known as Sukuk, soared 75 percent in this year's first half, to a record $24.5 billion. Issued primarily by Muslim-based institutions like the government of Malaysia and the Qatar Real Estate Investment Company, the investments allocate risk among parties to comply with the Quran's prohibition on paying or receiving interest. While marketed mainly within Muslim countries, international Sukuk bonds sold to global investors make up a growing share of the total market. Deutsche Bank was the leading underwriter of international Sukuk bonds, with $952 million issued this year. Meanwhile, Islamic finance is making headway in other, less obvious places. Thursday's page-one WSJ story explains how an American-born Islamic finance pioneer is marketing a Sharia-compliant trading system to hedge funds, and has also helped various banks in the U.S. create mortgage alternatives for Muslims buying homes here. Guidance Financial Group says it's provided over $1 billion in Sharia-compliant home financing in the U.S. The five year old Reston, Va.-based company operates in 20 states and Washington, D.C.

I've noticed a new program , which tries to portray itself as an Islamic CFA, it's called the Certified Islamic Finance Professional, or CIFP.

If I'm not mistaken it was created in Malaysia, which is at the forefront of Islamic finance.
Another thing i noticed, is that they offer a scholarship program for the CIFP program.
A link to the details of the program and quick facts...http://www.inceif.org (http://www.inceif.org/)http://www.bnm.gov.my/index.php?

Honesltly, it's the first time I've heard of this, is it just another TLA, or in this case (FLA) Four Letter Acronym? I don't think it's even close to the other designations, but it does fill a niche for those who might be interested.:)

The Rest @ Quantnet

Is al Qaeda trying to Influence US Politicians

2005-08-15T10:06:00.000-07:00

“If they were to allow the whole picture to emerge… certain elected officials will stand trial and go to prison.” – Sibel Edmonds By Lynn Grant

08/15/05 "International Post" -- --- CHICAGO, Illinois, Aug 15 (IP) – During the current flurry of September 11th related news, one item has gone largely unnoticed.

Reports of former FBI translator Sibel Edmonds’ allegations concerning improper financial ties between House Speaker Dennis Hastert and Turkish officials and businessman have become a source of discontent for beltway insiders on both sides of the aisle.

However, the recent coverage has not addressed why Sibel Edmonds’ information regarding Speaker Hastert’s dealings with the Turks necessitated an in-depth investigation by the September 11th Commission.

In an August 10, 2005 interview about her reported allegations, Edmonds was asked, “What are you alleging about the Speaker of the House?” Though under a strict gag order, she replied:

“I have been giving all the details to the appropriate channels. And they have been confirmed. And what I have said all along is the fact that as far as the 9/11 is concerned, September 11 is concerned, these departments -- and when I say “these departments,” the Department of Justice, the Department of State, and the Department of Defense -- have intentionally blocked the investigations of real -- the real criminals in this country. …

Most of al Qaeda’s funding is… through narcotics. And have you heard anything to this date, anything about these issues which we have had information since 1997?
And as I would again emphasize, we are talking about countries. And they are blocking this information, and also the fact that certain officials in this country are engaged in treason against the United States and its interests and its national security, be it the Department of State or certain elected officials.
While alluding to treason, Edmonds’ reply indicates that her allegations about Speaker Hastert are linked to al-Qaeda and the September 11th attacks.

To understand this link, it is necessary to examine the substance of Mrs. Edmonds’ allegations, as reported in the recent issue of Vanity Fair:

A large part of her work at the F.B.I. involved listening to the wiretapped conversations of people who were the targets of counter-intelligence investigations.…

Many involved an F.B.I. target at the city’s large Turkish Consulate, as well as members of the American-Turkish Council and the Assembly of Turkish American Associates. Some of the calls reportedly contained what sounded like references to large scale drug shipments and other crimes. …

One name, however, apparently stood out – a man the Turkish callers often referred to by the nickname “Denny boy.” It was the Republican congressman from Illinois and Speaker of the House, Dennis Hastert.

