Anti-Money Laundering Council (AMLC), Resolution No. 383 dated 28 June 2004

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SUPERVISION AND EXAMINATION SECTOR OFFICE OF THE DEPUTY GOVERNOR

CIRCULAR LETTER

To Ali Banks and Non-Bank Financial Institutions Under BsP Supervision

dated 28 June 2004, copy attached, request your cooperation to the call of the dated 15 June 2004 addressed to BSP Governor Rafae! B. Buenaventura, to freeze all assets of the following individual and entities which are suspected of supporting and financing terrorist activities: United States Government, thru the attached letter of the US Embassy, Manila The Anti-Money Laundering Council (AMLC), in its Resolution No. 383

1 ASSAD AHMAD BARAKAT ("Barakat")

BARAKAT, Assad BARAKAT, Jach Assad Ahmad BARAKAT Hajj As'ad Ahmad, Assad Ahmed Muhammad BARAKAT) (a.k.a. Assaad Ahmad BARAKAT, Assad Hassan

2 CASA APOLLO, Ciudad del Este, Paraguay

3. BARAKAT IMPORT EXPORT, Iquique, Chile

the AMLC reports of covered and suspicious transactions, if any, involving the above-named individual and business entities. Pursuant to said Resolution, you are hereby directed to submit directly to

For your strict compliance.

ALBerTO Deputy Governor REYES

Att.: A/S

2004

Pananalaping Matatag, Bansang Panatag 3

A. Mabini St., Malate 1004 Manila, Philippines Trunkline (632) 524-70-11 URL:www.bsp.gov.ph * e-mail: [email protected]

Anti-Money L aundering Council Bangko Sentral ng Pilipinas Complex Manila, Philippines

RESOLUTION NO. 383

Buenaventura, Govemor, Bangko Sentral ng Pilipinas, the Government of the United States, through its Embassy in Manila urges the Philippine government to which he has been linked, namely: check carefully for offices or financial assets and to subsequently freeze said assets belonging to ASSAD AMAD BARAKAT ("Barakat"), and two businesses to in a letter dated 15 June 2004 addressed to the Hon. Rafael B.

1 2 CASA APOLLO BARAKAT IMPORT EXPORT

from a personal computer in the store was recovered. He has ailegedly used member of the Hizballah, and is considered one of the most prominent and inftuential Hizballah officials in South America's tri-border area ("TBA"). He which were sent to Hizballah in Lebanon and iran. supports Hizhatlah military operations. In the execution of a search warrant at one of Barakat's businesses in Paraguay, a video of Hizballah military operations strong-arm tactics and coercive measures to annually raise large sums of money. information available to the U.S. Government indicates that BARAKAT is a

Hizballah's Foreign Reiations Department in Lebanon. has reportedly procured information about Arab community members that traveied to the United States or Israel and transmitted that information to for Hizballah activities and cells. Casa Apolio, an electronics wholesale store, was used as a cover for Hizballah fund-raising activities and as a way to transfer information to and from Hizballah operatives while the Barakat Import Export was used to raise money for Hizballah in Lebanon by mortgaging the company in order to borrow money from a bank in a frauduient scheme. Fuirther, Barakat The aforementioned businesses were used by Barakat as front companies

businesses are linked to Usama Bin-Laden, Al-Qaida orthe Taliban. forwarding these names to the UN 1267 Sanctions Committee for inclusion on its States designated and froze the assets of Barakat and the aforementioned two businesses to which he has been linked on June 10. They have no intention of consolidated asset freeze list, as it does not appear that Barakat or his Pursuant to U.S. Executive Order 13224 on terrorist financing, the United

territories from financing terrorism. As a charter member of the United Nations and as part of the international coalition against terrorism, the Philippines. (UNSCR) 1373 dated September 28, 2001 require UN member states to freeze terrorist assets without delay and to prohibit their nationals or person in their However, the provisions of United Nations Security Councit Resolution

reguired under the subject uNSC Resolution. through the Anti-Money Laundering Councii, must actively support the actions

Pursuant thereto, the Council uinanimously resolves, as foliows:

To provide the Supervising Authorities, namely: the Bangko Sentral Insurance Commission, with copy of the 15 June 2004 tetter from the United States; ng Pilipinas, the Securities and Exchange Commission, and the

2 To request said Supervising Authorities to circularize among ali covered institutions under their respective jurisdictions, copy of the subject 15 June 2004 letter from the United States; and

3} To require said Supervising Authorities to direct the covered manuals promulgated by the Supervising Authorities. involving ASSAD AMAD BARAKAT, and the two businesses to institutions under their respective jurisdictions to submit directiy to the Council reports of covered and suspicious transactions, if any. which he has been linked, namely: CASA APOLLO and BARAKAT) IMPORT EXPORT in accordance with Sections 7 and 9 of the AMLA, Rules 5.2,5.3 and 9.3 of the iRRs of the AMLA and other related or applicable rules, regulations, circuiars and operating

Y June 2004, Manila, Philippines.

