Hamas Escapees May be Heading to Gaza From Egypt

Egypt riots escalate: The riots raging on in Egypt have spread into several prisons in the country Saturday, as at last eight detainees were reportedly killed in a jail holding political prisoners.

Prison guards reportedly fired live ammunition and tear gas in the northern Egypt prison as detainees attempted to stage a mutiny at the site, which also holds Muslim Brotherhood prisoners. Security forces were reinforcing their presence at jails throughout the country as result of the violence there.

Hamas sources have reported that a few Palestinian detainees have escaped Egyptian prisons during the unrest, and are making their way to the Gaza Strip.

• Meanwhile, medical sources in Egypt confirmed that the overall number of fatalities in the riots raging in Egypt since Tuesday has reached at least 82 people.
• Some 2,000 others were hurt in protests against President Hosni Mubarak's 30-year rule.
• Full-fledged chaos had been reported at several regions of Egypt, as the masses crowd public squares, and banks, government buildings, and businesses are being looted.
• In Cairo, some 1,000 protestors attempted to break into the Interior Ministry headquarters.
• Al-Jazeera reported that police forces were attempting to disperse the demonstrators using live fire. At least three people were shot and killed in the clashes, the network said.

Looting an lynching

• Overall, tens of thousands of Egyptians are demonstrating in the streets of Cairo and Alexandria, and according to some reports there is no security forces' presence on the streets.
• Elsewhere, reports are coming in about the torching of government buildings, police stations, and security headquarters nationwide.
• Some people have exploited the ongoing riots to settle the score with Egyptian business figures.

The al-Arabiya network reported a mass looting of businesses in the Suez area belonging to a prominent businessman, including a lynching at one of the sites.

Just like in Tunisia, reports are coming in of "popular committees" set up to prevent attacks on businesses and homes. Overnight, attempts were made to loot the Egypt National Museum.

Authorities in Egypt have declared that a curfew will be imposed in the country from 4 pm today to 8 am Sunday morning, yet enforcing it in the current atmosphere of total chaos seems a largely impossible task.

Egypt's business sector is attempting to minimize the damage, with trading in Cairo's stock exchange suspended following the massive 10.5% drop Thursday.

Local banks will not be operating Sunday for fear of looting, yet the country's Central Bank says that bank accounts are safe and that liquidity is not an issue.

According to a report by the Arab-language BBC Saturday afternoon, Egyptian army units were attempting to prevent protestors from breaking into the Central Bank in Cairo and looting it.

The Rest @ Y NetNews

Financing Jihad

This is the second half of testimony by Victor Comras before Congress, September 30th 2010. The First half reviewed successes against the Financing of terror.

What follows suggests issues for the next steps toward reducing the options available to Islamist financiers of jihad against the west; However, I was hoping for some newer innovative ideas.

-Shimron Issachar

*******************
Well, Mr. Chairman,

the fact is that US Banks are intricately networked into an international banking system that has not yet fully come to terms with halting terrorism financing.

And, while we have made great strides in cutting off the flow of money for terrorism from the United States,

1. Our banks remain awkwardly vulnerable to getting caught up in handling terrorist group-related transactions that originate overseas. This is because US banks must so heavily rely on the veracity and accuracy of the transactional information provided to them by their overseas clients and associates.

Background:

Following enactment of the increased “due diligence” and “know your customers” requirements contained in the Patriot Act, US banks moved quickly to re-assess their relationships with the foreign banks with whom they maintain a correspondent relationship. They had to assure themselves that these foreign banks were also taking the steps necessary to vet their clients and that they would accurately record and pass on required transactional information, including the correct identification of the beneficial parties involved. But, the fact is that this is not always the case.

And, in the fast and very competitive world of international financial transactions, these assurances are often shortchanged. Our banks must also rely heavily, therefore, on any cautionary information that our public sector regulatory agencies, such as Fincen, OFAC, and other relevant Treasury Department offices share with them.

• This cooperative relationship and information sharing is essential, and needs to be formalized.

Today, when US banks have doubts about the legitimacy of transactions they are required to file suspicious activity reports with FinCen. In most cases they still permit the transaction to be processed.

• However, when their doubts suggest the possibility of terrorism financing, they will usually place some kind of hold on the transaction.
• US Depository Institutions filed some 15,500 suspicious wire transfer reports in 2009. Of these, only about 545 involved possible terrorism financing concerns.
• How well they are actually doing in discerning such terrorist-related risks remains any ones guess.
• Nevertheless, the number of suspicion-of-terrorism SARS did increase some 8 percent last year.

Considerable strides have also been made with regard to the regulation and oversight of the myriad money services businesses operating in the United States. This sector has seen exponential growth in the volume of international financial transfers.

