Canada and the fake refugee passport issue

By Christine Duhaime | January 27th, 2016

Fake refugees — A crisis within a crisis

It is becoming clear that it is not reasonably possible to rely on the identity documents of any persons who claim Syrian or Iraqi refugee status from 2014 onwards, the time in which the Islamic State acquired the capacity to create authentic passports.

Since at least April 2015, the Islamic State has said that they will send their members back to the West with fake or no identity, pretending to be refugees so that they are admitted into the EU or Canada or the US. It’s no surprise, therefore, that this is happening. For law enforcement, immigration officials and intelligence agencies to not be able to ascertain the real identity of certain persons from Iraq and Syria is a growing problem of international security.

Al Baghdadi’s wife and daughter moving to Turkey

The first known instance of a person with ties to the Islamic State who was a fake Syrian refugee, is al Baghdadi’s ex-wife, Saja al Dulaimi, who although an Iraqi foreign national, had a fake Syrian passport that she used to transit from Syria to Lebanon, allegedly to move money for the Islamic State with her children. In 2014, she lived in a Syrian refugee settlement in Lebanon, among Syrian refugees and humanitarian aid workers. In this story of her court martial in 2015 in Lebanon, she admits that she lied about being a Syrian refugee and used fake documents.

Her story is quite surreal from a security perspective. She was arrested by the Lebanese in December 2014, and although she is alleged to be one of the more infamous and well-connected terrorist financiers, and the former spouse of al Baghdadi, was released in a prisoner swap exactly one year after being arrested in a Qatari-brokered deal. At the time of her release, she said that part of her release deal gave her permission to move to Turkey with al Baghdadi’s child and that she would be living in Istanbul.

Her brother is a member of al Nusra. Allegedly, $48 million was paid as part of her prisoner swap. An unanswered question is how it will be possible for the unemployed former wife of al Baghdadi, who is connected so closely to the heart of those two groups, to move to Turkey and have bank accounts in the context of anti-money laundering law, counter-terrorist financing law and basic counter-terrorism policy.

There are other instances of course, of fake passports being used by  people to enter other countries.

Some of the perpetrators of the Paris attacks used fake – real passports issued by ISIS to enter the EU. As Frontex head, Fabrice Leggeri, noted in this article, it is not possible for intelligence officials to detect whether a person is a fake refugee or a member of ISIS when they carry passports from areas controlled by ISIS.

Importantly, he also notes that in Syria, which has no effective government infrastructure remaining, it is not possible to confirm the identity of anyone. Even if that was possible, the ID system in Syria is localized so who will they call – ISIS?

Some agencies refer to the Iris scanning conducted by UNHCR as a way of reassuring and confirming identity. As is evident in this video, the Iris scanning that is alleged to be capable of confirming ID of a refugee is merely a an internal UNHCR scanning system to ensure that the person who appears for an interview is the person who registered with UNHCR – it does not confirm the actual identity of the person against government databases and it is inappropriate to suggest that comfort can be obtained by the Iris scanning system in the context of international security. The proper answer is what Frontex noted above, that there is no available system.

Canada has promised to air lift 25,000 Syrian refugees in an expedited process that actually does call into question the extent to which Canada can confirm the identities of the refugees it is bringing to Canada. Canada does not have greater intelligence resources than Frontex and moreover, unfortunately, Canada has invested quite little in tech for counter-terrorism efforts.

The government of Canada has said that it will locate refugees mostly from Lebanon and Turkey for removal to Canada and UNHCR has said that the refugees will be processed only once they are in Canada, meaning that who they are will be determined after they arrive.

The government of Canada said here, though, that it will be “confirming” the ID of refugees beforehand. It seems unclear which process it is following.

In the context of international security, it would be preferable to adopt a balanced approach to the issue of refugee intake to ensure that Canada accepts that number of refugees that it is capable of caring for whose identities it can confirm using, inter alia, SIM downloads and other more modern tech before they arrive in Canada. That would require Canada to create tech solutions for counter-terrorism, a desirable move for Canada. It would reassure other countries that Canada gives the requisite importance to counter-terrorism and invests an amount equal in such tech as the amount it is spending on the refugee intake process to ensure the safety of Canada (and its neighbors to the South).

The US will undoubtedly apply pressure to Canada to slow down the immigration process in respect of Syrian refugees because the risk to them is far greater than it is to Canada because ISIS is more motivated to harm the US  than Canada. If Canada does not protect its borders, the US will do it for us by clamping down on the admission of Canadians to the US, a move that would significantly harm trade and commerce between the two countries.

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FinTech and Terrorist Financing – a major RegTech issue

By Christine Duhaime | January 27th, 2016

The news last month that the couple responsible for the San Bernadino shooting had received a P2P loan for $28,000 from an online lender, Prosper Marketplace, was cause for concern among financial crime regulators. There are some regulators who have believed that a topology of terrorist financing when it comes to ISIS sympathizers, is the liquidating of assets but we know that is not accurate. Would be terrorists actually do the opposite – they borrow funds to complete acts of terrorism but they will only borrow from institutions or FinTechs that are owned by persons they view as unsympathetic to the cause.

