Monday, May 4, 2009

Gemstones and the Terrorist Financial Infrastructure

Via CT Blog -

My CTB colleague Animesh Roul has just published an interesting piece on the Taliban's use of gemstones in its financial structure. This has been, as my other CTB colleague Dennis Lormel and I can both attest, from different points of view, a long time subject of debate in the IC and law enforcement communities.

What is striking about the piece is not just the Taliban's use of emeralds, but the use of gemstones going back many years, to the time of the initial jihad against the Soviets. Not only does the Taliban know how to mine, albeit at a rudimentary level, but it knows how to sell the stones on the market.

This is one of the reasons (and there are many, as Dennis and I have debated) I found the information on the use of diamonds credible was precisely that-the Taliban and radical Islamist groups had a long familiarity with the trade, and how to engage in it successfully. It was not something they were dabbling in with no prior experience or expertise.

One thing of significant importance (and which had not developed at the time of my reporting on diamonds and al Qaeda) is the emergence of both Dubai and Ras al Khaimah (two of the seven emirates of the United Arab Emirates, one of only three governments to recognize the Taliban when it was in power the first time) as leading diamond markets and gemstone centers.

This means that Taliban and its friends and allies have a nearby, friendly market for their products, and a way to move them virtually undetected into the world market.

This is no small thing. Prior to this (circa 9/11) the diamonds had to be moved from West Africa to Brussels and, later, Lebanon, in order to be sold. That left more of a traceable trail, and involved intermediaries that were not entirely reliable. Those vulnerabilities are now lessened.

This, to me, one of the greatest dangers of the new world. Self-financing, non-state armed groups that control "honeypots" of resources that make them largely invulnerable to outside influences and pressures.

When a radicalized group becomes financially autonomous it is at is most dangerous. My full blog is here.

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