Natural Resources and Violent Conflict - WaterWiki.net

206 winer and rouleEurope, and Southwest Asia are more the result of minor regional differencesin mechanisms than of operational distinctions. With that inmind, the following financial mechanisms have been used to launderdrug funds:• Exploitation of poor governance to provide safe havens for thosegenerating drug wealth in source countries and making payoffs to underpaidofficials in such regions. This feature accompanies the useof narcotics funds by terrorists in Latin America (Colombia, Peru),the Middle East (historically, Lebanon), Southeast Asia (Cambodia,Myanmar, the Philippines), and Southwest Asia (Afghanistan,Pakistan).• Reliance on ideologically sympathetic corrupt officials to facilitatethe placement of drug funds for terrorist groups. This phenomenonhas been especially important in Pakistan for both Al-Qaeda andvarious Kashmiri militant groups but may have played a role in theAndes (Colombia, Peru), Lebanon (Hezballah), and Southeast Asia(Cambodia, Myanmar).• The use of long-established money laundering centers, such asDubai, Indonesia, and Panama, for placement of funds, before movingthem to jurisdictions that previously paid little attention to terrorism,such as Kenya, Malta, and Singapore.• Reliance on nontraditional methods of transferring currency,including hawalas and cash couriers, and then infiltrating these fundsinto the formal financial system.• Physical transportation through complacent or collusive banksor other financial institutions, typically located in developing countriesadjacent to countries producing the drugs. For example, FARC is believedto have a series of such banks operating in Ecuador to facilitatethe transfer of funds outside of Colombia. From there, FARC canmanage its finances electronically, using computers and accessing itsaccounts online from the jungle. Arms shipments have frequently beenarranged using this method, minimizing risk (Klepak 2000).• Camouflage of terrorist finance through import-export businesses,such as buying and selling honey, fish, or grain.• Collusion with otherwise legitimate businesses that work withcollusive financial institutions to invest terrorist funds in legitimatereal estate and business ventures (Klepak 2000).• Investment of the proceeds of narcotics trafficking in real estate.Real estate investment is a traditional refuge for the proceeds ofdrug trafficking, and traffickers have controlled substantial elementsof the urban construction of luxury hotels and resorts in neighboringcountries.