Other forms of FinTech have been used for terrorist financing – a crowdfunding platform called GoFundMe was used by a Canadian man to raise funds purportedly to free captives held by ISIS in Iraq. GoFundMe shut down the campaign but only after $502,000 was paid by people around the world who may not have realized that the law prohibits fundraising for terrorist groups, regardless of the reason.

Australian and French police have noted the increased use of store-value cards, lines of credit, small loans and credit card use as prevalent for foreign fighters to fund terrorism. In Australia, the cases of terrorist financing increases 300% in 2015, most of it from FinTech.

There is a growing problem of the lack of financial regulatory understanding on the part of FinTechs, which leads to failure of financial crime compliance which in turn places our financial system at risk. Other RegTech issues include privacy law compliance and consumer protection.

You can learn more about RegTech and FinTech at FinTech 2016 on April 14, 2016 in Vancouver.

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New US law brands journalists and humanitarian aid workers as terrorist risk

By Christine Duhaime | January 9th, 2016

In this story in Quartz, we explore how a new US law, HR158, the Visa Waiver Program Improvement Amendment Act 2015, will result in journalists and humanitarian aid works, and many others being branded a terrorist risk for visiting Iraq, Syria, Iran and the Sudan, and how the new law will affect the ability of Iran to engage in trade with members of the EU.

“A new US law brands journalists and humanitarian aid workers as terrorist risk” –> Quartz article.

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France’s top lawyer says there’s no reason to be optimistic on terrorism front

By Christine Duhaime | January 8th, 2016

Francois Molins, France’s top prosecutor, says that the risk of terrorism is becoming larger, more multi-faceted and complex. In this interview (en francais), Maitre Molins talks about the threat of terrorism in France and some of the investigation and prosecution challenges in respect of counter-terrorism.

No reason for optimism in terrorism

Mr. Molins said that there is no reason to be optimistic about the end of terrorism because the threat from ISIS is enlarging and multi-faceted and while it may be hard for people to hear that, the better policy is to be honest about the threat and to inform the public that this is a new phenomena that will last many years.

Risks to high profile politicians, lawyers, law enforcement

In the interview, Mr. Molins notes the risks from attacks by ISIS to high profile politicians, law enforcement, lawyers and judges and that is one area in which France is now taking into consideration in its counter-terrorism efforts.

Fake identity documents

In part of the interview, Mr. Molins discussed yesterday’s incident in Paris where a man wielding a knife and wearing a fake vest of explosives was killed by police. He said that the person remains unidentified but that he was in the country illegally with fake identity documents. The police recovered his smartphone and are attempted to crack it open for identity and affiliation purposes. Although the man claimed to be from Tunisia and later from Morocco, his smartphone had a chip from Germany.

He also talks about the prosecution of persons who are creating and trafficking fake identity documents for terrorists.

November 13 attacks involved fake refugees from Syria

With respect to the November 13, 2015 attacks in Paris, he says that they were planned, organized and coordinated from ISIS in Syria and involved ISIS teams in France and Belgium with the participation of persons who entered France from Greece through the Island of Leros, clarifying  that at least two people behind the November 13 attacks in Paris were fake refugees sent by ISIS (it has promised to send its people to the West guised as fake refugees to commit acts of terrorism).

Every terrorist has an encrypted smartphone

He notes that every ISIS terrorist has a smartphone which is vital to carrying out their activities that are locked and encrypted. Law enforcement is having difficulty unlocking terrorists’ encrypted smartphones when they cannot get the passwords to the phones. France is working with investigators  in New York, Spain and London on ways to decrypt smartphones for access to terrorists’ communications but the issue is the valuable loss of time that takes – time that could prevent further terrorist attacks. There are 8 smartphones belonging to terrorists that France still cannot unencrypt, leaving them “blind.”

 Counter-terrorism jurists

The interview is newsworthy, not just for the counter-terrorism content but also because it’s an important example of why France leads in counter-terrorism on many fronts globally, namely that unlike other countries, it has counter-terrorism specialists, including jurists and counter-terrorism judges, who work as a team with law enforcement in counter-terrorism efforts. The advantages, he explains, of having specialized terrorism judges in France for rapid, competent judicial responses, is explained here.

He also explains, in the interview, why it is necessary and desirable for the public prosecutor to speak to the media regularly to give information and balance and to ensure there remains confidence among the public with the counter-terrorism judicial and enforcement process.

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US approves law limiting access to the US for people who visited or are from Iran, Iraq, Syria & Sudan

By Christine Duhaime | December 9th, 2015

Original December 9, 2015; updated December 19, 2015

A “Terrorist Risk”

Following the terrorist attack in San Bernadino on December 2, 2015, an 11-month-old relatively dormant bill to amend an American law to impose visa restrictions on select foreign nationals entering the US gained traction when it was rapidly enacted in the US.

