Malaysian authorities face a challenging task in foiling cash transfers the Islamic State (IS) may be sending to its Southeast Asia arm, Katibah Nusantara.
Authorities are having a difficult time tracing these funds because of the underground black market money network in Southeast Asia and the emergence of the elusive hawala system.
“It would be a straight-forward case if the fund is being channeled via the conventional banks as we could track it through the Suspicious Transaction Record (STR) but it would be harder if it is being distributed through other systems out there,” Malaysian police counter terrorism official Ayub Khan Mydin Pitchay told BenarNews.
“They can even use the simplest method by using courier services and even the more complicated elusive ancient hawala money transfer system,” he added.
The hawala system, often used in the Middle East and North Africa, is a means of transferring money via a large network of brokers without money actually moving.
Local English daily The Sun recently reported that IS had allocated more than U.S. $73,000 (RM 292,000) for Katibah Nusantara to finance bombings and attacks at strategic locations in Southeast Asian countries including Malaysia.
Leaders of Katibah Nusantara are pushing their followers to stage attacks similar to the Jan. 14 attack in Jakarta that left eight dead, The Sun reported, citing sources in the intelligence arm of the Royal Malaysia Police, who said they got the information from their international counterparts.
Katibah Nusantara includes IS followers in Malay-speaking countries – mainly Malaysia, Singapore and Indonesia. Approximately 1,000 Southeast Asians had travelled to Syria and Iraq to join militant groups there by the end of 2015, according to the U.S. State Department.
No specific country
Ayub said intelligence received on the transfers were vague. He added that police have not confirmed whether the funding had made its way to any group in Malaysia.
“We were only informed that the fund is purportedly being channelled to Southeast Asia region, but it is not specific to which country,” he said.
Meanwhile, University Science of Malaysia (USM) Criminologist associate professor P. Sundramoorthy said tracking fund movements and distribution is complicated.
“I think it will not be an easy task for the authorities to identify and track down the funds distribution as they happened, particularly given the fact that they are not distributed in one, big lump sum.
“In some cases, these funds are being transferred in smaller amounts and even some are being channelled using conventional financial institutions,” he told BenarNews on Monday.
Malaysia has more than 400 currency or money changing premises, and many of them offer money transfer services.
The Malaysian Association of Money Services Business (MAMBS), which represents all licensees under the Money Services Business Act 2011, insists its members ask customers to produce identification documents for transactions greater than RM 3,000 (U.S. $769), according to a statement.
“This is for the purpose of complying with requirements pursuant to the Anti-Money Laundering and Anti-Terrorism Financing Act 2001, which requires licensees to identify and verify the customers performing money services transactions,” reads the undated press statement on its website.
Sundramoorthy said it is paramount that strict monitoring is carried out, along with intelligence sharing among law enforcement agencies, to curb the threat posed by terror organizations. (BenarNews)