According to some of the wiretaps, the F.B.I.’s targets had arranged for tens of thousands of dollars to be paid to Hastert’s campaign funds in small checks. Under Federal Election Commission rules, donations of less than $200 are not required to be itemized in public filings.

The Vanity Fair article adds:
The targets reportedly discussed giving Hastert tens of thousands of dollars in surreptitious payments in exchange for political favors and information. …

“She told us she’d heard mention of exchanges of information, dead drops—that kind of thing,” a congressional source says. “It was mostly money in exchange for secrets.” …

There was talk, she told investigators, of laundering the profits of large-scale drug deals and of selling classified military technologies to the highest bidder. …

“There was pressure within the bureau for a special prosecutor to be appointed and take the case on, “the [FBI] official says. Instead, his colleagues were told to alter the thrust of their investigation – away from elected politicians and toward appointed officials. “This is the reason why Ashcroft reacted to Sibel in such an extreme fashion [invoking the rarely used State Secrets Privilege],” he says “It was to keep this from coming out.”
Though a Hastert spokesperson has dismissed Edmonds’ allegations and no evidence is presented confirming Hastert received illegal payments, the article reports on another wiretap in which “a senior official at the Turkish Consulate is said to have claimed in one recording that the price for Hastert to withdraw the resolution [recognizing the Turkish slaughter of Armenians in the early 1900s as Genocide] would have been at least $500,000.”
The targets of the wiretaps translated by Edmonds were heavily concentrated near Hastert’s Chicago-area congressional district:
Vanity Fair reveals that the FBI’s investigation centered on Speaker Hastert’s Chicago-area district:
One counter-intelligence official familiar with Edmonds’s case has told Vanity Fair that the F.B.I. opened an investigation into covert activities by Turkish nationals in the late 1990’s. That inquiry found evidence, mainly via wiretaps, of attempts to corrupt senior American politicians in at least two major cities - Washington and Chicago. …

In December 2001, Joel Robertz, an F.B.I. special agent in Chicago, contacted Sibel and asked her to review some wiretaps. Some were several years old, others more recent; all had been generated by a counter-intelligence that had its start in 1997. “It began in D.C.,” says an F.B.I. counter-intelligence official who is familiar with the case file. But “it became apparent that Chicago was actually the center of what was going on.”

These disclosures about Edmonds’ targets help to clarify her past statements to the press.
For example, when asked in a January 2005 interview if she had any information that would tie the targets of her FBI wiretaps to the September 11th attacks or Osama bin Laden’s organization, Edmonds replied, “Through certain activities with money laundering, and narcotics and illegal weapons procurement. Yes.” (audio)

More specifically, Edmonds wrote in a July 2004 article that she has “firsthand knowledge of ongoing intelligence received and processed by the FBI since 1997, which contained specific information implicating certain high level government and elected officials in criminal activities directly and indirectly related to terrorist money laundering, narcotics, and illegal arms sales.”
Yet Edmonds may not be the only well-known FBI Whistleblower with connections to this 9/11-related investigation in Chicago.
Beginning in the mid-1990s, FBI Special Agent Robert Wright was given orders to investigate several Chicago-based businessmen with ties to Turkey – and Osama bin Laden.
Special Agent Wright shared details of his investigation with Brian Ross of ABC’s Primetime Live in 2002:

ROSS: Their story begins in the mid-1990s. With growing terrorism in the Middle East, the two agents were assigned to track a connection to Chicago, a suspected terrorist cell that would later lead them to an Osama Bin Laden connection.

WRIGHT: We had a cell in Chicago, right. And that was, that was the premise of how we got the investigation going.

ROSS: But Wright says he soon discovered that all the FBI Intelligence Division wanted him to do was to follow suspected terrorists around town and file reports, but make no arrests.

WRIGHT: The supervisor who was there from headquarters was right straight across from me and started yelling at me, “You will not open criminal investigations. I forbid any of you. You will not open criminal investigations against any of these intelligence subjects.”

ROSS: You’re on the Terrorism Task Force and you were told you will not open criminal cases?