2. We must recognize, however, that at least one part of this sector – the informal mom and pop transfer mechanisms, such as Hawala, lack the wherewithal to closely vet the transactions they handle and they remain particularly vulnerable to being used to handle terrorism related transfers. Here too, much of the problem resides overseas.

• Funds transferred through Hawala like systems are very hard to trace, particularly as they are re-directed once they are received overseas.
• Terrorist organizations have become sufficiently sophisticated in handling such transactions to assure that the initial overseas recipient of the funds appears squeaky clean.
• Let me suggest, Mr. Chairman, that it is essential that we broaden the focus of our attention, when it comes to inhibiting the financing of terrorism, to include financial institutions beyond our shores.

When I say that the locus of the terrorism financing problem is largely overseas I do so with a caveat.

A number of foreign financial institutions that maintain branches and correspondent accounts in the United States have engaged in banking activities that have become of grave concern to us.

• In August 2005, the New York branch of Jordan’s Arab Bank signed a consent decree, and paid a $24 million penalty, for its involvement in transferring more than $20 million to and from more than 45 suspected terrorists or terrorist groups in the Middle East. The bank acknowledged that it had dollarized many of these transactions.
• In April 2009, Doha Bank, New York paid a civil penalty of $5,000,000 which was assessed, in part, because of its involvement in dollarizing transactions related to terrorist groups overseas.
• There have been several other cases involving US branches of foreign banks that have engaged in practices inconsistent with U.S sanctions laws and regulations. Last May a criminal information was filed against, ABN AMRO, now part of the Royal Bank of Scotland, for facilitating transactions by altering or stripping information from the transactions so that they might pass undetected through compliance filters at other U.S. financial institutions. These transactions involved more than $3.2 billion dollars moving to, from, and through AMB AMRO’s New York branch.
• And, in December 2009, Credit Suisse was assessed a $536 million penalty for processing thousands of transactions over a 20-year period that concealed the involvement of sanctioned parties and the routing of wire transfers and securities transactions to and through the United States.

These regulatory actions have sent a strong message to overseas financial institutions that the United States will not countenance such activities on the part of their branches in the United States.

But, an even stronger message is now being sent by victims of terrorism as they move in U.S. courts to hold such financial institutions accountable under section 2333 of the anti terrorism act for facilitating the flow of funds to terrorist organizations.

I cite as examples the civil damages cases now proceeding in New York against Arab Bank, Nat West, and Credit Lyonnais for their having facilitated the transfer of funds to Hamas and other terrorist groups that have launched suicide and other terrorism attacks against innocent victims in Israel.

The real problem here is that while these terrorist related transactions are illegal in the United States, they have not been deemed illegal by many of the other countries in which these banks operate. This is in spite of the fact that almost all countries are now parties to the International Convention for the Suppression of the Financing of Terrorism, which came into force in April 2002.

That convention clearly obligates all countries to criminalize the funding of groups or individuals that engage in terrorist activities.

Shortly after the 9/11 attack the Security Council also adopted resolution 1373 which obligates all countries, whether or not they have adopted the Terrorism Financing Convention, to take the steps necessary to prevent the transfer of funds to terrorist organizations or for terrorist purposes. But, the resolution failed to contain any definition or criteria as to what constitutes terrorism.

• It left it to each country, independently, to determine this crucial issue for itself.
• Without common criteria, or a definition of terrorism, each country remains free to interpret its own obligations. Each can decide which groups they consider terrorists and which they wish to hail as “freedom fighters.”
• Saudi Arabia uses this distinction, for example, to justify its continuing funding for Hamas while Iran and Syria use it to provide funds and support to Hezbollah.

The fact of the matter is that there is still only a very limited international consensus as to which organizations are terrorist organizations. And, for the most part, that consensus is limited to a very short list of entities and individuals identified and designated by a Committee of the Security Council, as being directly associated with al Qaeda and/or the Taliban.

At my own last count, in June 2010, that designation list includes 137 members of the Taliban, 257 members or associates of al Qaeda, and 103 entities directly related to al Qaeda.

I want to be clear on this point. Beyond that list of designated individuals and entities there is no international consensus, and therefore, no clear and enforceable international obligation, which inhibits countries from allowing their financial institutions to engage in financial transactions with such undesignated individuals and entities.

Only a limited number of countries have joined with us in designating such organizations as Hamas and Hezbollah as terrorist organizations. This includes, for the most part, our European friends and allies. Yet, some European countries still exempt the political and humanitarian wings of these organizations from such designation. Many other countries have not even gone that far and openly permit their financial institutions to process transactions in Hamas’ and Hezbollah’s favor.

Given US bank interaction with this larger international banking community, the vulnerabilities become stark. And, that means that very careful attention must be paid to assuring that accurate information regarding origination and the ultimate recipient of the transaction is complete and accurate.

