Israel Matzav

UNRWA using bank sanctioned by US for money laundering

Writing on Forbes Magazine's web site on Thursday, Claudia Rosett reports that UNRWA is raising funds for the 'reconstruction' of Gaza using a Syrian government-owned bank that has been the subject of United States government sanctions as a source of money laundering.

I pulled up the Web site on Tuesday of the U.N.'s lead agency in Gaza, the U.N. Relief and Works Agency for Palestine Refugees in the Near East, best known as UNRWA. There, on UNRWA's home page, as of this writing, is a photo of the U.N.'s Ban Ki-moon, standing in a damaged UNRWA warehouse, backlit by what appear to be rays of the sun, during his visit in January to Gaza. Next to Ban's photo is a blurb about his appeal for "crucial funds needed for Gaza's reconstruction after the recent Israeli offensive."

But just below Ban's photo is where it gets interesting. The same Web page lists several banks, complete with Society for Worldwide Interbank Financial Telecommunication (SWIFT) codes and account numbers through which benefactors are invited to send money to UNRWA for its "Special Gaza Appeal."

One of them is the state-owned Commercial Bank of Syria, headquartered in Damascus, which is an intriguing choice for Ban and UNRWA to condone, because for the past five years this bank has been under sanctions by the U.S. Treasury as an institution of "primary money-laundering concern."

In 2004, Treasury imposed sanctions on the Commercial Bank of Syria, alleging it had laundered illicit proceeds from the U.N.'s Oil-for-Food program in Iraq, and had also handled "numerous transactions that may be indicative of terrorist financing and money laundering." According to Treasury, this included two accounts "that reference a reputed financier for Usama bin Laden."

In 2006, Treasury finalized its rule, which is still current, against the Commercial Bank of Syria. Under-Secretary Stuart Levey alleged that the bank had been used by terrorists to move money, and "as a state-owned entity with inadequate money laundering and terrorist financing controls, the Commercial Bank of Syria poses a significant risk of being used to further the Syrian Government's continuing support for international terrorist groups." Among the terrorist groups cited as examples of such clients were Hezbollah in Lebanon, and such denizens of Gaza as Palestinian Islamic Jihad, the Popular Front for the Liberation of Palestine and Hamas.

UNRWA's choice of this bank is all the more curious in light of the lifestyle choices of a number of Hamas leaders, such as Khaled Meshal, who are based not in Gaza, but work "in exile" in Damascus. According to a Council on Foreign Relations backgrounder released in 2006, Meshal has served Hamas from Damascus as head of the terrorist group's politburo, and as chief strategist and fundraiser. In 2006 he was alleged by Israeli then-Vice Premier Shimon Peres to have ordered the kidnapping into Gaza of Israeli soldier Gilad Shalit, who has not been released.

It's hard to know whether it is of any concern to UNRWA that one of the conduits headlined by Ban Ki-moon for its Gaza relief appeal is a U.S.-censured bank, headquartered in a country that hosts Hamas leaders such as Meshal, and is designated by the U.S. as a state sponsor of terrorism. The U.N. has no definition of terrorism. UNRWA, which employs mostly local Palestinian staff, and has never had an independent outside audit, is not bound by U.S. sanctions. My queries to UNRWA about this Syrian banking connection were answered evasively by a spokesperson, who stated in an email that "UNRWA's strict financial regulations, and its close oversight of all resources contributed to it, serve to ensure that funds are used appropriately in our humanitarian relief activities."

It's likewise hard to say whether the U.S. State Department cares that U.S. funds might mingle via UNRWA with money flowing to Gaza through the Commercial Bank of Syria. My queries to the State Department received no reply.

Read the whole thing. As of Friday morning, the Commercial Bank of Syria is still one of the options for sending money.

posted by Carl in Jerusalem @ 10:47 AM