FATF Public Statement

The Financial Action Task Force (FATF) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from ML/FT risks and to encourage greater compliance with the AML/CFT standards, the FATF identified jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions*.

Iran

Democratic People's Republic of Korea (DPRK)

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies** The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.

Bolivia
Cuba**
Ethiopia
Kenya
Myanmar
Sri Lanka
Syria
Turkey


* The FATF has previously issued public statements calling for counter-measures on Iran and DPRK. Those statements are updated below.
**Cuba has not engaged with the FATF in the process.


Iran

The FATF remains concerned by Iran’s failure to meaningfully address the on-going and substantial deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The FATF remains particularly concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system. The FATF urges Iran to immediately and meaningfully address its AML/CFT deficiencies, in particular by criminalising terrorist financing and effectively implementing suspicious transaction reporting (STR) requirements.

The FATF reaffirms its call on members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions. In addition to enhanced scrutiny, the FATF reaffirms its 25 February 2009 call on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from Iran. FATF continues to urge jurisdictions to protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices and to take into account ML/FT risks when considering requests by Iranian financial institutions to open branches and subsidiaries in their jurisdiction. If Iran fails to take concrete steps to improve its AML/CFT regime, the FATF will consider calling on its members and urging all jurisdictions to strengthen counter-measures in October 2011.

Cuba

Cuba has not committed to the AML/CFT international standards, nor has it constructively engaged with the FATF. The FATF has identified Cuba as having strategic AML/CFT deficiencies that pose a risk to the international financial system. The FATF urges Cuba to develop an AML/CFT regime in line with international standards, and is ready to work with the Cuban authorities to this end.

Bolivia

Despite Bolivia’s high-level political commitment to work with the FATF and GAFISUD to address its strategic AML/CFT deficiencies, Bolivia has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Bolivia should work on addressing these deficiencies including by: (1) ensuring adequate criminalisation of money laundering (Recommendation 1); (2) adequately criminalising terrorist financing (Special Recommendation II); (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); and (4) establishing a fully operational and effective Financial Intelligence Unit (Recommendation 26). The FATF encourages Bolivia to address its remaining deficiencies and continue the process of implementing its action plan, including by continuing to work on its AML/CFT legislation.

Ethiopia

Despite Ethiopia’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, Ethiopia has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Ethiopia should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing an adequate legal framework and procedures to identify and freeze terrorist assets (Special Recommendation III); (3) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (4) raising awareness of AML/CFT issues within the law enforcement community (Recommendation 27); and (5) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17). The FATF encourages Ethiopia to address its remaining deficiencies and continue the process of implementing its action plan.

Kenya

Despite Kenya’s high-level political commitment to work with the FATF and ESAAMLG to address its strategic AML/CFT deficiencies, Kenya has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Kenya should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (3) establishing and implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); (4) raising awareness of AML/CFT issues within the law enforcement community (Recommendation 27); and (5) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17). The FATF encourages Kenya to address its remaining deficiencies and continue the process of implementing its action plan, including by implementing the AML legislation and operationalising the new AML Advisory Board.

Myanmar

Myanmar has taken steps towards improving its AML/CFT regime, including by clarifying the scope of the ML offence. Despite Myanmar’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Myanmar has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Myanmar should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) further strengthening the extradition framework in relation to terrorist financing (Recommendation 35 and Special Recommendation I); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (5) enhancing financial transparency (Recommendation 4); and (6) strengthening customer due diligence measures (Recommendation 5). The FATF encourages Myanmar to address its remaining deficiencies and continue the process of implementing its action plan.

Sri Lanka

Despite Sri Lanka’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Sri Lanka has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Sri Lanka should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); and (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III). The FATF encourages Sri Lanka to address its remaining deficiencies and continue the process of implementing its action plan, including by continuing to work on its AML/CFT legislation.

Syria

Syria has taken steps towards improving its AML/CFT regime, including by improving the ML and TF offences. Despite Syria’s high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies, Syria has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain Syria should work on addressing its deficiencies, including by: (1) adopting adequate measures to implement and enforce the 1999 International Convention for the Suppression of Financing of Terrorism (Special Recommendation I); (2) implementing adequate procedures for identifying and freezing terrorist assets (Special Recommendation III); (3) ensuring financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to ML and FT (Recommendation 13 and Special Recommendation IV); and (4) ensuring appropriate laws and procedures are in place to provide mutual legal assistance (Recommendations 36-38, Special Recommendation V). The FATF encourages Syria to address its remaining deficiencies and continue the process of implementing its action plan.

