02:20 GMT +321 June 2018
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    US-Qatar Anti-Terror Funding Pact Too Narrow to Disrupt Complex Global Networks

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    The US-Qatari agreement to counter terrorist financing is too narrowly focused to be effective and is more of a diplomacy stunt with Doha needing help amid its crisis while the United States wants to maintain its strategic military base in Qatar, experts told Sputnik.

    WASHINGTON (Sputnik) — Secretary of State Rex Tillerson earlier this week signed a deal with Qatari officials to cooperate in blocking the funding of Islamist terror groups, just as Doha is being alienated by Gulf Arab states and Egypt.

    In June, Saudi Arabia, Egypt, Bahrain and the United Arab Emirates broke off diplomatic relations and communication with Qatar, accusing it of supporting terrorism and interfering in their internal affairs. Kuwait acting as a mediator in the crisis, handed over to Doha the ultimatum of the four Arab states with 13 demands, which Qatar refused to comply with.


    The global financial system is so complex that just shutting down one or two major financial centers for the Islamic State terrorist group (banned in Russia) and similar bodies to launder their money would have little impact in the medium to long term, former Brown University Assistant Professor of Economics Barry Friedman told Sputnik.

    "It is kind of a cat and mouse game: Terror group A needs to find a way to get funds to B to pay for supplies and shipping. So some respectable person C sets up a bank account in a host country that may not even know that C, a respected business man, is making phony purchases from B," he said.

    On the books, such an arrangement would look like a reasonable shipment of mining supplies or other goods, Friedman explained.

    The sums involved were so huge and the profit margins from such transactions so enormous that they would continue to flourish, Friedman predicted.

    "There are just a lot of ‘respectable’ people in every country engaged in the ‘import/export’ trading," he added.

    The Department of the Treasury seeks to uncover such transactions and then issue sanctions to try and suppress the illicit trade, Friedman acknowledged.

    "They try to intervene by finding out who is directly supplying the terror group and then which banks and depositors are transacting with [the suppliers]. Then, they take action against the bank to get them to freeze [the suppliers’] account and try to disrupt the deeper source of money," he said.

    Qatar and other countries that had proved reluctant to open the records of their banks to US treasury perusal limited the effectiveness of such efforts, Friedman noted.

    "It seems there is a loophole. What if C is himself a wealthy Emir or Tycoon who is putting his own family or business funds into support for the terror group. It would not be so easy to convince a country or bank to restrain the banking privileges of some of its most prominent citizens," he said.

    The government of Qatar could take action to reduce US diplomatic and other pressure by allowing Treasury officials to examine at least a handful of suspected accounts suspected of playing major roles in financing arms supplies and proceeds of terrorist activities, Friedman suggested.

    "I imagine that there could be a modest show of goodwill by Qatari leadership in restricting banks from handing a few specific transactions between citizens or local corporations C and suppliers B," he said.

    Such massive funding flows to support Islamist terror were not limited to the Persian Gulf region, Friedman observed.

    "The people with the money could try to use the banks of perhaps Lebanon or somewhere where bribes can be paid. It helps [the terror groups] that there has been a lot of consolidation in banking and the bigger the bank the less any one transaction will stand out," he added.

    Nevertheless, major banks based in small countries like Qatar remained vulnerable to international pressure to freeze accounts or restrict certain transactions, Friedman acknowledged.


    On Tuesday, UAE Minister of Foreign Affairs and International Cooperation Sheikh Abdullah bin Zayed Al Nahyan welcomed the United States and Qatar signing of the counterterrorism memorandum between the United States and Qatar.

    The Saudis and their Gulf Arab allies are claiming that they can effectively cripple major Islamist terror groups by ending their funding from Qatari sources and preventing them from continuing to channel and money-launder hundreds of millions of dollars through Doha.

    Veteran retired Department of Defense analyst Chuck Spinney told Sputnik that he expected the deadlock between Riyadh, the Gulf States, and Doha to continue for the foreseeable future despite these positive overtures from players like UAE.

    "If past is prologue, my guess is that very little will happen," he predicted.

    However, Tillerson appeared to be seeking an end to the dispute as the United States operates a major air base in Qatar outside Doha that it uses to confront Iran and reassure the Saudis, Spinney observed.

    "It may be part of an effort by Tillerson to reduce the Saudi heat on Qatar and keep our base open," he said.

    The Saudis and their allies then presented a 13-point ultimatum to Qatar insisting Doha end its diplomatic relations with Iran and that Turkey evacuate its military base in the emirate. The Saudis also called on Qatar to shut down its Al Jazeera television news channel.

    Qatari Foreign Minister Mohammed bin Abdulrahman bin Jassim Thani rejected the ultimatum and claimed the accusations in it were all false.


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