The problem is further complicated by the emergence in numerous lesser developed countries of new under-funded and under-regulated home grown banks. These banks rely heavily on their correspondent and payable through accounts maintained in more established banking institutions.

Many of these home grown banking institutions continue to lack the wherewithal to mount and maintain an effective compliance system.

• At the same time the national regulatory environment under which they operate is unable to provide effective oversight.
• And, many of these banks are located in areas quite susceptible to the recruitment of terrorists.

So, Mr. Chairman, I would also place great emphasis on the need to strengthen the international banking communities resources and commitment to halting the financing of terrorism.

I do not want to appear too pessimistic in this regard.

• A very substantial segment of the international banking community does take terrorism financing and money laundering issues quite seriously.
• The Wolfsberg group of banks, for example, has established high standards to prevent terrorist organizations from accessing their financial services, and they have pledged to assist governments in their efforts to combat terrorist financing.

FATF

The FATF, The Financial Action Task Force, has made great strides in providing guidance and best practices for the strengthening of international banking compliance, and in brokering assistance for jurisdictions wishing to upgrade their compliance programs.

• It has also spawned numerous regional organizations to facilitate cooperation and share the burden of compliance among their member banks
• .FATF has also finally gotten back to holding certain countries accountable for their failings in this regard.
• In 2008 FATF began publishing a list of high risk and non cooperating jurisdictions whose banks have failed to adequately implement an anti-money laundering and counter terrorism financing program.
• FATF issued a series of statements expressing concerns about the AML/CFT deficiencies in Iran, Uzbekistan, Pakistan, Turkmenistan, São Tomé and Principe, and the northern part of Cyprus.
• The FATF statements called on FATF members to pay special attention to transactions dealing with Iran and Uzbekistan and to strengthen preventive measures in response to the risks associated with these countries.
• In February 2009, FATF also called on its members and other jurisdictions to apply additional counter-measures to protect their financial sectors from money laundering and terrorist financing risks emanating from Iran.

Ultimately, United States regulatory agencies can also make reference to the broad powers provided to them in Section 311 of the Patriot Act. As you know, Mr. Chairman, that section authorizes the Secretary of the Treasury to impose special enhanced due diligence requirements with regard to the maintenance and operation of correspondent and payable through accounts maintained in US banks for foreign jurisdiction banks. And, in some cases this may include precluding the operation of such accounts in favor of risky banks overseas.

We all recognize that these powers must be used sparingly and prudently. At the same time they do provide us considerable leverage when it comes to influencing and correcting bad banking conduct overseas.

The Rest @ Counterterrorism Blog

Hamas's Nizar Rayyan, Reported Dead

A senior Hamas leader has been killed by an Israeli air strike on his home in the Gaza Strip, Hamas officials say.

Nizar Rayyan, the most senior Hamas figure to be killed since 2004, had urged suicide attacks against Israel.

News of the strike came on the sixth day of Israeli strikes on Hamas targets in the Gaza Strip.

Palestinian medical sources say 402 people have been killed. Israel says it is trying to prevent militants from firing rockets into southern Israel.

Mr Rayyan is the most senior Hamas leader to be killed since the death of Abdel Aziz al-Rantissi in April 2004.

The Rest @ of Adalvoice (Swiss Somali Community)

Hezbollah, a Danger to the EU, Funder of African Terrorism

Deliv­ered June 20, 2007

Hezbollah's Terrorist Threat to the European Union
by James Phillips
Heritage Lecture #1038

Deliv­ered June 20, 2007

Hezbollah ("Party of God"), the radical Lebanon-based Shiite revolutionary movement, poses a clear terrorist threat to international security. Hezbollah ter­rorists have murdered Americans, Israelis, Lebanese, Europeans, and the citizens of many other nations.

Originally founded in 1982, this group has evolved from a local menace into a global terrorist network strongly backed by radical regimes in Iran and Syria, and funded by a web of charitable organizations, crim­inal activities, and front companies.

Hezbollah regards terrorism not only as a useful tool for advancing its revolutionary agenda but as a religious duty as part of a "global jihad." It helped to introduce and popularize the horrific tactic of suicide bombings in Lebanon in the 1980s, developed a strong guerrilla force and a political apparatus in the 1990s, and became a major destabilizing influence in the Arab–Israeli conflict in the last decade.

Prior to September 11, 2001, Hezbollah murdered more Americans than any other terrorist group. Despite al-Qaeda's increased visibility since then, Hezbollah remains a bigger, better equipped, better organized, and potentially more dangerous terrorist organization, in part because it enjoys the unstinting support of the two chief state sponsors of terrorism in the world today—Iran and Syria. Hezbollah's threat potential led former Deputy Secretary of State Richard Armitage to dub it "the A-Team of terrorism."