Turkey

Turkey has taken steps towards improving its AML/CFT regime, including by working on CFT legislation. Despite Turkey’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, Turkey has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Turkey should work on addressing these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); and (2) implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III). The FATF encourages Turkey to address its remaining deficiencies and continue the process of implementing its action plan.

Source: FATF

US maintains Cuba, Iran, Sudan, Syria on terror sponsors' list

The US has retained Cuba, Iran, Sudan and Syria on the list nations which allegedly sponsor of terrorism.

The State Department retained these four countries in this list after Secretary of State Hillary Clinton determined that the government of these nations has repeatedly provided support for acts of international terrorism.

As a result, these countries would face a wide range of sanctions including a ban on arms-related exports and sales; controls over exports of dual-use items, requiring 30-day Congressional notification for goods or services that could significantly enhance the terrorist-list country's military capability or ability to support terrorism; prohibitions on economic assistance and imposition of miscellaneous financial and other restrictions.

Designated as a State Sponsor of Terrorism in 1982, the Government of Cuba maintained a public stance against terrorism and terrorist financing in 2010, but there was no evidence that it had severed ties with elements from the Revolutionary Armed Forces of Colombia and recent media reports indicate some current and former members of the Basque Fatherland and Liberty continue to reside in Cuba, the State Department said.

Iran, designated as a State Sponsor of Terrorism in 1984, remained the most active state sponsor of terrorism in 2010.

Tehran's financial, material, and logistic support for terrorist and militant groups throughout the Middle East and Central Asia had a direct impact on international efforts to promote peace, threatened economic stability in the Gulf, and undermined the growth of democracy, it said.

In 2010, Iran remained the principal supporter of groups implacably opposed to the Middle East Peace Process, it added. Sudan, which was designated as a State Sponsor of Terrorism in 1993, the State Department said remained a cooperative partner in global counter-terrorism efforts against al-Qaida in 2010.

During the past year, the Government of Sudan worked actively to counter AQ operations that posed a potential threat to US interests and personnel in Sudan.

Sudanese officials have indicated that they viewed continued cooperation to the US as important and recognized the potential benefits of American training and information-sharing.

Syria was designated as the State Sponsor of Terrorism in 1979. In 2010, it continued its political support to a variety of terrorist groups affecting the stability of the region and beyond, the report said.

The State Department said Syria provided political and weapons support to Hizballah in Lebanon and allowed Iran to resupply the terrorist organization with weapons.

The external leadership of Hamas, the Palestine Islamic Jihad, the Popular Front for the Liberation of Palestine, and the Popular Front for the Liberation of Palestine-General Command, among others, were based in Damascus and operated within Syria's borders.

Statements supporting terrorist groups like Hamas and Hizballah consistently permeated government speeches and press statements, it said.

Source: Deccan Herald

FinCEN Guidance to Financial Institutions on Recent Events and the Commercial Bank of Syria

FinCEN Advisory

FIN-2011-A013
Issued:	August 10, 2011
Subject:	Guidance to Financial Institutions on the Commercial Bank of Syria

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In coordination with Wednesday's designation of the Commercial Bank of Syria for its provision of financial services to entities previously sanctioned by the United States for their proliferation activities, the Financial Crimes Enforcement Network (FinCEN) is issuing this Advisory today to alert U.S. financial institutions of information on the Commercial Bank of Syria's continued involvement in illicit financial activities.

On March 15, 2006, FinCEN issued a Final Rule under Section 311 of the USA PATRIOT Act prohibiting U.S. financial institutions from opening or maintaining a correspondent account in the United States for or on behalf of the Commercial Bank of Syria, directly or indirectly, and requiring all covered financial institutions to review their account records to ensure they do not maintain accounts directly for, or on behalf of, the Commercial Bank of Syria¹. This Final Rule followed a Notice of Proposed Rulemaking (NPRM) and Finding on May 18, 2004, which determined that the Commercial Bank of Syria was (1) used by persons associated with terrorist organizations; and (2) used as a conduit for the laundering of proceeds generated from the illicit sale of Iraqi oil.²

Since this Final Rule was issued, the Commercial Bank of Syria has engaged in transactions with multiple proliferation-related entities, including several named in U.S., EU, and UN sanctions, which led to today's designation of the Commercial Bank of Syria pursuant to U.S. counter-proliferation sanctions authorities. The Commercial Bank of Syria is believed to have been used by a provider of lethal support to Al -Qa'ida in Iraq.

