By Bhaskar Roy
In a startling
development, one hundred plaintiffs filed a
case last week with a Los Angeles Circuit
Court that a Chinese state-owned bank was
acting as a financial conduit for terrorist
groups Islamic Jihad (IJ) and Hamas. The
Bank of China Ltd. China’s third largest
bank, has expectedly denied the charge
saying it would contest the suit.
The law suit alleged
that the bank was aware of these illegal
transactions but did nothing to stop them.
It claimed, through certain supportive
documents, that millions of dollars were
sent through the Bank of China to finance
attacks by the two terrorist outfits,
resulting in death and injuries to innocent
people.
The charges add that
the illegal transfers emanated from the
Middle East, sent to the banks’ branches in
the USA, and were then transferred to
accounts at the Bank of China branch in
Guangzhou in Southern China, and finally
wire-transferred to Hamas and IJ leaders in
Israel, the West Bank and the Gaza Strip.
This money helped terrorist attacks between
2004 and 2007.
Israeli officials in
2005, brought these activities of the bank
to the notice of officials of China’s
Central Bank but the practice continued, the
law suit said.
Following the war on
terror led by the USA from 2001, US
intelligence and federal justice department
officials started working with a large
number of countries including China to block
the routes of terror financing. For example,
US Justice Department officials have trained
Bangladesh central bank officials on
tracking illegal money transactions. This
happened following the 2005 country-wide
terrorist bombings in Bangladesh and it was
discovered that a number of Gulf NGOs like
the Al Hamrain trust and the Revival of
Islamic Heritage Society (RIHS) of Kuwait
were funding Islamic terrorist groups in the
country.
According to the Bank
of China’s website, it reported by 2006 more
than one thousand cases of suspicious
transactions amounting to $ 56.5 billion to
the Chinese police, but there is no official
report on how these cases were dealt with.
Illegal monetary
transactions are also hidden in Foreign
Direct Investment (FDI) in China. Money sent
out illegally by some companies about which
not much is known, return as FDI.
Information on such financial flows is
rarely sought by the government agencies.
One partner involved in illegality will
surely need an unscrupulous partner outside
China. Money laundering is a murky world
where all the undesirable people – gun
runners, narco traders, terrorists and black
marketers are partners – with no questions
asked.
It is well known that
China assisted the Taliban during the war
against Soviet occupation of Afghanistan.
But it was not China alone who supported the
Taliban – the USA was the main culprit along
with king pin Pakistan. While the western
countries withdrew from Afghanistan after
the Soviet Union left to gradually implode,
China, with assistance from Pakistan, stayed
with the new rulers of Afghanistan, the
Al-Qaeda indoctrinated Taliban.
China’s commitment to
counter terrorism has always been suspect,
although it has its own problems with the
Muslim Uighur separatists in the western
region of Xinjiang. This problem is not
receding.
At a particular period
of the cold war, China maximized its gains
from most sides. The experience may have
encouraged the Beijing leaders to sit in the
middle and fish in troubled waters.
China was very much
aware that its Uighur militants were being
trained in Pakistan and Afghanistan by
Pakistani Jehadis of ISI creation, the
Taliban and even the Al Qaeda. Some of these
training camps were common to both Uighurs
and Kashmiri militants.It hoped that with
good relations with Pakistan and the Taliban
in Afghanistan, the Uighur separatist menace
would be resolved or, at least, kept within
manageable limits.
It may be recalled that
even after the US missile attacks on Taliban
post 9/11, China maintained for some time
that there was no evidence that the Taliban
was involved in terrorism. Chinese companies
were entering Taliban controlled Afghanistan
in a big way in telecommunication, military
informatics, and oil and gas survey.
Further, Afghanistan was seen as a strategic
gateway to Central Asia.
Pakistan was, and
remains, China’s gateway to the Gulf and
West Asia or as the Chinese prefer to call
it these days, the “Golden Gate” out of US
encirclement. The route from western China
to Pakistan extending to Afghanistan into
Central Asia was also very important to
consolidate its multi-pronged surge in that
ex-Soviet region.
Simultaneously, growing
militancy in countries perceived to be
potential competitors or adversaries was
apparently seen as a bonus by the Chinese
security establishment. China’s larger
regional strategy seemed to have given some
cover to Islamic terrorism and militancy, at
least by omission. This strategy has also
enabled terrorists to sneak into southern
China from Hong Kong and near by areas in
the cover of petty businessmen. Terrorist
money laundering from Guangdong province
bordering Hong Kong was reported as early as
2002.
The Bank of China case
raises the question whether there is
disconnect between the hard line
intelligence and security establishment and
the top section of the Central leadership
group led by President Hu Jintao? If that is
so, this is a dangerous call for the rest of
the world, especially neighbouring regions
troubled by Islamic militancy and terrorism.
The West, of course, would be a major
target.
Otherwise, it is
difficult to find an answer how such huge
illegal transfers through the Bank of China
in Guangzhou has remained unaddressed for so
long when evidence was staring the Chinese
security in the face. The related question
is whether the Bank of China case is the tip
of the iceberg, given the fact that
terrorists in UK, Europe and India appear
financially well-supported.
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