Hezbollah is a cancer that has metastasized, ex­panding its operations from Lebanon, first to strike regional targets in the Middle East, then far beyond. It now is truly a global terrorist threat that draws fi­nancial and logistical support from the Lebanese Shiite diaspora in the Middle East, Europe, Africa, Southeast Asia, North America, and South America.

Hezbollah fundraising and equipment procurement cells have been detected and broken up in the Unit­ed States and Canada. Europe is believed to contain many more of these cells.

Hezbollah has been implicated in numerous ter­rorist attacks against Americans, including:

• The April 18, 1983, bombing of the U.S. Embassy in Beirut Lebanon, which killed 63 people, including 17 Americans;
• The October 23, 1983, suicide truck bombing of the Marine barracks at Beirut Airport, which killed 241 Marines deployed as part of the mul­tinational peacekeeping force in Lebanon;
• The September 20, 1984, bombing of the U.S. Embassy annex in Lebanon; and
• The 1996 Khobar Towers bombing, which killed 19 American servicemen stationed in Saudi Arabia.
• Hezbollah also was involved in the kidnapping of several dozen Westerners, including 14 Americans, who were held as hostages in Lebanon in the 1980s. The American hostages eventually became pawns that Iran used as leverage in the secret negotiations that led to the Iran-Contra affair in the mid-1980s.

Hezbollah has launched numerous attacks at far-flung targets outside the Middle East. Hezbollah per­petrated the two deadliest terrorist attacks in the his­tory of South America—the March 1992 bombing of the Israeli Embassy in Buenos Aires, Argentina, which killed 29 people; and the July 1994 bombing of a Jewish community center in Buenos Aires that killed 96 people.

The trial of those implicated in the 1994 bombing revealed an extensive Hezbollah presence in Argentina and other countries in South America. Hezbollah also was involved in aborted attempts to bomb the Israeli Embassy in Bangkok, Thailand, in 1994, and in a failed plot in Singapore.

Hezbollah's Terrorist Threat in Europe

Hezbollah poses a direct threat to EU citizens at home and those traveling abroad, especially in the Middle East.

Hezbollah established a presence inside European countries in the 1980s amid the influx of Lebanese citizens seeking to escape Leba­non's brutal civil war and the recurring clashes between Israel and Palestinian terrorists based in Lebanese refugee camps. Hezbollah took root among Lebanese Shiite immigrant communities throughout Europe.

German intelligence officials estimate that roughly 900 Hezbollah members live in Germany alone. Hezbollah also has developed an extensive web of fundraising and logistical support cells spread throughout Europe.

France and Britain have been the principal Euro­pean targets of Hezbollah terrorism, in part because both countries opposed Hezbollah's agenda in Leb­anon and were perceived to be enemies of Iran, Hezbollah's chief patron.

Hezbollah has been involved in many terrorist attacks against Europe­ans, including:

• The October 1983 bombing of the French contingent of the multinational peacekeeping force in Lebanon (on the same day as the U.S. Marine barracks bombing), which killed 58 French soldiers;
• The December 1983 bombing of the French Embassy in Kuwait;
• The April 1985 bombing of a restaurant near a U.S. base in Madrid, Spain, which killed 18 Spanish citizens;
• A campaign of 13 bombings in France in 1986 that targeted shopping centers and railroad facilities, killing 13 people and wounding more than 250; and
• A March 1989 attempt to assassinate British novelist Salman Rushdie, which failed when a bomb exploded prematurely, killing a terrorist in London.

Hezbollah attacks in Europe trailed off in the 1990s after Hezbollah's Iranian sponsors accepted a truce in their bloody 1980–1988 war with Iraq and no longer needed a surrogate to punish states that Tehran perceived to be supporting Iraq. But this lull could quickly come to an end if the situation chang­es in Lebanon or Iran is embroiled in another con­flict.

Significantly, the participation of European troops in Lebanese peacekeeping operations, which became a lightning rod for Hezbollah terrorist attacks in the 1980s, could become an issue again today, as Hezbollah attempts to revive its aggressive operations in southern Lebanon.

Belgium, Den­mark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, and Sweden have contributed troops to the United Nations Interim Force in Lebanon.

Troops from EU member states may find themselves attacked by Hezbollah with weapons financed by Hezbollah's supporters in their home countries.

According to intelligence officials, Hezbollah operatives are deployed throughout Europe, includ­ing

• Belgium
• Bosnia
• Britain
• Bulgaria
• Croatia
• Cyprus
• Denmark
• France
• Germany
• Greece
• Italy
• Lithuania
• Norway
• Romania
• Russia
• Slovenia
• Spain
• Sweden
• Switzerland
• Turkey
• Ukraine.
  

Radicalizing European Muslims

Europe's vacation from Hezbollah terrorist attacks could come to a swift end if Hezbollah suc­ceeds in its attempts to convert European Muslims to its harsh ideology.

