EN Official Journal of the European Union CE 88/468

(2004/C 88 E/0482)

WRITTEN QUESTION E-3560/03

by José Ribeiro e Castro (UEN) to the Commission

(1 December 2003)

Subject: Al-Qa'ida — international funding networks

The Financial Times (UK) of 11 November 2003 reported that a UN report had revealed that despite ‘considerable progress’, al-Qa'ida and those funding it continue to operate on the international financial markets.

The international system set up to stop the flow of funds to al-Qa'ida is seriously endangered by the inadequate cooperation of many countries, legislative loopholes and the lack of political will to tackle this extremely serious problem.

The UN report makes particular reference to Youssef Nada and Ahmed Idris Nasreddin, administrators of the al-Taqwa financial Group, which the USA views as the most significant canvasser of funds for al-Qa'ida. European and North American researchers see the Group as the core of multiple terrorist activity funding networks, all benefiting from the collaboration of various Islamic financial and even charitable organisations.

The two men in question allegedly continue to have interests and property in Switzerland and Italy, despite their being classified as ‘terrorist financiers’, and their bank accounts being frozen.

Use of offshore financial centres and trusts appears to be the most common way of disguising the ownership and source of these financial flows.

Youssef Nada apparently travelled to Liechtenstein in January to change the registration of two companies linked to the al-Taqwa group, in violation of the UN-imposed ban.

Al-Qa'ida, the Taliban and their collaborators and associates, according to the report, still possess the ability to obtain, demand, receive, transfer and distribute considerable sums.

The Commission:

— what information does it have about these facts?

— is it aware of the existence of negotiations involving terrorists within the European Union?

— what information does it have as to the activities of the al-Taqwa Group on Community territory, and in countries with which the EU has special relations, such as the other members of the EEA?

— what measures has it taken or will it take to encourage compliance with the UN resolutions and prevent the movement of capital destined to fund terrorist organisations? What innovations and improvements would the Commission suggest? Is it already attempting to implement such improvements within the territory of the EU?

Answer given by Mr Patten on behalf of the Commission

(12 January 2004)

The Commission has taken note of the second Report prepared by a United Nations (UN) Monitoring Group chaired by Mr Chandler, which reports to the Al Qaeda and Taliban Sanctions Committee of the UN Security Council (hereinafter the UN Committee). This report, which was issued on 1 December 2003 and apparently seen by the Financial Times beforehand, concerns the implementation of the restrictive measures targeting Usama bin Laden and the Al Qaeda network which have been imposed by the UN Security Council in a number of Resolutions based on Chapter VII of the UN Charter.

The Commission considers that it is primarily up to the UN Committee and, indeed, the UN Security Council itself to review whether the information contained in the Monitoring Group's report justifies the imposition of any additional measures or an amendment of existing measures. The Security Council will review the relevant Resolutions in January 2004.

As regards the existing measures, it should be noted that Council Regulation (EC) No 881/2002 (1) requires the freezing of funds and economic resources of persons, groups and entities which have been identified by the UN Committee as meeting the conditions set out in Resolution 1267(1999) or in Resolution 1390(2002). The Regulation also prohibits making funds and economic resources available to such persons, groups and entities.

Regulation (EC) No 881/2002 restricts the use of funds and economic resources owned by the persons, groups and entities concerned. It should be noted that these measures are not tantamount to confiscation and that these persons, groups and entities thus continue to have interests and property until, in accordance with applicable (criminal or other) procedures of the Member States, a competent authority decides otherwise.

The Monitoring Group's second report describes some actions of Mr Youssef Nada and Mr Ahmed Idris Nasreddin by way of example of the continued use of shell companies and offshore trusts by persons, groups and entities listed by the UN Committee. The reason why the Monitoring Group selected these persons for an ‘in-depth inquiry’, as paragraph 70 of the report calis it, are not entirely clear. The example shows, however, that effective prevention of the financing of terrorism requires that adequate registration requirements apply as regards legal persons or entities. Only such requirements will allow the authorities to identify the beneficial owners of legal persons or entities.

Third countries such as Switzerland and Liechtenstein have not provided the Commission with any information about possible activities of Mr Nada and Al Taqwa Ltd. in the Community. It is up to the Member States to investigate whether the provisions of Regulation (EC) No 881/2002 have been infringed and whether legal persons or entities have links with persons, groups or entities which have already been identified by the UN Committee as meeting the conditions set out in Resolution 1267(1999) or in Resolution 1390(2002). Where appropriate, Member States should propose that the UN Committee makes a similar finding as regards the legal person or entity investigated.

(1) Council Regulation (EC) No 881/2002 of 27 May 2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Usama bin Laden, the Al-Qaida network and the Taliban, and repealing Council Regulation (EC) No 467/2001 prohibiting the export of certain goods and services to Afghanistan, strengthening the flight ban and extending the freeze of funds and other financial resources in respect of the Taliban of Afghanistan, OJ L 139, 29.5.2002.