WRIGHT: Yes.

ROSS: In 1998, Al-Qaeda terrorists bombed two American Embassies in Africa, killing more than 200 people. The agents say some of the money for the attack led back to the people they had been tracking in Chicago, and to a powerful Saudi Arabian businessman, this man, Yassin Kadi, who had extensive business and financial ties in Chicago. Yet, even after the bombings, the agents say headquarters ordered no arrests.

WRIGHT: Two months after the embassies are hit in Africa, they want to shut down the criminal investigation. They wanted to kill it.

ROSS: The move outraged the Federal Prosecutor in Chicago, who says Agents Wright and Vincent were helping him build a strong criminal case against Kadi and others.

MARK FLESSNER, FORMER FEDERAL PROSECUTOR: There were powers bigger than I was in the Justice Department and within the FBI that simply were not going to let it happen. And it didn’t happen.
Wright’s investigation appeared to have had little effect on Chicago businessman Yassin Kadi. The Boston Globe reported in 2002, “Qadi was so well respected that he escorted former president Jimmy Carter around a Saudi women’s college in 2000.”
Though a presidential escort, Kadi’s al-Qaeda ties are so widespread, agents working on his investigation once pondered whether he may have been Osama bin Laden. During a June 2003 conference at the National Press Club, Special Agent Wright declared:
On June 9, 1998… I became the only FBI agent before 9/11 to utilize the civil forfeiture laws of the United States to seize $1.4 million in international terrorism assets from a Middle Eastern terrorist group. The original source of these seized funds was Yassin Kadi, a Saudi businessman. During 1998, an assistant United States attorney and I discussed the possibility that Mr. Kadi might actually be Osama bin Laden, or at least a close associate of bin Laden’s. …

However, my repeated attempts requesting FBI’s international terrorism unit to investigate Kadi’s financing of international terrorism was ignored. …

Four years later, only three weeks after the September 11 attacks, Mr. Kadi was designated by the United States government as the financier of Osama bin Laden.
Kadi, now 48, acted as ‘the financier of Osama bin Laden’ not only in the Chicago-area, but in Turkey as well. Two months after 9/11, The Turkish Daily News published an article detailing Kadi’s investments entitled “Osama bin Laden’s ‘Cashier’ in Turkey”. The Turkish Daily added:
Kadi, who was living in Istanbul, fled from Turkey following the Sept.11 attack. Kadi is a partner in two Turkey-based companies, the Karavan DisTicaret, a foreign trade company, and Ella Film-Produksiyon, a movie company. He once owned a 90 percent stake in Karavan and 30 percent in Ella but more recently these stakes have changed due to capital expansion.
In March 2005, Turkish authorities concluded an investigation into Yassin Kadi’s suspected links with al-Qaeda. The Arab News described the probe’s findings:
Turkey’s chief public prosecutor has formally ruled that there is no evidence whatsoever to suggest that Saudi businessman and philanthropist Yassin Abdullah Al-Qadi has had contact with or has assisted the Al-Qaeda terrorist organization. …