US Bill H.R. 158, the Visa Waiver Program Improvement Act 2015 (“HR 158“) amends the US Visa Waiver Program to:

  • Effectively deem 4 countries as a “terrorist risk”;
    • Iran
    • Iraq
    • Syria
    • Sudan
  • Effectively deem persons from the 38 countries that participate in the Visa Waiver Program, a “terrorist risk” who have been in Iran, Iraq, Syria or Sudan at any time since 2011;
  • Effectively deem anyone who is a national of Iran, Iraq, Syria or Sudan as a “terrorist risk” for the purposes of the Visa Waiver Program;
  • Deny entry to Iranian nationals, and the nationals of Iraq, Syria and Sudan who are also citizens of the 38 Visa Waiver Program countries to the US under the Visa Waiver Program;
  • Deny entry to foreign nationals from 38 countries that participate in the Visa Waiver Program to the US if they have been in Iran, Iraq, Syria or Sudan;
  • Require that the 38 countries that are part of the Visa Waiver Program improve the timeliness and quality of the information required to be provided to the US pursuant to the Passenger Information Exchange Agreement; and
  • Allow the Secretary of Homeland Security to suspend a country from the Visa Waiver Program if that country fails to provide information to the US consistently or fully.

Background on Visa Waiver Program

The Visa Waiver Program was established in 1986 to allow people in 38 countries, such as France, the UK, Germany, Italy, Australia and Belgium, to visit the US visa-free for 90 days in a reciprocating arrangement.

The US Visa Waiver Program is 8 US Code §1187, and it is that Code that HR 158 is amending.

Under the Visa Waiver Program, rather than apply for a visa, foreign nationals from 38 countries apply online for a travel authorization to enter the US. Under HR 158, that process will remain the same except that applicants will be required to report whether they have been to Iran, Iraq, Syria or Sudan or are nationals of Iran, Iraq, Syria or Sudan.

Once a person reports having been to Iran, Iraq, Syria or Sudan, their travel authorization request will be denied because they are deemed to be a “terrorist risk” for the purposes of the Program. Such persons will now have to apply for a visa to visit the US, instead of a travel authorization. That process is much longer and requires a review of the person from a terrorism risk perspective.

With respect to Iranian nationals, and nationals of Iraq, Syria and Sudan, the same applies — pursuant to HR 158, they are a “terrorist risk” for the purposes of the Visa Waiver Program, and will be denied entry to the US under that Program.

Background on Terrorism Threat from ISIS in Context of HR 158

US politicians who proposed, endorsed and voted for HR 158 have said that the only intent of HR 158 is to prevent individuals who are terrorist sympathizers from the EU who defected from their own countries to join the Islamic State (“ISIS”) and subsequently returned, from entering the US under the Visa Waiver Program. The US estimates there are 5,000 such persons from the EU. In reality, there are a lot more, probably  closer to 40,000. The vast majority, if not all, went through Turkey to join ISIS in Syria or Iraq.

The inclusion of Iran in HR 158 is markedly notable because no defectors from any foreign country in the EU or elsewhere who joined ISIS went through or were radicalized in Iran. There is no such thing as ISIS in Iran, and Iran has zero tolerance for ISIS. Iran is mostly a Shi’a country; ISIS is a Sunni group that is, as part of its raison d’être, anti-Shi’a. Pursuant to the stated intent of the law, HR 158 should have exempted Iran purely on the basis of a counter-terrorism perspective. The inclusion of Iran was a last-minute decision made days before the Bill was voted on by the US Congress in early December.

The concern of American legislators is that ISIS has said that they are sending trained defectors back home to Western countries to pretend they became disenchanted with ISIS in order to regain entry to their countries of origin. ISIS believes that Western countries will welcome their defectors back (who are ISIS terrorists but who are trained by ISIS to look and sound like they are not) without prosecuting them for any or all of gang activity, war crimes, crimes against humanity, membership in a terrorist organization, terrorist financing, money laundering, providing material support for a terrorist organization or promoting terrorism. Rather, ISIS believes that Western countries will give defectors a “get-out-of-jail-free” card, treat them as victims, de-radicalize them and set them free, at which point their true identities will emerge so that they can complete their mission to harm us and our democratic way of life.

ISIS has said officially that Mexico is the route by which they will send their people to the US. This is information we all know in counter-terrorist financing law but we also know that if ISIS claims that Mexico is the preferred route, it also means they are looking at the opposite route – unfortunately that suggests Canada. Neither Mexico nor Canada invest in adequate counter-terrorism efforts, including counter-terrorist financing efforts compared with most other countries. Canada, in particular, has said that as its rushes in 25,000 Syrian refugees, it is relying on the UNHCR Iris scanning system for its ID verification (see here) of refugees, but that system is just a UN internal ID system which confirms that Refugee X who registers with UNHCR is Refugee X when they receive humanitarian aid, and for other purposes. It is not a system that verifies identity of a migrant or refugee with their national government. That would be impossible in Syria and UNHCR does not have the resources to confirm identities of refugees. This is not an ID verification system that is up to the standard of any bank for on-boarding a client, let alone a country for the intake of foreign nationals.