• Young Muslim militants in Ber­lin, asked in a television interview to explain their hatred of the United States and Jews, cited Hezbol­lah's al-Manar TV as one of their main sources of information.

Ideas have consequences.

• In July 2006, four months after Hezbollah leader Hassan Nasrallah, in an interview broadcast on al-Manar TV, called for Muslims to take a decisive stand against the Danish cartoons featuring the prophet Mohammed, two Lebanese students sought to bomb two trains in Germany as a reprisal for the cartoons, but the bombs failed to detonate.
  

Clearly, Europeans are exposing themselves to increased risks of terrorism as long as they allow Hezbollah's political and propaganda apparatus to spew a witch's brew of hatred, incitement, and calls for vengeance.

Hezbollah's Role as a Proxy for Iran

Hezbollah is a close ally, frequent surrogate, and terrorist subcontractor for Iran's revolutionary Islamic regime.

Iran played a crucial role in creating Hezbol­lah in 1982 as a vehicle for exporting its revolution, mobilizing Lebanese Shiites, and developing a terror­ist surrogate for attacks on Iran's enemies.

Tehran pro­vides the bulk of Hezbollah's foreign support: arms, training, logistical support, and money.

Iran provides at least $100 million (and probably closer to $200 million) of annual support for Hezbollah and has lav­ishly stocked Hezbollah's expensive and extensive arsenal of Katyusha rockets, sophisticated mines, small arms, ammunition, explosives, anti-ship mis­siles, anti-aircraft missiles, and even unmanned aerial vehicles that Hezbollah can use for aerial surveillance or remotely piloted terrorist attacks.

Iranian Revolu­tionary Guards have trained Hezbollah terrorists in Lebanon's Bekaa Valley and in Iran.

Iran has used Hezbollah as a club to hit not only Israel and its Western enemies, but also many Arab countries.

Iran's revolutionary ideology has fed its hostility to other Muslim governments, which it seeks to overthrow and replace with radical allies.

During the Iran–Iraq war, Tehran used Hezbollah to launch terrorist attacks against Iraqi targets and against Arab states that sided with Iraq. Hezbollah launched numerous terrorist attacks against Saudi Arabia and Kuwait, which extended strong financial support to Iraq's war effort, and participated in sev­eral other terrorist operations in Bahrain and the United Arab Emirates.

Iranian officials conspired with the Saudi branch of Hezbollah to conduct the 1996 Khobar Towers bombing in Saudi Arabia. Today, Hezbollah continues to cooperate with the Iranian Revolutionary Guards to destabilize Iraq, where both groups help train and equip the Mahdi Army, the radical anti-Western Shiite militia led by the militant cleric Moqtada al-Sadr.

By refusing to use its economic leverage over Iran to dissuade Tehran from continuing its troubling nuclear weapons program, the EU is making a mil­itary clash between the United States and Iran much more likely.

In that event, Hezbollah cells through­out Europe are likely to be activated to strike at American, and perhaps NATO, targets.

Even if Hezbollah elects to restrict its focus to American embassies, businesses, and tourists, many Europe­ans are likely to perish in such attacks.

Hezbollah's Ties with Other Terrorist Groups

In addition to the direct threat Hezbollah poses to Europeans, it also poses an indirect threat by vir­tue of its collaboration with other terrorist groups that have targeted Europeans. Many of these groups already have been placed on the EU terrorism list.

Hezbollah has developed a cooperative relation­ship on an ad hoc basis with the al-Qaeda terrorist network and several radical Palestinian groups.

• In June 2002, U.S. and European intelligence officials noted that Hezbollah was "increasingly teaming up with al-Qaeda on logistics and training for terrorist operations."
• Both al-Qaeda and Hezbollah established training bases in Sudan after the 1989 coup that brought the radical National Islamic Front to power.
• Iran's Revolutionary Guards, which also established a strong presence in Sudan to support the Sudanese regime, ran several training camps for Arab radical Islamic groups there and may have facilitated cooper­ative efforts between the two terrorist groups.
  

Another worrisome web of cooperation between Hezbollah, al-Qaeda, and Hamas support networks is flourishing in the tri-border region at the juncture of Argentina, Brazil, and Paraguay.

• This lawless and corrupt region has provided lucrative opportunities for Hezbollah supporters to raise funds, launder money, obtain fraudulent documents, pass counter­feit currency, and smuggle drugs, arms, and people.
• Modern terrorist networks often are composed of loosely organized transnational webs of autono­mous cells, which help them to defeat the efforts of various law enforcement, intelligence, and internal security agencies to dismantle them. This decentral­ized structure also helps to conceal the hand of state sponsors that seek to use terrorist groups for their own ends while minimizing the risk of retaliation from states targeted by the terrorists.
  