The probe concluded that, far from being a member or supporter of Al-Qaeda, Al-Qadi was above board and his actions were at all times wholly legitimate.
Turkey’s Prime Minister, Recep Tayyip Erdogan, took no issue with his chief prosecutor’s questionable ruling. Though few familiar with Turkish politics would be surprised at Prime Minister Erdogan’s position.
In November of 2001, The Turkish Daily News published an article with the headline ‘Tayyip – bin Laden Relationship’ referring to Prime Minister Recep Tayyip Erdogan. The article provided translation of a Turkish language report one of the country’s largest newspapers which stated, “A Cumhuriyet headline said, referring to Justice and Development Party (AKP) leader Recep Tayyip Erdogan: “… Al Kadi’s business partner Faruk Sarac is a close friend of the Erdogan family.”
Though the Turkish Prime Minister is a close family friend of a business partner of bin Laden’s financier, this may be nothing more than a coincidence.
However, another report seems to cast doubt on the coincidence theory. The Turkish Daily News reported in October 2001:
Hurriyet said: “Cuneyd Zapsu is the partner in Turkey of Saudi businessman Yasin al-Qadi whose assets in the United States have been frozen because he has links with terrorism. Zapsu, one of the founders of the AKP, is Recep Tayyip Erdogan’s closest friend.”
Some Turks consider Zapsu to be their own version of Karl Rove. Earlier this year Prime Minister Erdogan sued a news contributor because of a political cartoon depicting Zapsu perched on Erdogan’s back. And in late 2004 The Economist reported:
Secular Turks… fear that Mr Erdogan might use his muscle to expand the role of religion in public life. The real worry should be that more power could encourage his authoritarian streak. Even today only a handful of his advisers, among them Cuneyd Zapsu, a wealthy businessman, and Omer Celik, his youthful speech-writer, dare to disagree openly with Mr Erdogan.
The terrorist tendencies are not confined solely to Erdogan’s closest friends and advisors. The Prime Minister himself has been involved in extremist behavior.
According to The Turkish Daily News, “A Cumhuriyet headline said, referring to the Istanbul Municipality during Erdogan’s time as mayor, “The headquarters of religious reactionaryism [sic].”
While Mayor of Istanbul in the 1990s, Erdogan was jailed for four months by Turkey’s secular military after reading an Islamic poem containing the phrase, “Mosques are our bayonets, the domes our helmets and the believers our soldiers.”
Erdogan imprisonment began in 1998, after a military coup forced his political party from power. Less than four years later, Erdogan’s party resumed power and the national hero soon became Turkey’s Prime Minister.
The Prime Minister’s life story reads like a movie script: a man of destiny and vision, who can overcome any obstacle his path. Erdogan is surrounded by leaders who have been by his side from early on in his political career, including his Foreign Minister Abdullah Gul and Parliamentary Speaker Bulent Arinc. An April 1998 report in The Turkish Daily News stated:
Cumhuriyet reported that the prison sentence Istanbul Mayor Recep Tayyip Erdogan has been given has come as a relief to the older generation. … Meanwhile, Abdullah Gul and Bulent Arinc are expected to come to the foreground as the younger generation’s potential candidates.
Another 1998 Turkish news article reported:
Commenting on the prison sentence given to Istanbul Mayor Erdogan, Gul said… “This incident will add strength to our cause -- to Erdogan’s own cause and to our party.” …

Arinc said that they had not expected Erdogan to receive a sentence of this kind… “We have joined our fates with our friend, Tayyip Erdogan.”
Erdogan, Gul and Arinc would soon become the three most powerful men in Turkey. Such power combined with the Erdogan administration’s various ties to Osama bin Laden should cause alarm among American officials engaged in the War on Terror.
Yet even post-September 11, 2001, the result has been the opposite. During a 2002 visit with the Prime Minister in Turkey, Dennis Hastert stated:
It was a very good meeting that we had with the new Prime Minister. … We are committed as our country, the United States, to work with Turkey, to carry on. We see Turkey as a very stable country, as a matter of fact the model for stability and moderation and democracy.
Despite the Turkish government’s refusal to grant coalition forces access to key military bases during the 2003 invasion of Iraq, Speaker Hastert never wavered in his support of Turkey. According to Turkish Speaker Arinc, Hastert declared, “We respect your parliament’s decision. Our Congress does the same thing from time to time. It is nothing to be offended by.”
In late 2004 Hastert made another trip to Turkey, as The Washington Post reports:
Folks in Europe are still talking about that splendid, 10-day, pre-Christmas tour of Europe led by House Speaker Dennis Hastert (R-Ill.) to attend the 60th anniversary ceremonies of the Battle of the Bulge. The group stopped to… visit more troops at Incirlik air base in Turkey…