The US is understandably concerned about the prospect of ISIS entering their territory, particularly since we have known for about a year that ISIS has the ability to make real, but fake, passports from Syria and Iraq. These are passports that are machine readable, purportedly issued by the governments of Syria and Iraq with real government paper and tools, but that are issued by ISIS for their people, especially family members, high-ranking officials and sympathizers. The latter is to infiltrate the West, as described above. In 2015, the EU said that they detected 340,000 migrants and refugees in their space with fake ID – many more they did not detect.

Law enforcement will not be able to detect who is a member of ISIS versus a non-member, and which passports are legitimate versus illegitimate when dealing with ISIS generated passports involving nationals from Syria or Iraq from 2013 onwards, and thus that is the difficulty with Syria and Iraq.

There is no parallel concern in respect of Iran.

Significant Issues with HR 158

Entering a country as a visitor is a privilege, not a right and as a matter of law, the US may deny entry to whomever it wishes. That’s not to say, however, that HR 158 is not without legal and other concerns, especially in respect of Iran because its inclusion is inconsistent with the stated purpose of the law.

No Exceptions for Journalists, Lawyers, Doctors or Humanitarian Aid Workers 

HR 158 exempts the visa requirement for foreign nationals who visited Iran, Iraq, Syria or Sudan if they were there for military purposes or for government purposes but not for any other purpose. That is a significant problem.

Routinely, many lawyers go to Syria and Iraq as part of human rights observation missions and lawyers go to Iran to work in the normal course – this activity does not make them a terrorist risk that requires that they be added to a database as part of a watch list for the purposes of reporting under HR 158.

Journalists from the EU routinely travel to Syria and Iraq to cover the conflicts in those countries, and other journalists travel to Iran to cover its emergence following the nuclear deal and those visits will render those journalists from the EU a terrorist risk for the purposes of the Visa Waiver Program. HR 158 will interfere with the ability of members of the press in the EU to do their jobs because if they travel to Syria, Iraq or Iran for the news, they will not be able to enter the US at all, or without applying for a visa and in addition to which they will be entered in a database as a “terrorist risk” (see below) for being in Iran, Iraq, Syria or Sudan.

Doctors and humanitarian aid organizations also routinely travel to Syria and Iraq to deliver humanitarian aid or humanitarian solutions, none of whom will be exempt and all of whom will now be deemed a terrorist risk for the purposes of the Visa Waiver Program. NGOs, including American humanitarian NGOs, are usually international with workers and volunteers from many countries, including many from the 38 Visa Waiver Program countries. These are people who put their lives at risk to save other people who are victims of the very terrorists that the US is aiming to keep out of the country. Assisting victims of terrorism will make foreign nationals who do humanitarian aid work in Syria, Iraq or Sudan a terrorist risk merely because they delivered aid in Syria and Iraq – the two jurisdictions where humanitarian aid is most needed.

Equally important, the United Nations, especially UNICEF And UNHCR, have hundreds of employees in Syria, Iraq and the Sudan engaging in humanitarian aid work – because no UN agency is a “government”, none of its workers or employees will be exempt from being included in a database of persons who were in Syria, Iraq or Sudan and all are now a “terrorist risk” for the purposes of HR 158 if they visited Syria, Iraq or the Sudan for their work.

Entities and persons who provide humanitarian aid to refugees, displaced persons and others who are victims of ISIS in Syria or Iraq are not likely to be defectors of ISIS who would pose a terrorist risk. But labeling them as such may materially adversely impact the willingness of foreign nationals from the Visa Waiver Program countries from engaging in humanitarian aid work going forward.

Surprisingly, not one NGO or UN agency that engages in refugee relief work has objected, formally or otherwise, to HR 158 or sought an exemption of behalf of humanitarian relief agency work before its passage or subsequently.

Legal Concerns

For the reporting system to work in the way desired by HR 158, the 38 Visa Waiver Program countries will have to collect and retain the traveling activities of their citizens, and red flag those of its citizens who have been to Iran, Iraq, Syria and Sudan retroactively since 2011 on the basis that such persons pose, by virtue of their travel, a “terrorist risk.”

Some of this red flagging already occurs in respect of visits to Turkey, Syria and Iraq between airlines and law enforcement but now it includes Iran and is retroactive to 2011. Countries in the EU that are part of the Visa Waiver Program may have privacy law impediments that prevent them from sharing information of this nature with the US.

More importantly, countries in the EU may have constitutional law impediments that prevent them from treating, as a matter of law, their citizens as a “terrorist risk” simply for having been in Iran, Iraq, Syria or Sudan or being a foreign national of Iran in particular, which is not an ISIS safe haven.

The law is overly broad because it paints nationals from four countries and anyone who has been there in the last five years as a “terrorist risk.” Iran has almost 80 million people and another 10 million that live outside Iran based on their laws of nationality. Syria has mostly a displaced population of 13 million – together, just those two countries combined equal 100 million people – they cannot possibly all be a “terrorist risk” irrespective of anything else.

