New US Treasury blacklist shows Turkey became a haven for terror financing schemes

Nordic Monitor

 

A new list of companies and individuals designated by the US Treasury as supporters and sponsors of terrorist organizations shows that Turkey was effectively turning a blind eye to extremist Islamists in the country.

The US Treasury has appended to its list of terror supporters 15 new companies and individuals, 10 of which are based in Turkey. They were providing financial and logistical support to such extremist Islamist groups as the Islamic State in Iraq and the Levant (ISIL), Hamas, Hezbollah and the Islamic Revolutionary Guard Corps Quds-Force (IRGC-QF) without encountering any restrictions from Turkish authorities.

The announcement by the US Treasury came out as a press release on September 10, 2019, stating that these entities would be subject to sanctions aimed at preventing them from engaging in any kind of operation in the international financial system.

The US Treasury expects countries to cooperate with the US in freezing the assets and properties of the entities on the list and report them to the Office of Foreign Assets Control (OFAC). Any company or individual who chooses to engage in business affairs with any person or entity on the list may also be subject to similar sanctions by the Treasury.

 

Steven Mnuchin, secretary of the US Treasury.

 

Turkey has frequently been accused of deliberately supporting ISIL, or at least turning a blind eye when the terrorist group was flourishing back in 2013 and 2014 through a weak border policy. The Turkish government rejects these assertions, claiming it was the most active anti-ISIL force in the region, recalling its cross-border operations, which only came after ISIL was effectively defeated by the US-led coalition.

The US has also asked Ankara time and again to block Hamas’s activities in the country, which the Turkish government refuses to do as it has not designated the Palestinian organization as a terrorist entity.

Of the 15 terrorists and sympathizers targeted by the broader authorities of EO 13224, 10 are based in Turkey: companies Redin Exchange, Saksouk Company for Exchange and Money Transfer, Al Haram Foreign Exchange, Al-Khaldi Exchange, Al-Hebo Jewelry Company and SMART, and individuals Zaher Jabarin, Marwan Mahdi Salah Al-Rawi, Ismael Tash and Muhamad Ali al-Hebo.

 

HAMAS TIES

According to the scheme outlined by the US Treasury, Redin Exchange stands out as a key player in money transfer from Turkey mainly to Hamas. The company not only provided financial sponsorship of this group but also offered material and technological support.

Some examples of this backing include a transfer of $10 million in March 2019 to Hamas’s operational arm, the Izz-Al-Din Al-Qassam Brigades, also involving Treasury-designated financial facilitator Muhammad Sarur. Redin’s footprints were seen throughout 2017 on several occasions while transferring tens of millions of dollars to Hamas, according to the Treasury release. In July 2018, Redin Exchange paved the way for the delivery of $4 million, which Iran’s Quds Force sent for Hamas. Redin was also responsible for sending $2 million from the Quds Force to Hezbollah and Hamas in May 2018, too. In 2017 July, the company was also the intermediary for a transfer of $5.5 million from a senior Hamas leader to Hamas Finance Chief Zaher Jabarin, who is also Turkish-based and was one of the persons added to the list.

Jabarin is responsible for the management of Hamas’s yearly budget, totaling tens of millions of dollars from a variety of sources around the world. He is also described in the Treasury note as responsible for searching for new ways to increase the organization’s revenues. Jabarin was thought to be the mastermind in developing a financial network in Turkey that would allow Hamas to raise, invest, and launder money prior to transferring it to Gaza and the West Bank.

He is also portrayed as the point of contact between Hamas and the IRGC-QF, one of the main financiers of Hamas. Redin was used by him in pursuit of this goal.

 

President Recep Tayyip Erdoğan met with the leader of Hamas’ political bureau, Khaled Mashaal, in Ankara in August 2015.

Redin’s leader, or more accurately its chief executive officer (CEO), Marwan Mahdi Salah Al-Rawi, also made his way onto the US Treasury’s expanded list of terror supporters. The US Treasury’s note on Al-Rawi asserted that he was aware of a transfer of about $500,000 in January 2018 to ISIL’s financial facilitator, Walid Talib Zughayr al-Rawi.

Redin’s Deputy CEO Ismael Tash (a Turkish man whose name is written as İsmail Taş in Turkish) was in the Treasury’s note, too. Tash is responsible for Redin’s foreign relations, was a key player in many financial transfers from Iran to Hamas as of January 2019 and was deeply involved with Hamas facilitators. According to the findings as included in the US Treasury statement, Tash has had continuing dealings with a money transfer channel handled by Treasury-designated Hamas financial facilitator Muhammad Sarur. This contact has been up and running since at least 2017 mainly to transfer money from al Quds to Hamas and in particular Hamas’s operational arm in the Gaza Strip.

Tash seems to be running export/import company SMART, but since it shares the same address as Redin Exchange, the Treasury believes it is only a front company. Yet SMART was also added to the blacklist.

SUPPORTING ISIL

In addition to these companies, the US Treasury’s latest move also included others that were aiding and abetting ISIL. Saksouk Company for Exchange and Money Transfer is one of them. Saksouk was said to have materially assisted, sponsored or provided support for ISIL. The company handled funds transfers on behalf of ISIL’s Syrian-based members in late 2018. But this was not the only hint indicating the company’s clandestine relations with the terrorist group. In mid-2017 ISIL financial facilitator Jubayr al-Rawi, whom US officials also caught while involved in another transaction with Redin, used Saksouk in his financial operations throughout the Middle East. ISIL’s financial facilitators and affiliates were listed as points of contact for Saksouk branch locations in Syria, Lebanon and Turkey. In another incident around July 2017, the company was again part of a money transfer from the Syrian-based ISIL Immigration Logistics Committee (ILC) to an ISIS ILC affiliate.