Support personnel... [were] amazed the plane got off the ground in Turkey -- what with all the fine rugs and pashminas -- not to mention some Turkish-made shotguns Hastert and Dingell bought.
With such a display of hospitality, it is not surprising that Speaker Hastert invited his Turkish friends for a visit in May 2005. The Anatolia News Agency reported on the trip:
Turkish Parliament Speaker Bulent Arinc has indicated today that his visit to the US Congress will be the first ever one by a Turkish parliament Speaker…

Arinc will be in Washington DC upon an invitation from US House of Representatives Speaker Dennis Hastert.
A Turkish government website added:
Parliament Speaker Bülent Arınç visited Washington between May 24-27 as the guest of Dennis Hastert, Speaker of the US House of Representatives. Arınç also attended a reception hosted in his honor by Hastert. …

Arınç, who completed his meetings in Washington D.C. arrived in Chicago on May 27. …

Arınç, who got information from Turkish Consul General Naci Koru about the work of the Turkish Consulate General in Chicago on Saturday… met Turkish community in Chicago on May 29.
The previous passage would have seemed relatively innocuous, if not for the recent Vanity Fair article which included passages such as:
“It began in D.C.,” says an F.B.I. counter-intelligence official who is familiar with the case file. But “it became apparent that Chicago was actually the center of what was going on.” …

The FBI’s investigations into a senior official at the Turkish Consulate is said to have claimed in one recording that the price for Hastert to withdraw the resolution would have been at least $500,000. …

In all, says a source who was present, she [Edmonds] managed to listen to more than 40 of the Chicago recordings supplied by Robertz. Many involved an F.B.I. target at the city’s large Turkish Consulate… and the Assembly of Turkish American Associations.
It should come as little surprise that while in the U.S., Arinc visited the ATAA, according to the Anatolia News Agency:
Turkish Parliament Speaker Bulent Arinc, who is currently in the United States upon formal invitation of the U.S. House of Representatives Speaker Dennis Hastert, met representatives of the Jewish community and of the Assembly of the Turkish-American Associations (ATAA) on Wednesday.
Though even without the recent allegations by Sibel Edmonds, the following report from The Turkish Daily News regarding Prime Minister Erdogan’s 2004 trip stateside to meet President Bush may have raised an eyebrow:
Prime Minister Recep Tayyip Erdogan… first arrived at the Peninsula Hotel in Chicago. …

After the concert, Chicago Municipal Mayor Richard M. Daley held a dinner for Erdogan.
Welcome to America.

The Rest @Information Clearinghouse

Dahabshiil - Global Hawala from Somalia

2003-09-04T18:25:00.000-07:00

September 4th 2003I

nterview With Abdirashid Duale, CEO of Dahab Shiil Money Transfer CompanyINTERVIEW – September 4, 2003 (IRIN) - Dahab Shiil Group is the largest money transfer company in Somalia, with over 1,000 employees. After 11 September 2001, Somali money transfer companies came under international scrutiny and the biggest company Barakat was shut down after the US government accused it of links with terror groups - a charge vehemently denied by the company. Here Abdirashid M Duale, the CEO of Dahab Shiil, tells IRIN of some of the challenges facing the remittance business and his company in particular.

There have been accusations that Somali remittance companies are not transparent in their operations. How transparent is Dahab Shiil?

The whole process of Dahab Shiil money transfer and remittance is fully transparent. Every transaction is meticulously recorded at the point of collection as well as payment.

Every sender is given a receipt and every recipient signs a payee-voucher.
So there is a paper as well as an electronic trail for each transfer.

Our records are open to any concerned authority that wishes to peruse. We not only bear our allegiance to our clients but also obey the laws of the countries that we operate in.

We have clear policies and modes of operation that are free of anomalies.

All transactions go to our head office for checking, processing and authorization.

Dahab Shiil works within its communities, it knows its clients, and its agent knows the sender and the recipient.

How wide is your reach in the Somali regions and in the Diaspora? For example can anyone send money to any place in Somalia, no matter how small?

Dahab Shiil has a large worldwide network. It has a representation of approximately 400 agents and branches in 34 countries around the world. It is represented in practically every country where there is a significant Somali community.

