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Terrorist Financing in South Africa

John Solomon makes clear why international terrorists find South Africa so attractive, ‘With lawlessness, government corruption and a wide range of preferred terrorists financing methods available – al-Qaeda could indeed partake in illicit and unregulated trade in southern Africa to sustain itself’. The point made by Solomon can be illustrated by numerous examples. The case of Yassin al-Qadi, a US-designated terrorist financier who invested US $3 million for a 12 percent interest in Global Diamond Resources that mined diamonds in South Africa is but one such example. He also controlled New Diamond Corporation, an offshore company that had mining interests in South Africa. The case of Abd al-Muhsin al-Libi, also known as Ibrahim Tantouche, also points to how terrorists secure financing in South Africa. He set up two Al Qaeda financing fronts – the Afghan Support Committee and the Revival of Islamic Society. Both operated as charities that raised money for orphans; however, in reality the orphans were either dead or non-existent.

Other funding fronts were also established. Hezbollah established the Karbala Liberation Front in Johannesburg, which sent money to Hezbollah in Lebanon. Other so-called charitable foundations have also been established to fund terror organisations. In 1992, the same year in which Hamas became active in South Africa, the Al Aqsa International Foundation (AIF) was established in the country. According to Dutch security expert Ronald Sandee, Hamas’ political wing is in control of its office in Fordsburg, Johannesburg. By 2010, the Al Aqsa International Foundation found its way on the list of US designated terror organisations and fronts. Whilst AIF’s main mission was to collect funds in South Africa and send it to Hamas in the Palestinian Territories, it is also vital to note that staff of AIF was also actively involved in paramilitary training to South Africans. The first such training took place in July 1997 on a farm in Mpumulanga, South Africa. The dual nature of such structures is by no means confined to AIF. In South Africa, a seafood business called AOXI is alleged to act as an Al Qaeda coordinating unit for jihadis who have been trained in Mozambique and who subsequently illegally enter into South Africa.

The issue of terrorist financing in South Africa emerged again in January 2007, when the Sunday Times reported that two South African cousins – Farhad Ahmed Dockrat, the principal of the Darus Salaam Islamic College in Laudium, Pretoria and Dr. Junaid Ismail Dockrat – were proposed for consideration on the UN Security Council’s list of terror suspects, whilst already having been placed on the US Treasury Department’s list of Al Qaeda supporters. According to papers submitted to the UN Security Council, Farhad is alleged to be an Al Qaeda ‘facilitator and terrorist financier’ who gave R400,000 to the Taliban ambassador in Pakistan. Farhad Dockrat, who was previously detained in Gambia for suspected terrorist activities in 2005 was also alleged to have provided US $63,000 to the Al Akhtar Trust. This was a ‘charity’ that was designated as having provided support to Al Qaeda. Junaid, it is claimed, is also an Al Qaeda ‘financier, recruiter and facilitator’ who assisted in coordinating the travel of South Africans to Pakistan to train with Al Qaeda. Junaid Dockrat, it is alleged, raised US $120,000 for Hazma Rabia, the former Al Qaeda chief of operations who was killed in 2005 by the US in Pakistan.

Partly in response to these issues of terrorist financing, the South African government has tightened legislation through the Financial Intelligence Control Act, or FICA. However, the case of Mohamed Suleman Vaid, who on 25 April 2001 was arrested along with his wife while attempting to smuggle US $130,000 in local currency across the border with Swaziland, points to the weaknesses of FICA which is primarily aimed at formal banking transactions. The ensuing police investigation indicated ties to Al Qaeda via a Lebanese businessman. As Kurt Shillinger noted, it was established that in the 18 months prior to his arrest, Vaid had made this trip 150 times! It is also clear that with the formal banking transactions, there are problems. In 2009, the Financial Action Task Force (FATF) completed a review of South Africa’s compliance with FATF standards for anti-money laundering and combating the financing of terrorism. Here it noted that the country needs to pay closer attention at regulating trusts, monitoring financial institutions’ compliance with anti-money laundering legislation, and enhancing the disclosure of trans-border transfers of cash.

However, the FICA legislation cannot be implemented effectively through corrupt officials. In May 2010, for instance, a forensic investigation commissioned by the Department of Trade and Industry (DTI) uncovered another terrorist finance vehicle in South Africa, which involved Pakistani criminals taking advantage of the corruption occurring with the Companies and Intellectual Property Registration Office or CIPRO. The case involved tax fraud, money laundering, racketeering, organised crime, fraud and siphoning off millions of rands to fund international terrorism. One Pakistani suspect who is now in custody, Aliraza Siyed Naqvi, specialised in cloning legitimate companies through the registration with CIPRO of a fake company with the same name as a legitimate company and its own bank account. Monies meant for the legitimate business are then diverted to the fake one. Naqvi’s brother, Asad Abbas Naqvi, was listed as a dangerous terrorist by Pakistani authorities. Asad Abbas Naqvi was murdered in South Africa in December 2008.

The private forensic audit estimates that up to 285,000 fake or dubious companies were created in this way through the abuse of the CIPRO system. This scheme would never have occurred had it not been for corruption within CIPRO itself and the report identified 60 CIPRO officials as being involved in such suspicious activities. South African security agencies are also investigating the probable help these criminals and terrorists have received from corrupt officials within the South African Revenue Services (SARS).

As organised crime syndicates’ tentacles increasingly penetrate the apparatus of state, it is highly likely that terrorist financing would become a bigger problem for South Africa and the world.