U.S.
Is Focusing on Dubai as Financial The emirates, which are about the size of
Center for Terrorists , / ,
TIMOTHY L O'BRIEN <%3
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New York Times
Every day, millions of dollars sluice through
bank accounts held in luminescent office
towers overlooking the Persian Gulf,
testimony to how this old trading port, with
its lucrative oil supplies starting to run thin,
has recast itself as the ultramodern
Switzerland of the Arab world.
But Western law enforcement and
intelligence officials say that Dubai's free-
wheeling financial environment — a mix of
modern wealth and ancient commerce —
has allowed the country to become an
important crossroads for financing terrorism.
United States officials are focusing closely
on Dubai, looking for ways to stop the flow
of terrorists' funds. But experts say there are
daunting difficulties to penetrating the maze.
"Contraband of all kinds moves through
there — liquor, cigarettes, precious gems,
you name it," said Larry Johnson, a former
counterterrorism official with the Central
Intelligence Agency and the State
Department. "Dubai is going to emerge as
one of the battlegrounds in terrorist
financing. It's a real, real problem and I don't
know anyone who has a handle on what's
going on there."
Describing the United Arab Emirates as a
clandestine rendezvous for planners of the
Sept. 11, 2001, attacks on the United
States, the officials say half of the plotters'
money — about $250,000 — was wired from
banks here to operatives of Al Qaeda in the
United States. In addition, American
intelligence agencies have tied Qaeda
money in banks here to the American
Embassy bombings in Kenya and Tanzania
in 1998.
Dubai's conduits for terrorist money, experts
say, include thriving Russian and Indian
organized crime syndicates as well as the
emirates' many free trade zones, which
allow the commingling of legal and illegal
commerce. But the most significant, elusive
conduit is the informal international money-
transfer network known as hawala.
New Jersey, are home to about 50 banks.
There are even more hawala operators —
about 80, most of them concentrated in
Dubai and many operating out of its fabled
gold souk, or market, its storefront windows
adorned by strands of intricately braided
gold.
Largely relied on by Middle Eastern and
Asian communities around the globe,
hawalas allow users to deposit money in
one country and have the sums honored by
related dealers elsewhere — permitting
expatriate workers here to send small
monthly sums home. Transfers from Dubai
to the Indian subcontinent, for example,
represent a significant sum: laborers from
southern Asia make up about half the
emirates' population.
"Hawalas are the 1,000-pound beasts in this
whole terrorist financial system," said a
senior American counterterrorism official
here. "We think billions of dollars move
through hawalas annually and we don't
know what percentage of that is dirty."
The Western officials assert that Dubai,
along with Pakistan and India, forms the
backbone of a system that abets terrorism.
At a private dinner here on Sept. 20 with
financial ministers from Dubai and other
Middle Eastern nations, as well as Pakistan
and India, the American Treasury secretary,
John W. Snow, asked his guests to tighten
their scrutiny of hawalas.
Others share Mr. Snow's concern.
"It's convenient and cheap for Osama bin
Laden to transfer cash from accounts in
Pakistan and southwest Asia through
Dubai," said Moyara Ruehsen, an
international policy professor at the
Monterey Institute of International Studies in
Monterey, Calif. "He doesn't need to use a
bank if he doesn't want to."
Officials of the emirates counter that since
the attacks in the United States, they have
strengthened their financial regulations, and
that hawala dealers, or hawaladars, were
recently required to register with the
government.