Guidance

U.S. financial institutions are reminded that the Final Rule mentioned above imposed the fifth special measure under Section 311, prohibiting U.S. financial institutions from maintaining correspondent accounts for the Commercial Bank of Syria. While the Commercial Bank of Syria no longer maintains direct correspondent relationships with U.S. banks, financial institutions are reminded of their continuing obligation to exercise due diligence with respect to their correspondent accounts that is reasonably designed to guard against indirect use of those accounts by the Commercial Bank of Syria.³ Contrary to what might be expected, financial institutions are advised that the Commercial Bank of Syria continues to maintain U.S. dollar-denominated accounts at various banks throughout Europe, the Middle East, and Asia.

Financial institutions are advised that the Commercial Bank of Syria may attempt to circumvent the prohibitions in the special measure through "nested account" activity. Such activity generally involves a financial institution gaining anonymous access to a financial system by operating through a domestic correspondent account belonging to a third party foreign financial institution rather than maintaining its own correspondent account. Examples of potentially suspicious activity related to nested accounts may include, but are not limited to:

• Transactions to and from jurisdictions in which the foreign financial institution has no known business activities or interests.


• Transactions in which the total volume and frequency exceeds expected activity for the foreign financial institution, considering its customer base or asset size.

In addition to the requirements under the Final Rule discussed above, FinCEN reminds U.S. financial institutions of their requirement under the BSA to report suspicious transactions conducted or attempted by, at, or through the U.S. financial institution.⁴ A transaction is suspicious if it (a) involves funds derived from illegal activity, (b) is indicative of structuring, money laundering, terrorist financing, or any other violation of federal law or regulation, or (c) has no business or apparent lawful purpose, or is not the sort in which the customer is normally expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts.⁵

Questions or comments regarding the contents of this advisory should be addressed to the FinCEN Regulatory Helpline at 800-949-2732.

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¹ See generally 71 FR 13260, "Financial Crimes Enforcement Network: Amendment to the Bank Secrecy Act Regulations - Imposition of Special Measure Against Commercial Bank of Syria, Including Its Subsidiary, Syrian Lebanese Commercial Bank, as a Financial Institution of Primary Money Laundering Concern," [Final Rule] (March 15, 2006).http://www.fincen.gov/statutes_regs/patriot/pdf/noticeoffinalrule03152006.pdf. ² See generally, 69 FR 28098, "Financial Crimes Enforcement Network: Amendment to the Bank Secrecy Act Regulations - Imposition of Special Measure Against Commercial Bank of Syria, Including Its Subsidiary, Syrian Lebanese Commercial Bank, as a Financial Institution of Primary Money Laundering Concern," [Notice of Proposed Rulemaking] (May 18, 2004).http://www.fincen.gov/statutes_regs/patriot/pdf/311syrianprm.pdf. ³ 31 CFR 1010.653(b)(2).⁴ A transaction is suspicious if it falls within one of the categories enumerated in our suspicious activity reporting (SAR) rules. A transaction requires reporting if the transaction satisfies the monetary threshold in our SAR rules, and the financial institution "knows, suspects, or has reason to suspect" that the transaction is suspicious. Financial institutions should note that our rules allow for the voluntary filing of SARs. See, e.g., 31 CFR 1020.320.

⁵ Id.

FinCEN Advisory

FIN-2011-A010
Issued:	July 8, 2011
Subject:	Guidance to Financial Institutions on Recent Events in Syria

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The Financial Crimes Enforcement Network (FinCEN) is issuing this Advisory to U.S. financial institutions to take reasonable risk-based steps with respect to the potential increased movement of assets that may be related to the current unrest in Syria.¹ During this period of uncertainty, FinCEN is issuing this Advisory to remind U.S. financial institutions of their requirement to apply enhanced scrutiny for private banking accounts held by or on behalf of senior foreign political figures² and to monitor transactions that could potentially represent misappropriated or diverted state assets, proceeds of bribery or other illegal payments, or other public corruption proceeds.