Trade with Iran Will be Impacted from EU

It seems likely that some countries in the EU will be resistant to red flag their citizens who have traveled to Iran as a “terrorist risk” because of the growing number of countries in the EU engaging in lucrative commercial deals with Iran. Equally, EU citizens will not want to be flagged as a “terrorist risk” in government databases simply for having visited Tehran for trade and commerce, and be prevented from ever going to the US. It isn’t just the inclusion in government databases as a terrorist risk that is of concern for foreign nationals – some airlines also report to law enforcement when people book travel to certain destinations such as Turkey, Syria or Iraq. The airline reporting will now include Iran. As a result, a person visiting Iran for business purposes from a Visa Waiver Program country in the EU will be double-flagged –> first by the airline and then by a law enforcement agency for reporting purposes pursuant to HR 158 (and other security programs).

HR 158 will put a freeze on the willingness of business people in the EU to engage in trade with Iran.

HR 158  will also contravene at least three clauses of the Joint Comprehensive Plan of Action (“JCPOA“) with Iran, and will cause the EU to contravene at least one clause of the JCPOA.

It would not be surprising if the real purpose behind adding Iran to the list pursuant to HR 158 is to discourage corporations in the EU from engaging in trade with Iran in order to delay EU-Iran trade to give American corporations a level playing field in trade with Iran, which suggests Iran will be removed from HR 158 just as most US sanctions are lifted.

Pursuant to HR 158, the only four material countries whose citizens can engage in trade with Iran without being labelled a terrorist risk are Canada, China, India and the US.

Iranian Nationals

HR 158 is particularly impactful for Iranians. That is because under Iranian law, all children of Iranian fathers are Iranian nationals unless they have formally renounced Iranian citizenship. Not many have and consequently, people in the EU who have Iranian parentage are, under HR 158, a terrorist risk and do not qualify for admission in the US under the Visa Waiver Program. HR 158 is specifically designed to capture this so-called dual citizen class of Iranians. The same applies for Syrians, who are no less impacted, however, they are less numerous and less spread across the EU or able to finance travel to the US.

A Change of Heart?

I suspect two things will happen in respect of HR 158:

(1) Iran will react negatively over HR 158 and will take some action to protect its trade relationship with the EU, including seeking support from the EU; and (2) some members of the US Congress will (i) change their minds about voting for HR 158, particularly if journalists from the EU become concerned regarding the implications of HR 158 and how it impacts their freedom to report the news in conflict zones like Syria and Iraq, without fear of being branded a “terrorist risk” under the Visa Waiver Program; and (ii) change their minds in respect of the fact that they failed to exempt humanitarian aid organizations and workers because it is inconsistent with US foreign policy in respect of supporting humanitarian aid delivery by the private and NGO sectors.

You can read our article in Quartz here on the issue of HR158. 

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Towards redefining financial inclusion

By Christine Duhaime | December 7th, 2015

Financial inclusion continues to be an important part of the dialogue on anti-money laundering and counter-terrorist financing law, because the latter results in a greater number of people being de-risked out of financial services or denied banking services altogether. In this piece in American Banker, we explore the issues that arise with the way in which we define financial inclusion and suggests a redefinition that is more inclusive.

“Let’s Put the Inclusive Back in Financial Inclusion.” –> American Banker.

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Is there a terrorism risk for Canada in accepting 25,000 refugees?

By Christine Duhaime | November 17th, 2015

Terrorist risks for refugees

There appears to be a debate that has the potential to escalate in this country in respect of whether there are risks for Canada in taking in 25,000 Syrian refugees.

No decision is ever risk-free. The decision to accept Syrian refugee is no different – it is not risk free. But it does not mean we should not do our part as humanitarians, and curb our intake of 25,000 refugees.

First some facts. At this time, as a result of ISIS, there are genuine national security risks with the Syrian refugee population generally. I think one of the most dangerous things we can do is to pretend there are no risks. Of course there are.

That’s because, inter alia, ISIS has said that they will send their people in among the refugee population to infiltrate the West in order to attack us and our way of life. And moreover, there are many members of ISIS who pretend to be legitimate Syrian refugees living in places like Turkey and in refugee camps. The New York Times has a story here about two members of ISIS’ feared police force who slipped into Turkey with legitimate refugees and now reside with the Syrian refugee population, hiding their identity as members, or former members, of a listed terrorist organization.

ISIS issues fake but real passports

ISIS has control over the issuance of fake, but real, Syrian passports and, for quite a while, has been issuing fake, but real, Syrian passports for a host of purposes, including for terrorist financing.

The most famous case is the leader of ISIS’ wife, Saja al Dulaimi, who was given a Syrian passport (she is a well known and wealthy Iraqi, not Syrian) and together with her children, travelled from Syria to Lebanon where she claimed to be a Syrian refugee. She traveled back and forth undetected on a mission as a terrorist financier, who carried money from the refugee settlements back to ISIS until she was arrested.

Another prominent example – the 3 teenage girls from the UK who defected to join ISIS in March 2015, were given fake (but real) passports in Turkey under their real names and photos.  You can hear the conversation in video footage secretly filmed here (at 1:05 – 1:20).

