Persian Gulf nation comes under scrutiny as financial hub of terrorist attacks

By TAREK AL-ISSAWI
Associated Press Writer

DUBAI, United Arab Emirates – For years, liberal banking laws and commitment to free trade attracted enough business to help the United Arab Emirates lessen its reliance on oil and gas production – and become a commercial center of the Middle East.

Investigators now say those attributes also were attractive to the terrorists who attacked New York and Washington last month, and who needed a place from which to raise and distribute funds for the plot. In addition, one of the 19 suicide hijackers in the Sept. 11 attacks has been identified as an Emirates citizen.

The scrutiny is casting a negative light on liberal financial laws in the small Persian Gulf nation, which has become a major hub for deals involving large amounts of money originating or landing in the Middle East.

U.S. investigators believe they traced wire transfers from a man thought to have piloted one of the attackers' planes to Mustafah Ahmed of the Emirates, according to a U.S. law enforcement source in Washington, speaking on condition of anonymity. The investigators said Ahmed disappeared the day of the attacks.

Another U.S. official said the suicide pilot mailed a package of money and documents to a man in the United Arab Emirates a few days before the attacks. The official, also speaking on condition of anonymity, did not say whether the recipient was Ahmed.

Emirates officials have not said whether authorities are investigating the financial aspects of the attacks.

Last week, the Emirates' central bank ordered financial institutions to freeze any assets they find belonging to groups and individuals linked by the United States to Islamic militant Osama bin Laden, accused of masterminding the Sept. 11 attacks on New York and Washington.

The central bank in the Emirates already requires banks to monitor large cash transactions. The Emirates is reportedly preparing tougher legislation to control money laundering – for the most part linked to common criminal activity rather than terrorism. The legislation is expected to be introduced by the end of the year.

Large financial transfers are common through the Emirates, and most are legitimate – foreign workers throughout Asia, Europe, North America and the rest of the Middle East send their earnings home through banks and private dealers in the United Arab Emirates.

Socially and economically, the nation is one of the most liberal in the region. But the government keeps a tight rein on political activity.

Unlike conservative neighbor Saudi Arabia, which has struggled with political and religious dissent, and tribal, largely lawless Yemen, where arms are abundant, the United Arab Emirates is free of political violence.

But two days after the attacks, the Emirates announced that it had questioned people familiar with an Emirates man named Marwan Al-Shehhi – the same name as a man German police suspect was linked to the attacks.

Al-Shehhi reportedly is from the emirate of Ras al-Khaimah, which has close ties with Saudi Arabia and is known as a religiously conservative enclave.

It's not the first time the Emirates has come up in relation to a terrorist attack.

In the trial in the 1998 bombings of U.S. Embassies in Africa that killed 231 people, a witness said two members of bin Laden's al-Qaida network had accounts at an unidentified Emirates bank.

In the investigation into last year's bombing of the USS Cole warship in a harbor in neighboring Yemen, Jamal al-Badawi, one of the suspects jailed in Yemen in connection with the blast, told interrogators that he received telephone instructions for the bombing from a man in the United Arab Emirates. The Oct. 12 bombing killed 17 sailors and injured 39 others.

Al-Badawi said he met the man in Afghanistan during the Soviet war and identified him as Mohammed Omar al-Harazi, who remains at large.

Also, a Muslim militant who reportedly confessed this week that he was recruited by bin Laden to plot an attack on the U.S. Embassy in Paris was arrested in Dubai in July after returning from a trip to Afghanistan, French officials have said. Djamel Beghal, 35, a French-Algerian, was extradited to France Sunday from the Emirates.

APNP-10-02-01 1444CDT