The amorphous, non-hierarchical nature of the networks, and their linkages with cooperative crim­inal networks, leads to a situation in which some nodes of the web function as part of more than one terrorist group.

This cross-pollination of terrorist networks makes it difficult to determine where one terrorist group ends and another one begins.

There­fore, giving Hezbollah a free pass to operate inside the European Union also aids other groups who are plugged into the same web of criminal gangs, family enterprises, or clan networks.

In 2002, Germany closed down a charitable fundraising organization, the al-Aqsa Fund, which reportedly was a Hamas front that also raised money for Hezbollah.

Hezbollah also has colluded with al-Qaeda affiliates in Asia.

• Abdul Nasser Nooh assisted both Hezbollah and al-Qaeda activities, and Muhammad Amed al-Khalifa, a Hezbollah member, was involved in sending a shipment of explosives to the Philippines through an al-Qaeda front company.
  
• According to U.S. intelligence officials, Hezbol­lah has cooperated with the terrorist network for­merly led by Abu Musab al-Zarqawi, who was killed in Iraq in 2006.
• This network officially became part of al-Qaeda in 2004. Despite Zarqawi's militantly anti-Shia views, the two groups have reportedly coordinated terrorist efforts against Israel on an ad hoc basis.
• Zarqawi's network, composed of Sunni extremists from Jordan, Syria, Lebanon, the Pales­tinian territories, Iraq and other countries, has a strong fundraising and support infrastructure in Europe that poses a significant threat to Europeans as well as citizens of a wide range of other countries.

In the Middle East, Hezbollah has cooperated with Hamas, Palestinian Islamic Jihad, and Fatah's Al-Aqsa Martyrs' Brigades to launch terrorist attacks against Israelis.

After the outbreak of the second Palestinian intifada in 2000, Hezbollah's notorious terrorism coordinator, Imad Mugniyah, was selected by Iran to assist Palestinian terrorist operations against Israel.

• Mugniyah reportedly played a role in facilitating the shipment of 50 tons of Iranian arms and military supplies to Pal­estinian militants on board the freighter Karine A, which was intercepted by Israeli naval forces in the Red Sea in January 2002 before its cargo could be delivered.
• Hezbollah has also provided Hamas and other Palestinian extremist groups with tech­nical expertise for suicide bombing.
  

Hezbollah's Destabilizing Influence in the Middle East

Hezbollah threatens the security and stability of the Middle East, and European interests in the Mid­dle East, on a number of fronts. In addition to its murderous campaign against Israel, Hezbollah seeks to violently impose its totalitarian agenda and subvert democracy in Lebanon. Although some experts believed that Hezbollah's participation in the 1992 Lebanese elections and subsequent inclu­sion in Lebanon's parliament and coalition govern­ments would moderate its behavior, its political inclusion brought only cosmetic changes.

After Israel's May 2000 withdrawal from south­ern Lebanon and the September 2000 outbreak of fighting between Israelis and Palestinians, Hezbol­lah stepped up its support for Palestinian extremist groups such as Hamas, Palestinian Islamic Jihad, the Al-Aqsa Martyrs' Brigades, and the Popular Front for the Liberation of Palestine.

It also expand­ed its own operations in the West Bank and Gaza and provided funding for specific attacks launched by other groups.

In July 2006, Hezbollah forces crossed the inter­nationally recognized border to kidnap Israeli sol­diers inside Israel, igniting a military clash that claimed hundreds of lives and severely damaged the economies on both sides of the border.

Hezbollah is rebuilding its depleted arsenal with financial sup­port from its European fundraising networks. This poses a threat to European soldiers in the U.N. peacekeeping force in Lebanon. To be consistent, the EU should ban such fundraising.

Hezbollah uses Europe as a staging area and recruiting ground for infiltrating terrorists into Isra­el. Hezbollah has dispatched operatives to Israel from Europe to gather intelligence and execute ter­rorist attacks. Examples of Hezbollah operatives who have traveled to Israel from Europe include Hussein Makdad, a Lebanese national who used a forged British passport to enter Israel from Switzer­land in 1996 and injured himself in a premature bomb explosion in his Jerusalem hotel room; Stefan Smirnak, a German convert to Islam who was trained by Hezbollah in Lebanon, and was arrested at Ben Gurion airport after flying to Israel in 1997; Fawzi Ayoub, a Canadian citizen of Lebanese descent, who was arrested in 2000 after traveling to Israel on a boat from Europe; and Gerard Shuman, a dual Lebanese–British citizen, who was arrested in Israel in 2001.
Additionally, long before al-Qaeda and the Tali­ban began to finance their operations using profits from drug smuggling from Afghanistan, Hezbollah was a major supplier of illicit drugs to Europe and other regions.