Financial institutions should be aware of the possible impact the events in Syria may have on patterns of financial activity when assessing risks related to particular customers and transactions. For example, as a result of the unrest in Syria, information available to the U.S. Government indicates Rami Makhluf, a cousin to Syrian President Bashar Assad and prominent Syrian businessman, is taking steps to protect his money, properties and companies. Rami Makhluf was designated by the Department of the Treasury's Office of Foreign Assets Control (OFAC) on February 21, 2008 for improperly benefiting from and aiding the public corruption of Syrian regime officials.³ On May 18, 2011, OFAC also designated three companies and one individual for their links to Makhluf: Cham Holding and its Chairman Nabil Rafik al Kuzbari, Bena Properties, and Al Mashreq Investment Fund.⁴ Further, on July 10, 2008, OFAC identified Syriatel and Ramak, two companies in which Makhluf owns, directly or indirectly, a 50 percent or greater interest.⁵

The U.S. Government has reason to believe that Rami Makhluf is disassociating himself (in name only) from his businesses and looking to safely store his wealth outside of Syria. Financial institutions should be aware of risks associated with conducting transactions linked to Makhluf, as well as the requirements for enhanced scrutiny for private banking accounts held by or on behalf of senior foreign political figures under the Bank Secrecy Act.⁶

Guidance

If a financial institution knows, suspects, or has reason to suspect that a transaction relating to senior foreign political figures involves funds derived from illicit activity, if the transaction appears to have no business or lawful purpose, or if a customer has engaged in activities indicative of money laundering, terrorist financing, or any other violation of federal law or regulation, the financial institution must file a Suspicious Activity Report (SAR).⁷ Additionally, covered financial institutions are reminded of the regulations implementing Section 312 of the USA PATRIOT Act, (31 U.S.C. 5318(i)), which require a written due diligence program for private banking accounts held for non-U.S. persons designed to detect and report any known or suspected money laundering or other suspicious activity.⁸ In instances where senior foreign political figures maintain private banking accounts at a covered institution, those financial institutions are required to apply enhanced scrutiny of such accounts to detect and report transactions that may involve the proceeds of foreign corruption. ⁹

In April 2008, FinCEN issued Guidance to assist financial institutions on reporting suspicious activity regarding proceeds of foreign corruption. That Guidance also highlights potential indicators of transactions that may be related to proceeds of foreign corruption.¹⁰In May 2011, FinCEN released a SAR Activity Review - Trends Tips and Issues specifically on foreign corruption, which highlights general regulatory requirements, general due diligence procedures, and frequently asked questions related to senior foreign political figures and corruption.¹¹ Financial institutions may find the Guidance document and SAR Activity Review useful in assisting with suspicious activity monitoring and due diligence requirements related to senior foreign political figures.

Questions or comments regarding the contents of this advisory should be addressed to the FinCEN Regulatory Helpline at 800-949-2732.

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¹ For information from the United States Department of State regarding developments in Syria, please see http://www.travel.state.gov/travel/cis_pa_tw/cis/cis_1035.html. ² "Senior foreign political figure" means a current or former senior official of a foreign government or of a major foreign political party; a senior executive of a foreign government-owned commercial enterprise; a corporation, business, or other entity that has been formed by, or for the benefit of, any such individual; the immediate family members of any such individual; and a person who is widely and publicly known (or is actually known by the relevant covered financial institution) to be a close associate of such individual. For the purposes of this definition, "senior official or executive" means an individual with substantial authority over policy, operations, or the use of government-owned resources and "immediate family member" means spouses, parents, siblings, children and a spouse's parents and siblings. See 31 CFR 1010.620(c) and 31 CFR 1010.605(p). ³ Office of Foreign Assets Control, "Changes to List of Specially Designated Nationals and Blocked Persons Since January 1, 2008." (February 21, 2008).http://www.treasury.gov/resource-center/sanctions/SDN-List/Documents/sdnew08.pdf, and see generally, HP-834, "Rami Makhluf Designated for Benefiting from Syrian Corruption" (February 21, 2008). http://www.treasury.gov/press-center/press-releases/Pages/hp834.aspx.⁴ Office of Foreign Assets Control, "Changes to List of Specially Designated Nationals and Blocked Persons Since January 1, 2011." (May 18, 2011).http://www.treasury.gov/ofac/downloads/t11sdnew.pdf, and see generally,TG-1181, "Administration Takes Additional Steps to Hold the Government of Syria Accountable for Violent Repression Against the Syrian People" (May 18, 2011).http://www.treasury.gov/press-center/press-releases/Pages/tg1181.aspx.⁵ Office of Foreign Assets Control, "Changes to List of Specially Designated Nationals and Blocked Persons Since January 1, 2008." (July 10, 2008). http://www.treasury.gov/press-center/press-releases/Pages/hp1075.aspx, and see generally, HP-1075, "Treasury Targets Rami Makhluf's Companies" (July 10, 2008). http://www.treasury.gov/press-center/press-releases/Pages/hp1075.aspx. ⁶ See 31 CFR 1010.620(c) and 31 CFR 1010.605(p). ⁷ See, e.g., 31 CFR § 1020.320. ⁸ See, generally, 31 CFR 1010.620.⁹ 31 CFR 1010.620(c).¹⁰ See "Guidance to Financial Institutions on Filing Suspicious Activity Reports Regarding the Proceeds of Foreign Corruption," FIN-2008-G005 (April 17, 2008).http://www.fincen.gov/statutes_regs/guidance/html/fin-2008-g005.html. 

