Natural Resources and Violent Conflict - WaterWiki.net

follow the money 205the wholesale opium, with the tax collected by village mullahs for theleadership in Kabul. During the period of Taliban rule, the military andsecurity forces of the Taliban and Al-Qaeda were intermingled. Becauseof the use of alternative remittance systems and an absence of oversightof financial transactions in Southwest Asia, it is not possible to traceopium profits from Afghanistan to particular Al-Qaeda operations.In Colombia, the enormous profits created from the drug tradehave enabled FARC to establish a vast and sophisticated military andfinancial network. This network was responsible for the sustainedgrowth and success of FARC throughout the 1990s. The drug trade,combined with other sources of funds (kidnappings, road tolls, androbberies), has enabled the continued purchasing of large amounts ofweapons, including sophisticated surface-to-air missiles as well asheavy weaponry and military vehicles (Kinsell 2000). With more thanhalf of FARC’s funds coming from the drug trade, some $250 millionto $300 million annually, drug cartels have become FARC’s partnersin maintaining its capacity to operate against the government. FARCcommonly purchases arms and equipment with large amounts of cocaine(Kinsell 2000). It is believed that FARC has an annual income of$500 million to $600 million (Klepak 2000).While drug traffickers may receive the proceeds of drug sales at variousstages of the chain of distribution, from opium or coca farmers allthe way through small urban dealers, terrorist groups that controlnational territory receive funds almost entirely at the first stages ofproduction—that is, at the location of extraction. These terroristgroups typically receive their share of narcotics funds in cash and thenseek to avoid cross-border currency controls by placing the funds inlocal financial institutions that are willing to accept drug proceeds.Alternative remittance systems, such as hawala and black marketpesos, become central to the placement function, permitting terroristgroups to move funds to where they need them. Other techniques forhiding drug funds often rely on barter, or substitute commodities, forcash, such as gold or precious gems. It is sometimes said that terroristfinance differs from money laundering in that terrorists take cleanmoney and hide it to fund criminal activities, while money laundererstake dirty money and hide it to fund lawful activities. In the area ofterrorism funded by narcotics, however, the terrorists use precisely thesame infrastructure for handling their funds as do drug traffickers.Systems that are open to drug money laundering prove to be equallyas open to terrorist money laundering, except that the identity of thecollusive parties may be colored by ideological overlays not presentin the context of commercial drugs. The differences between moneylaundering by terrorist organizations in Latin America, Southeastern