Refugees flee without documents

Refugees often flee their homes without passports, if they ever had any, and often (more often than not), buy fake ones along the escape route to facilitate their entry into the EU, or if they are in Jordan, Lebanon or Turkey, to be able to re-start their lives. That’s simply because without any ID, no person, including a refugee, can obtain any sort of assistance or move on with their lives. Refugees have to survive and at the moment when they decide to buy fake ID, I doubt they are appreciating the fact that the conduct is criminal, or may render them inadmissible to a place like Canada. They simply want to settle down and feed their families. You can read more here about the fake passport trade, and why ISIS uses fake passports, and the financial crime issues associated with that trade.

Syrian documents are now considered suspect

Whether a Syrian refugee has a passport or not, at this stage, considering that the intelligence community has put an alert on all documents in respect of Syria as being at risk for fraud, the CBSA will still have to confirm the validity of  identities of refugee claimants. The reality is that it will be difficult to ascertain the identity of 25,000 refugee claimants from a country with no effective government which does not have any agency with whom Canadian officials can confirm 25,000 identities online, or offline. Syria is a bombed-out state with little in the way of infrastructure remaining. As a result, it will be time-consuming and a monumental task to ascertain and confirm the identity of persons claiming to be Syrian refugees with cultural and linguistic barriers at play.

Incredible intelligence resources are needed to vet refugees for threats

Compounded to the issue of the potential for fraudulent use of documentation, is the issue that, among the Syrian population, there may indeed be one or more members of ISIS who are former disenchanted members, or active members coming to Canada with the intention of causing harm to Canada. It’s very hard to know and it would require an incredible amount of intelligence personnel to interview each refugee claimant in order to assess whether each is a security threat to Canada. We do not have the resources in Canada to do that. Not for 500 or for 25,000.

So, given the above, is there a terrorism risk of accepting 25,000 Syrian refugees in Canada? Clearly, there is a theoretical risk but with all risks, it does not mean that the risks cannot be mitigated. How then, do we mitigate risks from a national security perspective to provide comfort to Canadians to open the borders and let 25,000 refugees in?

We Can Mitigate National Security Concerns With Refugees

In Canada, we can make better choices about which refugees we accept to come to Canada by selecting refugees who are less of a risk.

There are 34,000 children per year who claim refugee status who have no parents. They live in refugee camps, or worse, on the streets in Istanbul or in internally displaced settlements. They need food, shelter and desperately need an education. Many countries like Canada do not readily accept unaccompanied minors who are refugees. But we should. Children need protection the most. Children are much less likely to be hardened ISIS terrorists.

The same is true for women who are mothers. They rarely have time to both care for children and plan acts of terrorism.

Syrian refugees who are well-educated and were self-employed or gainfully employed is another low-risk category for terrorism activities. Moreover, their identities are more easily confirmable with universities and such.

Refugees have values that don’t align with terrorism

I do not think we should sit by and do nothing while the refugee crisis spirals out of control and 60 million displaced refugees become 80 million.

Genuine Syrian refugees left ISIS – they could have stayed and become terrorists but elected to leave because they have values that don’t align with terrorism. Are we really not going to do our part in the world and take them in, despite the risks? Even if we mitigate the risks, as described above, we can’t eliminate all risks and if we wait for that to happen, we won’t be accepting any refugees at all. We have to be willing to assume some risk or slow down the process until it grinds to a halt while we search for the perfect, documented refugee in the midst of  imperfect chaos.

Banking refugees

One issue we need to consider, but haven’t yet in the banking community, is how to on-board refugee clients at financial institutions in the West, including Canada, with Syrian documents that we know are likely fake. Not only can their identity not be ascertained, it can’t be confirmed and banks will have no idea who they are banking, or whether there are risks associated with that banking relationship.

I think we need to come together with solutions that address CTF and financial inclusion in banking in the context of the refugee crisis.

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A difficult issue facing the refugee crisis – the fake Syrian refugee and its terrorism and money laundering concerns

By Christine Duhaime | October 20th, 2015

Complicated Growing Use of Fake Syrian Passports

According to several recent news reports, many, many refugees and migrants entering, or who have entered, the EU are doing so with false Syrian passports, creating what may be the biggest mass fraud of our time and the largest money laundering activity by sheer volume. In addition to the insurmountable financial crime concerns with the trafficking and use of false passports, there are terrorism and terrorist financing risks that threaten international security. ISIS has repeatedly promised to send their specially-trained terrorists from Syria on migrant boats posing as fake refugees with the solitary mission of carrying out acts of terrorism to destabilize the West. Overlaying all of this is the fact that there are 60 million refugees in the world and we are facing the worse humanitarian crisis ever. The issues are multi-faceted and complex.

With respect to fake passports:

  • Police in Bulgaria intercepted a box of 10,000 fake Syrian passports in the postal system that were destined for Germany.
  • A Moroccan man wanted for ISIS terrorist-related activities was arrested by police in Germany who was living at a refugee centre. He used a fake Syrian passport to enter the EU as an alleged Syrian refugee. He was on an Interpol terrorist wanted list.
  • The head of EU’s Frontex told Europe 1 media that trafficking in fake Syrian passports is a growing criminal business in Turkey.
  • Refugees in Turkey and who have made it to the EU readily admit that they used or bought fake ID to travel and apply for refugee protection, and refugee financial support. 
  • Several journalists in the Middle East have reported being able to easily buy false Syrian documents from traffickers. Reporter Harald Doornbos obtained a fake Syrian passport for $825 with a photo of the Dutch Prime Minister on it (pictured at the right). A UK reporter was able to negotiate for a fake Syrian passport for $2,000 on a Facebook page run by human traffickers.