¹¹ The SAR Activity Review - Trends Tips & Issues, Issue 19 (May 2011) [Published under the auspices of the BSA Advisory Group],http://www.fincen.gov/news_room/rp/files/sar_tti_19.pdf. 

Syrians accused of money laundering for terrorists arrested in Spain

July 26, 2007

Two Syrians alleged to be laundering money for international terrorists were arrested in Spain's capital Madrid, Spanish police said Wednesday.

Bassan Dalati Satut, 48, and Samer Dabbas, 30, both from the Syrian city of Aleppo, said that they were channeling money from Arab investors into Spain's construction sector.

The two men are accused of creating front companies which operated in the real estate sector to launder money contributed by members or supporters of radical Islamic organizations, a police statement said.

Satut is alleged to have been given the money-laundering job from Mohamed Ghaleb Kalaje Zouaydi, who is serving a nine-year prison term in Spain for helping plan the Sept. 11 attacks in New York and Washington.

Police also seized 120,000 euros (165,000 U.S. dollars), mobile phones and newspapers clippings about terror activities in an operation on Tuesday, the statement said.

Spanish police have increased their vigilance against Islamic terrorists since the March 11, 2004 attacks which killed 192 people in Madrid.

Source: Xinhua

http://english.people.com.cn/90001/90777/6224664.html

Senior Al Qaeda member killed in U.S. raid in Syria, officials say

Abu Ghadiyah was a key player in funneling foreign fighters to Iraq, a U.S. official says.

By Greg Miller and Josh Meyer
October 28, 2008

U.S. commandos crossing into Syria in an unprecedented raid this weekend killed a senior Al Qaeda associate accused of funneling fighters, weapons and cash to the insurgency in Iraq, U.S. officials familiar with the operation said Monday.

Abu Ghadiyah, the chief of a Syrian smuggling network who was killed in the controversial operation Sunday, was "one of the most prominent, if not the most prominent, facilitators of foreign fighters going into Iraq for Al Qaeda," a senior U.S. official said.

The raid was the latest sign that the U.S. is now willing to mount attacks in sovereign nations in pursuit of insurgent groups operating in Iraq and Afghanistan, as well as those who support them. Last month, U.S. special operations forces carried out a similar raid in the tribal border region of Pakistan, drawing loud criticism from the Pakistani public and senior government officials in Islamabad, the capital.

Syrian Foreign Minister Walid Moallem said the U.S. committed "criminal and terrorist aggression" by conducting a raid in which seven civilians died, including three children, a woman and a fisherman.

Two U.S. helicopters flew about five miles into Syria, he said, with one landing at a farm while the second provided cover. A villager told the Associated Press he saw at least two men taken into custody by U.S. forces and whisked away by helicopter. He spoke on condition of anonymity, saying he feared for his life.

U.S. officials did not say how many people died in the raid.

Abu Ghadiyah, an Iraqi native believed to be in his late 20s, has for several years been a key figure in the flow of foreign fighters and weapons into Iraq, American officials said.

"He comes from a family of smugglers," said the senior U.S. official. "He seems to have turned the family business toward the movement of terrorists, explosives, weapons, etc., into Iraq."

That official, along with others, spoke on condition of anonymity because of the classified nature of the operation.

Other than reporting Abu Ghadiyah's death, U.S. officials offered few details about the raid. Pentagon officials declined to comment. The rationale for using commandos was unclear.

Since the terrorist attacks on America in 2001, the United States has carried out dozens of missile strikes, mostly in Pakistan, but also in Yemen and elsewhere, aimed at killing Al Qaeda operatives. However, almost all of those operations have relied on CIA-operated Predator drones firing Hellfire antitank missiles.