Like Saksouk, the Turkish-based Al Haram Exchange also actively assisted, sponsored or provided support for ISIL terrorists. For instance, a memo to all ISIL members in Syria in mid-2019 instructed them to carry out all financial transactions with Al Haram Exchange. This company was also tracked while mediating a money transfer between ISIL in Syria and Belgium as of mid-2017.

Established in Turkey’s Gaziantep province, known as one of the strongholds of ISIL in Turkey, Al-Khalidi Exchange was also included on the US Treasury’s blacklist as a supporter of ISIL. All of Al-Khalidi’s offices in Turkey and Syria were run by two individuals who knowingly assisted ISIL members in financial transfers. The company’s contact point in the Syrian town of Mayadin was also known to be the terrorist organization’s Internet café, which also served as a money transfer office.

 

 

According to the US Treasury, Al-Khalidi was the most important financial transfer office in the region used to move money to fund ISIL-held areas as of late 2016 and was the largest exchange office that helped ISIL. Hundreds of thousands of dollars per day passed through the office in Şanlıurfa, Turkey. Al-Khalidi was also one of the exchange offices Fawaz al-Rawi, who was the owner and operator of the Hanifa Currency Exchange in Albu Kamal, Syria, used. In addition to Şanlıurfa, Al-Khalidi had offices in cities like İstanbul and İzmir, too. And, as stated by the US Treasury, these offices were actively conducting money transfers and transactions for ISIL. During this same timeframe, ISIL maintained a telephone directory of associates and managers of various ISIL offices that included Syrian-based locations for the Al-Khalidi Exchange and Al-Hebo Jewelry Company.

Al-Hebo was also designated as a supporter of ISIL financially, materially and technologically in this latest action by the US Treasury. It was based in Gaziantep as of late 2017 and was freely carrying out hawalas, or money transfers, in an ISIL scheme to convert gold into cash in order to more efficiently and secretly send funds from Turkey to ISIL sleeper cells in Iraq and Syria. The US Treasury noted that the company was established in early 2017 in ISIL’s headquarter city of Raqqah and had been actively involved in cash transfers to the terrorist organization.

Owner Muhamad Ali al-Hebo was designated as a terror supporter, too. He was accused of procuring precious metals to enable ISIL to produce its own ISIL coinage. He was the general manager of an Al-Hebo location in Raqqah as of late 2016, and prior to this he was responsible for the running of the company’s Şanlıurfa base in Turkey. A few months later, he also began running Al-Khalidi as well. During this time, Muhamad Ali al-Hebo was operating jewelry stores and money exchange/transfer businesses in Turkey’s provinces of İstanbul, Urfa and Gaziantep.

MORE EFFECTIVE HANDLING

OFAC utilized newly enhanced counterterrorism sanctions authorities, referring to new tools from President Donald Trump’s recently updated Executive Order (EO) 13224.

Secretary Steven T. Mnuchin notes the new EO was a dynamic response to empower OFAC with better tools to fight the dynamic threats that terrorism continuously poses to the world. “These new authorities will allow the U.S. Government to starve terrorists of resources they need to attack the United States and our allies, and will hold foreign financial institutions who continue to do business with them accountable,” said Mnuchin. “They serve as a powerful deterrent to radical terror groups and those seeking to aid their nefarious goals.”

EO 13224 was first signed by President George W. Bush 12 days after the 9/11 attacks to disrupt the financial infrastructure of groups that OFAC designates as terrorist by mainly blocking the ways terrorism-affiliated entities access the international financial system. But since its introduction, terrorist groups have invented new methods to circumvent the US barriers, and the US has reacted to these new ways by continuously updating the EO.

With the new EO, the US is now able to more easily and efficiently designate leaders and officials as terrorists. It can also provide secondary sanctions against foreign financial institutions that have deliberately conducted or facilitated financial transactions for people or groups blacklisted as terrorist. As an example of such a secondary measure, the US Treasury can prohibit any such foreign financial institution from opening or maintaining a correspondent or payable-through account in the US. The new EO also eliminated EO 12947 to bring counterterrorism authorities under a single sanctions program. This conjoining also aims at making EO 13224 a better tool for the defense of the Middle East Peace Process.

Just a day before the list was released, Mnuchin was speaking outside the White House where he told reporters that the Trump administration was considering imposing sanctions on Turkey over the purchase of a Russian S-400 air defense missile system. “We’re looking at that, I’m not going to make any comments on any specific decisions, but we are looking at it,” Mnuchin said without specifying any potential targets.

Speaking of sanctions, the gloomiest threat for Turkey that may come from the US Treasury is a decision concerning the fines that will be levied on Halkbank over its involvement in a gold-for-cash scheme to circumvent US sanctions on Iran. There is no exact date for the announcement of this decision, but Turkish markets are expecting that it will happen soon.

 

The 29-page document that lists 267 US-sanctioned entities and individuals that have operations and/or links in Turkey:

 

US sanctioned list in Turkey

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