4 Types of Fake Syrian Passports

There are four types of fake Syrian passports:

1. There are passports that ISIS is manufacturing for terrorism-related purposes to send people to the EU and North America to commit acts of terrorism. Because ISIS has access, and control over some government functions in Syria, it is able to produce real passports with fake information. It also produces fake passports to allow foreign defectors to enter Syria from Turkey and creates fake passports for human trafficking and human slavery purposes.

2. There are real Syrian passports for sale – these are blank passports stolen from the Syrian government that are essentially ready-to-go where the fraudster merely needs to insert the purchaser’s photo and seal it for completion.

3. There are partially real Syrian passports – these are official Syrian passport templates from the Syrian government but they have false information inserted derived from identity stolen online or from a tourist that was stolen in Turkey.

4. Finally, there are homemade Syrian passports made in Turkey or Lebanon that a person can obtain with his or her real name, or a fake name. These are the least popular and cost the least.

Traffickers use social media to market and sell fake passports and Facebook is a popular marketing venue, such as the Facebook page pictured here with 117,819 members that reporters have used to buy fake documents.

Reasons Why Fake Syrian Passports are in Demand

There are multiple reasons why fake passports are in demand and being created, resulting in such a booming organized crime business.

For Terrorist Acts

A key one (which is of concern for international security), as noted above, is that ISIS needs such passports for terrorism-related purposes to send terrorists into the West to commit acts of terrorism. These passports are the most sophisticated and essentially are undetectable in terms of documentation because they are official in the sense that they are created by ISIS but with official government tools. Only the holder thereof knows he or she is not the person named on the passport.

For Terrorist Financing

ISIS also issues passports to send its people out to other countries for terrorist financing purposes. The most compelling story of this occurring was the situation whereby ISIS’ leader, al Baghdadi, had Syrian passports made for his spouse and their child (who are Iraqi foreign nationals, not Syrian) so that they could live in a refugee camp as UNHCR registered refugees, and collect terrorist funds sent to the refugee camp for ISIS and transport the funds back to ISIS in Syria. It is believed that al Baghdadi’s spouse acted as a terrorist financing money mule for about a year before she was arrested by Lebanese officials.

For Access to EU

Fake passports enable people who are truly or falsely claiming refugee status to rapidly become a Convention refugee in the EU and obtain benefits, including the right to work.

The trafficking in fake Syrian passports is so effective, that many foreign nationals from poor countries who are not refugees, are leaving their own countries, entering Syria or Turkey, obtaining fake ID and then departing for the EU in order to gain access as a Syrian refugee claimant fraudulently. No doubt they are leaving conditions  of hardship but in law, they are not refugees and are not entitled to Convention protection or its benefits.

Economic migrants use the refugee crisis for admission to the EU. The EU has said that nine out of ten refugee claimants who enter Serbia from Macedonia claim to be Syrian refugees and seek refugee protection but are not Syrian. The UNHCR has said that out of the nearly 400,000 people who entered Italy and Greece in 2015, only half were refugees from Syria. Many are economic migrants from other places, such as North Africa, who claim refugee protection.

For Employment and Shelter

Fake passports are sought and bought by real refugees because they do not have any identity documents and believe that using fake documentation will assist them enter another country. Having official documentation is a condition precedent in many host countries for refugees to rent an apartment, get a job and send their children to school. Some do it for survival.

Criminal Gangs Traffic in Passports

The problems with the growth of the trafficking of fake passports is that it poses a real threat of infiltration of terrorists; it allows groups like ISIS to increase their financing capabilities when their people enter the EU or the West with access to banking facilities. We will be banking members of ISIS without knowing it; it fuels the growth of transnational organized criminal gangs who are engaged in human trafficking, human smuggling, and document trafficking; and it is creating a whole swath of people who are living under false identities. Eventually, their true identities will emerge and we will see mass prosecutions and deportations of refugee claimants who bought and used false documents.

The Biggest Mass Fraud in the World

It is already the world’s biggest mass fraud with hundreds of thousands of non-refugees using false passports to commit fraud against the UNHCR, aid agencies that provide humanitarian aid, employers, social services agencies and governments. While everyone can likely understand the desperation that may drive people to make such decisions, the numbers involved and therefore the criminality of the activity, is staggering and threatens the integrity of the EU’s immigration system and national security interests. There is not enough humanitarian aid to go around and abuse of the system from criminal activity means legitimate refugees fleeing terrorism suffer from increased poverty and lack of essential services. Some may not survive.

The Most Voluminous Money Laundering Activity

It is also the biggest concentration of financial crime activity with money laundering occurring on an unprecedented scale by volume of participants who are making payments for illegal services to human traffickers, human smugglers and document traffickers, generating huge amounts of proceeds of crime that are deposited in financial institutions by criminal gangs in the EU and Turkey unimpeded.