The use of U.S. soldiers carries significantly greater risk and often leads to diplomatic strain, as has been the case with Pakistan.

U.S. counter-terrorism experts described Abu Ghadiyah, who is from Anbar province in western Iraq, as the head of a successful terrorist financial network supporting Iraq's Sunni Arab-led insurgency and a close associate of Al Qaeda in Iraq leaders.

"He's the classic example of a terrorist facilitator and financier," said Matthew Levitt, who from 2005 to early 2007 helped oversee a U.S. government crackdown on Abu Ghadiyah's financial network while deputy assistant secretary for intelligence and analysis at the Treasury Department.

However, Abu Ghadiyah's death is unlikely to decimate the network because of its strong funding streams and because other members, including a brother, have been active, said Levitt, now with the Institute for Near East Policy, a Washington-based think tank.

The Treasury Department had previously imposed financial sanctions on Abu Ghadiyah and family members, saying they facilitated and controlled the flow of money, weapons, terrorists and other resources through Syria to Iraq.

The effectiveness of such financial enforcement actions has been questioned. The actions target militants and those providing financial or material support, freezing any known assets under U.S. jurisdiction and prohibiting U.S. firms and individuals from doing business with them.

U.S. officials said Abu Ghadiyah, a nickname for Badran Turki Hishan Mazidih, was appointed by former Al Qaeda in Iraq leader Abu Musab Zarqawi to be the group's Syrian commander for logistics in 2004. After Zarqawi's death in 2006, Abu Ghadiyah began working for the new leader of Al Qaeda in Iraq, Abu Ayyub Masri, according to U.S. officials.

Abu Ghadiyah provided and arranged false passports, weapons, guides, safe houses and allowances to foreign terrorists preparing to enter Iraq, Treasury officials said.

U.S. officials maintain that Syria has long functioned as a hub for terrorist financing in Iraq, coordinating the movement of recruits and money between cells in Europe and Ansar al Islam training camps in northern Iraq.

In Baghdad, the Shiite Muslim-led Iraqi government said it wanted good ties with Syria but that Damascus needed to do more to stop fighters from slipping across its borders.

Iraqi government spokesman Ali Dabbagh described the region targeted by the Americans as the "scene for many terrorist activities of the last few months," including the killing of 13 policemen in an Iraqi border village in Anbar province. Staunch Syrian ally Iran, which holds enormous sway over the Baghdad government and opposes the U.S. troop presence in Iraq, condemned the U.S. operation.

"We condemn any attack which leads to the killing of innocents and civilians," Foreign Ministry official Hassan Qashqavi told reporters in Tehran.

Miller and Meyer are Times staff writers.

greg.miller@latimes.com

josh.meyer@latimes.com

Times staff writers Ned Parker and Saif Hameed in Baghdad, Borzou Daragahi in Beirut and Julian E. Barnes in Washington and special correspondent Ramin Mostaghim in Tehran contributed to this report.

Source: LA Times

Spain clears Syrians of terror financing

A Spanish court has cleared two Syrian-born men of indictments for alleged terrorist financing, according to court documents viewed by CNN on Monday.

The indictments, issued last year, were dropped last week against Bassam Dalati Satut and Mohamed Ghaleb Kalaje Zouaydi, although Kalaje is still serving a nine-year sentence for membership in a terrorist group, from a conviction in 2005 in Spain, court and prison officials told CNN.

A three-judge panel at the National Court, which hears terrorism cases, cleared the two of indictments issued in April 2007, that had accused Kalaje of membership in a terrorist group and accused Satut of the lesser charge of collaboration with a terrorist group.

Satut was acquitted in 2005 of belonging to a terrorist group, at a trial in which 18 of the 24 defendants, including Kalaje, were convicted of Islamic terrorist activities, court records show.

Spain's Supreme Court in 2006 overturned three of the lower court's convictions from that 2005 sentence, leaving 15 convicted, in what was one of Europe's largest trials involving operatives allegedly linked to al Qaeda.

In the latest case, the alleged crime of Satut and Kalaje, according to the indictments, was liquidating a company's accounts of thousands of dollars and allegedly diverting the funds to finance Islamic terrorist activities.

The National Court threw out the indictments on Thursday but the ruling did not became available to the media until Monday.

In clearing Satut and Kalaje, the court said the indictments were not backed by sufficient evidence to show that the two suspects, especially Kalaje - who was in prison on a prior terrorism conviction - had carried out terrorist financing.

Source: CNN