The organization tapped into long­standing smuggling networks operated by Shiite clans in Lebanon's Bekaa Valley, a Hezbollah strong­hold.

• Hezbollah raises money from smuggling Leb­anese opium, hashish, and heroin.
• It also traffics in illicit drugs in the tri-border region of South Amer­ica.
• Hezbollah cells also engage in other forms of criminal activity, such as credit card fraud and traf­ficking in "conflict diamonds" in Sierra Leone, Con­go, and Liberia to finance their activities.
  

The EU's Ostrich-Like Policy Regarding Hezbollah

The United States long has designated Hezbollah as a Foreign Terrorist Organization. Australia, Can­ada, and the Netherlands have followed suit. The United Kingdom has placed the "Hezbollah Exter­nal Security Organization" on its terrorist list.

-But the European Union has dragged its feet on taking serious action against Hezbollah-

In May 2002, the EU added 11 organizations and seven individuals to its financial sanctions list for ter­rorism. This was the first time that the EU froze the assets of non-European terrorist groups. But it did not sanction Hezbollah as an organization—only several individual leaders, such as Imad Mugniyah.

By taking these half-measures, the EU mistaken­ly has embraced the fallacy that terrorist operations can be separated from the other activities of a radical organization. Attempts to compartmentalize the perceived threat by accepting the fiction that a "political wing" is qualitatively different from a "mil­itary wing" are self-defeating. This is a distinction without a difference.

Hezbollah's raison d'être is to violently impose its totalitarian ideology on Muslims and forge a radical Islamic state determined to destroy Israel and drive out Western and other non-Islamic influences from the Muslim world.

No genuine "political party" would finance suicide bombings and accumulate an arsenal of over 10,000 rockets to be indiscriminate­ly launched at civilians in a neighboring country.

Agreeing to accept a false distinction between political and terrorist wings is also dangerous. It allows Hezbollah to continue raising money for vio­lent purposes. Money is fungible. Funds raised in Europe, ostensibly to finance charitable and politi­cal causes, can free up money to finance terrorist attacks or can be diverted to criminal activities.

The recent violent convulsion in Gaza and last summer's war in Lebanon underscore the great dangers inher­ent in treating radical Islamic movements as normal political parties.

Hezbollah leaders themselves see little distinction between political and terrorist activity (which they consider to be "military" or "resistance" actions).

• Mohammed Raad, one of Hezbollah's representatives in the Lebanese parliament, proclaimed in 2001, "Hezbollah is a military resistance party, and it is our task to fight the occupation of our land. There is no separation between politics and resistance."
• In 2002, Mohammed Fannish, a Hezbollah political leader and former Lebanese Minister of Energy, declared: "I can state that there is no separating between Hezbol­lah military and political aims."

The EU also excluded the fundraising network of Hamas from the terrorism list in 2002. But in August 2003, the EU reversed itself and classified all of Hamas as a terrorist organization.

It is high time to do the same with Hezbollah.

Some Europeans may hope that by passively accepting Hezbollah's fundraising activities, the EU can escape its terrorism. But this ostrich-like policy ignores the fact that fundraising cells easily can transform themselves into operational terrorist cells if called on to do so. Hezbollah cells are like stem cells that can morph into other forms and take on new duties. The Federal Bureau of Investigation has warned that Hezbollah support cells inside the United States could also undertake terrorist attacks. The same is true in Europe.

Individual EU member states, such as France and Germany, have previously taken legal action against Hezbollah. Germany has deported Hezbol­lah operatives and France banned Hezbollah's al-Manar television network in 2004. But such actions were undertaken in an ad hoc manner on a country-by-country basis, not in a systematic manner by the EU as a whole. Given that protecting citizens is the highest duty of the state, such half-hearted piece­meal policies are irresponsible.

Putting Hezbollah on the EU terrorism list would require the consent of all 27 EU member states. Such action would oblige each member to prohibit the channeling of money from European entities and individuals to Hezbollah, and to seize Hezbol­lah assets in the EU. On March 10, 2005, the EU Parliament voted overwhelmingly to adopt a resolu­tion that affirmed Hezbollah's involvement in terror­ist activities and ordered the EU Council to "take all necessary steps to curtail" Hezbollah.

But France, Spain, and Belgium have blocked action in recent years. French Foreign Minister Michel Barnier in February 2005 justified French opposition to declaring Hezbollah to be a terrorist group by saying: "Hezbollah has a parliamentary and political dimension in Lebanon. They have members of parliament who are participating in parliamentary life. As you know, political life in Lebanon is difficult and fragile."

But one major rea­son that life is so "difficult and fragile" in Lebanon is that Hezbollah, backed by Iran and Syria, seeks to intimidate democratic forces in Lebanon through the use of terrorism. Taking a stand against Hezbollah not only would undermine its ability to finance terrorism against its Lebanese opponents, but would also make life much less difficult in Leb­anon in the long run.