Frontex is Concerned

There is a good interview (en francais) with the Director of Frontex, Fabrice Leggeri, below, regarding migrants, refugees, illegal immigration and the problem of transnational organized criminal gangs selling fake passports.  He says:

  • There is an increase of 175% in the number of irregular migrants who crossed borders into the EU in 2015, compared t0 2014.
  • In 2015, 340,000 people who were irregular migrants with fake identity,  were detected in EU. Many more were not detected.
  • There is a system of saturation of the registration system for refugees and migrants in the EU and thus, not all can be registered.


Leggeri : “Tous les migrants ne sont pas… by Europe1fr

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Developer sued for taking proceeds of crime from foreign nationals

By Christine Duhaime | October 18th, 2015

New York real estate developer being sued for $18 billion for accepting alleged proceeds of corruption from foreigners who were known PEPs

According to an article yesterday in the Wall Street Journal, real estate developers in New York are being sued for accepting proceeds of corruption from politically exposed persons (PEP). The plaintiffs are the parties who were the victims of corruption – a municipality in Kazakhstan and a bank of Kazakhstan, BTA Bank. They filed a civil claim against two men accused of removing $40 million from Kazakhstan and parking it into real estate in New York City.

Both accused are politically exposed persons – one is the former chairman of the BTA Bank, Mukhtar Ablyazov who is in jail in France, and the other the Mayor of the Kazakh city of Almaty, Viktor Khrapunov. Allegedly, they removed billions from Kazakhstan as proceeds of corruption.

The plaintiffs are also suing an American real estate developer, Joseph Chetrit, for accepting the alleged proceeds of corruption and allowing the funds to be parked in real estate developments. The plaintiffs are seeking $18 billion in damages.

To read more about Mukhtar Ablyazov and the billions that apparently vanished from BTA Bank, see here. He is implicated in the biggest fraud case in the UK and was ordered extradited to Russia and the Ukraine after he fled from the UK mid-trial in 2012 and went into hiding in France. In addition to the New York real estate portfolio, he owns a mansion in London.

Corrupt foreign officials and PEPs are a money laundering concern. When they steal billions from emerging and nascent economies, it tends to devastate those economies to the point often of causing economic disasters, harming millions of innocent people in those countries who lose their livelihoods. The Ukraine is an example where over $80 billion was allegedly illegally removed, the result of which is a country that is essentially bankrupt with a devastating refugee problem and civil unrest.

In an odd development, a human rights organization is fighting against the extradition of Mukhtar Ablyazov because in their view, to extradite a billionaire living in a luxurious castle in France that is paid for with alleged proceeds of crime allegedly owed to the taxpayers of Kazakhstan would violate his human rights. No one seems to be asking the question: “What about the rights of the ordinary people in countries devastated by financial crimes committed by powerful PEPs?”

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UN Chief charged in money laundering bribery scheme for allegedly accepting millions in cash from Chinese casino billionaire

By Christine Duhaime | October 8th, 2015

Former UN President Charged

The former United Nations (“UN”) President of the UN General Assembly, John Ashe, the UN Deputy Ambassador, Francis Lorenzo, a Chinese foreign national billionaire, Ng Lap Seng (also known as David Ng) and two of his associates were charged in New York with various offenses over an alleged bribery scheme. Two defendants were charged with money laundering. According to the criminal complaint, the UN President accepted over $1 million in bribes from Ng Lap Seng in exchange for supporting his Chinese business ventures. He used the money for a BMW, Rolex watches, vacations and expensive clothing.

Moving Bulk Cash from China

Ng Lap Seng was earlier charged in the US with lying to immigration authorities when he brought in $4.5 million in cash from China over a two-year period. He moved vast sums of cash from China to the West the old-fashioned way – by carrying it with him in bulk cash in private jets. For example, allegedly on March 6, 2014, Ng flew to JFK with $300,000. Then returned again on April 18, 2014 with $300,000 and again on June 13, 2014 with $390,000. After that, he started to land in Alaska, once with as much as $900,000 in bulk cash before transferring to New York City. Ng is the co-owner of a Macau casino, the Fortuna.

Facilitated Money Laundering

According to the allegations contained in the Complaint, Ng Lap Seng and his associates in China facilitated the transmission and laundering of over $1 million of bribery money from sources in China through wires from banks in China that were paid to the UN chief.

U.S. Attorney Preet Bharara said that if proven, the charges will confirm that the cancer of corruption that plagues governments infects the United Nations.  ”As alleged, for Rolexes, bespoke suits, and a private basketball court, the President of the UN General Assembly, sold himself and the global institution he led.” The US Attorney said his office would continue to look at the UN.

Politically Exposed Persons

Each of Ng, Lorenzo and Ashe are politically exposed persons (“PEP“) in anti-money laundering law by virtue of their political connections and positions. Ng, for example, heads a large NGO in New York City with connections to the UN. Moreover, he is also politically exposed as a member of the government of Macau with known ties to the government of China. As PEPs, they and all of their family members and associates are subject to greater banking due diligence in respect of their financial transactions and sources of funds.

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