About the amount of money sent, yes, anyone can send whatever amount he or she wishes to any part of the Horn of Africa and also receive it through Dahab Shiil.

How many clients do you serve?

Well, when you speak of a client, the thought may be about the person sending the money. We at Dahab Shiil hold both the sender and the receiver as part of our network of clients. About the number of our clients, well at least every Somali in the Diaspora has engaged our services and the same can be said of the Somalis living in the Horn and East of Africa.

How much money do you handle in an average year and what is the average transfer?

Over 90 percent of the transactions still consist of small amounts of less than $200 sent mainly from Europe and North America to support dependants or to help relatives and friends out of difficulties.
These small amounts of transfers sent through us when added together amount to millions of dollars a year.
However, a significant number of transactions relate to investments, commerce and social development projects initiated in the region of the Horn of Africa.
For the Somali business sector, Dahab Shiil is their main gateway to the rest of the world.
Barakaat was known for providing people with small loans to start businesses and served as a place to deposit money safely for a short term.

Do you provide such services?

Dahab Shiil acts as a financial institution for a wide spectrum of the Somali society, whether individuals, enterprises or international organisations and provides a range of services to its clients, including small loans.

It also facilitates international payments for imports. As people trust Dahab Shiil with their money, it serves as a conduit for investment funds, and hence plays a major role in the development of the country.

Dahab Shiil works with United Nations agencies as well as other international organisations in the region, facilitating their development and humanitarian projects.

Given the fact that money transfer companies, likes yours, are under great deal of pressure since September 11, do you have any plans to set up a bank in the future?

We are already existing as a bank in Southern Somalia where we are offering all the services of an ordinary bank and we are currently negotiating with the authorities in Somaliland towards achieving the same. Our vision is to become the first fully-fledged Somali Commercial Bank that works in partnership with foreign banks.

Dahab Shiil recently acquired a licensed foreign exchange in Dubai and Djibouti, which will make it possible for Dahab Shiil to access international banking services including the use of the standard swift code.

What has been your greatest challenge since September 11?

The events of September 11 have had an enormous impact on the financial services sector. These difficulties are not unique to Somali remittance companies but have affected all money transfer businesses throughout the world. Before this date there was little regulation governing remittance, and neither law enforcement agents nor legislators paid much attention to it.

After September 11, it suddenly caught international attention and became the focus of the media and governments.

Rules and regulations were rushed through houses of parliament and government departments.
In a very short time we found ourselves faced with a host of guidelines and laws to follow and comply with.
In response we embarked on a campaign to apply for and register our operations with concerned authorities in all the countries where we are represented.
Secondly, we trained staff on rules and procedures
Thirdly we published guidelines for our agents on how to detect suspicious transactions and report them.
In addition, Dahab Shiil will soon introduce propriety software that will make it possible for all its agents to provide near real time transfers of funds and make reporting requirements mandatory.
The new software program will incorporate a "lookout list" published by international authorities.
Some of the challenges we face can only be addressed either by a recognised Somali authority or international agencies concerned about the welfare of the Somali people.

The European Union and United Nations Development Programme have made great efforts in the last two years to study and understand the issues facing Somali remittances. But the sector has still some way to go to fully realise its potential, and needs technical and political support from the international community.

How does Somali society benefit from your operation?

The Somali money transfer sector has expanded and has come a long way in a relatively short time. It enabled the Somali community to survive on its own and today it is a lifeline service on which the livelihood of millions of Somalis depends. The importance of this service cannot be over-estimated. Remittances from the Diaspora save lives daily. One can say without much argument, that without remittances coming from abroad many people would not have survived the prevailing poverty conditions and the huge unemployment.

Without it the figures for asylum seekers migrating to Europe and North America would have steeply risen as the poverty-stricken community, with no meaningful sources of livelihood, migrated for "better lives" abroad.

Investment and reconstruction would have been much more difficult. Remittances also play an instrumental role in the peace-building that has taken place in many Somali communities and the international community would have been asked to provide much more financial assistance than it currently provides.

The Rest @ Somaliland Times