Classifying Hezbollah as a terrorist organization would significantly constrain its ability to operate in Europe and severely erode its ability to raise funds there and use European banks to transfer funds around the globe.

• All EU member states would be required to freeze Hezbollah assets and prohibit Hezbollah-related financial transactions.
• Hezbollah leader Hassan Nasrallah recognized the damage that this would do to his organization in a March 2005 interview aired on Hezbollah's al-Manar television network: "The sources of [our] funding will dry up and the sources of moral, political, and material support will be destroyed."

But France in particular has blocked action on tak­ing the logical next step with Hezbollah. The recent election of Nicolas Sarkozy as France's new president offers hope for a major shift in the French position. Sarkozy hopefully will replace Jacques Chirac's "See No Evil" wishful thinking with a principled stand against permitting a lethal killing machine to infect alienated European Muslims with its violent ideology, milk them of money to finance mass murder, and brainwash them to become suicide bombers against a wide array of targets.

What EU Leaders Should Do

European Union leaders must be persuaded to take concerted and systematic action against Hezbollah.

• First and foremost, they must under­stand that in the long run, this is the best way to protect their own people, the highest duty of gov­ernment. Wishful thinking about the possibility of inducing Hezbollah to stray from the fundamental tenets of its own ideology will compromise the security of EU citizens. Turning a blind eye to Hezbollah's activities will only allow it to metasta­size into a more deadly threat. Cracking down on Hezbollah activities would not only reduce the potential terrorist threat, but would reduce the threat of its ancillary activities, such as drug smug­gling, criminal enterprises, and efforts to radicalize European Muslim communities.
  
• Second, EU leaders can be criticized for the strained logic behind their current position. It makes little sense to designate individual Hezbollah leaders as terrorists, but continue to permit the organization to raise money for their deadly work. It is a mistake to exempt Hezbollah's "political wing" from responsibility for the crimes perpetrated by the "military wing" that executes its orders. Running a hospital or an orphanage does not absolve an organization for the murder of innocents. The EU must be proactive and uproot Hezbollah's support infrastructure in Europe in order to curtail the activ­ities of its terrorist thugs around the world.
  
• Third, EU leaders should be asked to join the multilateral efforts of their democratic allies to pro­tect all of their citizens from the attacks of totalitarian Islamic extremists. There is an ideological dimension to this conflict, as well as a terrorist dimension. It would be irresponsible for the EU to stay neutral in this global ideological struggle, given the presence of a growing Muslim population inside Europe that could fall prey to radical Islamic ideologies.

Banning Hezbollah also would be a step that would help stabilize the volatile Middle East and support Arab–Israeli peace efforts. Even the Pales­tinian Authority requested that the EU ban Hezbol­lah in 2005, complaining that Hezbollah was recruiting Palestinian suicide bombers to sabotage the tenuous truce with Israel.

Putting Hezbollah on the EU terrorism list also would help stabilize Lebanon. U.N. Security Council Resolution 1559, jointly sponsored by France and the United States, calls for the disarming of all militias in Lebanon. Yet EU toleration of Hezbollah fundraising operations inside its own borders enables efforts to finance the purchase of arms and ammunition for the biggest and most dangerous militia in Lebanon. Add­ing Hezbollah to the EU terrorism list would be an important step toward disarming its militia and restoring the rule of law in Lebanon.

Banning Hezbollah also would contribute to the containment of Iran's rising power. Tehran has used its Lebanese surrogate to advance its own radical foreign policy agenda in the past and is sure to do so again.

The U.S. Congress has played a role in appealing for greater cooperation from the EU in curtailing Hezbollah's activities. The House of Representa­tives, in March 2005, passed H. Res. 101, which urged the EU to add Hezbollah to its terrorist list. The Senate followed suit the next month. Congress should continue to press the EU to do the right thing regarding Hezbollah by passing further reso­lutions and holding hearings such as this one to educate EU leaders and their constituencies about the potential challenges posed by Hezbollah.

The EU can no longer afford to ignore Hezbollah's festering threat or hope to deflect its attacks onto other countries. The longer the EU balks at effective action, the stronger the potential threat grows, fund­ed by the free flow of donations, diverted charitable funds, and criminal booty out of the EU and the pay­ments for drugs smuggled into the EU.

As Winston Churchill observed, "An appeaser is one who feeds a crocodile, hoping it will eat him last." The Hezbollah crocodile has eaten half of Leb­anon and has laid dangerous eggs around the world. The EU must take proactive action, not wait for these eggs to hatch.

James Phillips is Research Fellow for Middle East­ern Affairs in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation. These remarks were deliv­ered June 20, 2007, as testimony before the U.S. House Committee on Foreign Affairs, Subcommittee on Europe.

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