Why does it take a War to Uncover Illicit Money Flows?

And more importantly, what we can do to speed up sanctions for terrorist financing or criminal sanctions for money launderers or tax evaders? That's the point of this article.

I guess that most average people can ascertain a friendly nation from an unfriendly nation without having to be glued to the news 24/7.

Or even a nation that has, let's say, less than effective money laundering and terrorist financing controls.

And yet Government's use of international diplomacy always takes precedence over what sometimes is actual evidence of bad deeds on an international level. Be it Terrorism, cyber crime or actual criminal offences. Why is this? Is it just to try to avoid conflict? If globally we are ever to reach a point where we have even a modicum of control over the ebb and flow of illicit finance or criminal acts we need to act faster. Much faster.

Criminal acts by Nations states happen all the time.

Like Russia killing people in the UK. Or Saudi Arabia killing people in Turkey.

The old saying, 'follow the money', is still relevant today, albeit much harder as it traverses borders at the speed of light. There is always a trail back to someone. Not always the right person if straw men or shell companies are deployed but with the tightening regulations on Ultimate Beneficial Ownership we are getting closer to being able to identify those professional money launderers cleaning the kleptocratic cash in the world.

Case in point:

Abdelbasit?Hamza a Sudanese businessman once convicted for corruption and sentenced to ten years, is in the news accused of funding Hamas. He has been sanctioned by the US for his alleged funding of Hamas less than a week after the attacks on October 7th 2023.

The question is why then and not earlier? And why not by the EU where he has business interests. Clearly there are long historic arguments on both sides of the Palestinian and Isreali conflict but a man who is connected as Hamza is surely cannot be allowed to operate in the financial markets with a history as broad as his.

Here is the history of Abdelbasit?Hamza.

Hamza's business dealings going back 20 years link him to Osama Bin Laden and link him to Cyprus, Spain, Egypt and Sudan. He was arrested in 2019 in Sudan and was jailed for handling money for Hamas. Yet he wasn't sanctioned for this until after the attack on Israel on October the 7th 2023. Why?

It is suspected Hamza has assets of over $2 billion. The ICIJ (International Consortiium for Investigative Journalism) uncovered Hamza's European business network, part of a network of global assets that include a gold mine.

It seems while Israel clearly mis-read the threat of attack on the 7th October, neither they, the US or the EU were adequately prepared with regard to the money flows that support terrorist financing globally. What other reason can there be when the speed of sanction AFTER the attack was so swift. They surely had the intelligence then, ably provied by the ICIJ yet failed to act on it.

Hamza, who was freed from prison after a 2021 military coup in Sudan ousted the post-Bashir government, denies financing Hamas in any way. He has also denied any relationship with Osama Bin Laden. He claims he was held as a political prisoner in Sudan and was freed because he has innocent.

How Hamza made his money

Documents from the “Cyprus Confidential” leak show Hamza is listed as owning a stake in Matz Holdings, a Cypriot firm founded in 2005. Matz Holdings holds rights to exploit two gold mines in Egypt.

Hamza sold a large proportion of his assets in Matz Holdings the day before the military coup of Sudan’s former dictator Omar Al-Bashir but still has a ten percent stake in the company. His stake is owned through the Zawaya Group for Development and Investment, a Sudan based company also sanctioned by the US.

Hamza also owns a Spanish real estate company, also now sanctioned by the US.

The US accuse Hamza of ties to Osama Bin Laden through the two knowing each other when Bin Laden lived in Sudan. They also had business interests together around that time. A business partner of Hamza, Swiss National Jakob Bliggenstorfer, was contacted by a Swiss media company for comment and said it is a case of mistaken identity and that Hamza hasn't done anything.

In November the UK also sanctioned Hamza, but to date the EU has taken no action. Why, when they try to appear 'hot' on money laundering? Action speaks louder than statutes.

Shadow finance

The attack on the 7th October has raised questions around western agencies about who knew what and when surrounding the financing of Hamas. Israel itself failed in its security posture and now it also appears on the financing of terrorism front with people like Hamza able to operate in the financial sector with little to no scrutiny. Of course, it is always easy to be the 'hindsight' police but surely with the world as dangerous as it is we can't put public lives in danger at the alter of 'timing' or waiting for an atrocity.

Hamas' finance networks remain a contentious issue for Israel. An ex-IDF intelligence officer, who led Mossad’s economic unit, explained Hamza as one of a group of shadow finance men managing money for Hamas.

“In recent years Hamza has become a central figure in Hamas’ investment portfolio.” responsible for “dozens of companies – seemingly legitimate” whose revenue is “for the purpose of financing the movement’s operations, including its military activity,” the officer commented and reported in Shromrim an investigative platform.

Mohamed Al-Faki Suleiman, the former acting head of Sudan's civilian anti-corruption committee told CNN, “We realised quickly that much of Abdelbasit’s financial network was large and complex, Investments in hotels, oil, contracting services, marketing and acquiring illegally, millions of acres of Sudanese land.”

Despite Sudan authorities notifying western nations to seize Hamza's assets they remained unseized in the US and EU. That was a full four years before the attack on Israel.

Media reports dating back more than 20 years have linked Hamza to extremists. A 1998 Wall Street Journal reported Hamza managing a road project for a Bin Laden company during the al-Qaida leader’s years of exile in Sudan, and that Hamza had encouraged Bin Laden to invest in a weapons facility.

When Hamza was arrested he sold the majority of his shares to Matz Dungash, another Cypriot firm. Matz Dungash acquired over 80% of the company’s shares by April 2019. Matz Dungash’s director is an Egyptian businessman, Hesham ElHazek.

Hamza told ICIJ and Shomrim in an email that ElHazek owns Matz Dungash and its Cayman Islands parent company. And so to finish the article we have the Cayman Islands, Cyprus, Swiss bank accounts and businessmen and overly complex ownership structures all involved in this sorry saga. Need I say more?