RAFAEL.B.BUENAVENTURA (Governor, Bangko Sentral ng Pilipinas) Chairman

AnA

(Chairman, Securities and Exchange Commission) tilia r. Bautista Member (Commissioner, Insurance Commission) EdUARdO t. MALIniS Member

15:08 2004 15:40 FAX 338411 ECON 442.405

Embassy of the United States of Imeritn

Manila, Philippines June 15,2004

Mr. Rafael Buenaventura

Bangko Sentral ng Pilipinas Governor

Dear Govermor Buenaventura:

many different countries, incinding significant efforts by the Govornment of the Republic of the Philippines. The provisiona of UN Security Council Resolution 1373 requiring member states to community. Together, we are putting in piace the necessary institutional and regulatory. infrasmicture to bar access to the financial system of terrorist and thoir financiers. frceze terrorist assets without delay and to prohibit their nationals or pcrsons in their territories from financing terrorism reflect this shared commitment on the part of the internationa! The international coalition to stem terrorism financing has been a joint effort involving

biocking the assets of 27 persons and entities. E. O. 13224 providos the Secretary of State the On September 23, 2001 President George Bush issued Executive Order (E.O.) 13224

Committing. acts of terrorism that threaten the security of US Nationals or the national security. anthority to designete foreign persons who have comrnitted, or pose a sigmificant risk of foreign poticy or economy of the United States. It also provides the Treasury Department with the amiority, among other things, to designate persons who lond snppott to designated terrorists. A designation by either State or Treasury Departments couid result in the blocking of their assets in the U.S. or heki by U.S. persons, wherever located.

designated and froze the assets of Assad Arnad Barakat, and two businesses to which he has been Under U.S. Executive Order 13224 on terrorist financing, on June 10, the United States

Taliban. However, the provistons of UNSCR 1373 require UN member states to freeze terrorist linked; Casa Apollo and Barakat Import Export. We do not contemplate forwarding those names lo the UN 1267 Sanctions Committee for inclusion on its consolidated asset freeze list, as it does not appear that Barakat or his husinesses are linked to Usama Bin-Laden, Ai-Qaida or the assets without delay and to prohibit their nationals or persons in their territories from financing terrorism. We are enctosing a backgroumd paper that ontlines the activities that stpport our designation.

snrengthening the necessary instinutional and regnlatory infrattricture to bar access to the belonging to these entities/individuals in your country. Together, we are continually tfinancial system of terrorist and their financiers. The Embassy of the United States of America effort involving many countries. We urge you to check carefilly for offices or financial assets As noted above, the international coalition to combat terrorist financing has becn a joint

15.082)14 Y5: A1 FAX 338412 ECON Q{H}, (It}

avails itself of this opportunity to offer the Central Bank of the Philippines the assurances of its

highest consideration.

Sincerely,

A/Econornic Counselor Robert Kemp

C.C: AML DOF DOJ POL - Dan Ricci

:

15:06'2004 15:41 F4X 338413 ECON Q n ues

TERRORIST NAMES DESIGNATED UNDER E.O. 13224 (LIST 58)

NAME OF INDITDUALA

a.k.a.s: Assaad Ahmad BARAKAT; Assad Hassan BARAKAT; Assad AssadAhmad.BARAKAT

BARAKAT; Jach Assad Ahmad BARAKAT; Hajj As'ad Ahmad; Assad Ahmed Muhammad BARAKAT DOB: March 25,1967 POB: Lebanon

Hrazllian Residences (as of January 2002}: Rua Taroba 1005 Beatriz Mendez Building Foz sio Iguacu, Brazil

Lote 682 Foz do Iguac, Brazil Rua Rio Branco Quadra 13

Rua Xavier Da Silva S35 Foz do Iguacu,Brazil Edificio Martin Terro Apartment 301

Brazilian Residences (as of 2001): 290,Rna Silva Jardim Foz do Iguacu, Brazil

Chitean Residences:

Iquiqne, Chile "Arrecife" Apartment Building

Iqnique, Chile Apartment {l! Panorana Building

Paraguayan Residence:

Phone: 061-514-932 Piribebuy Y A. Jara Ciudad del Eate, Paraguay

15:03 2004 15:11 FX 338113 ECON Qem i

NAME OF BUSINESSES:

Casa Apallo Galeria Page Cindad del Este, Paraguay

2. Barakat Import Export Ltda Iqnique, Chile Tax Identificatiou Number: AABA 670850 Y

15:06 200 15: 41 FAX 3384127 EC ON LU

DesignationofAssadAhmad BABAKATiand oftwa Businesses: Casa Apollaand Harakat Imnart ExnortLda

a.k.a.s: Assaad Ahmad BARAKAT; Assad Hassan BARAKAT; Assad Assad Ahmad HARAKAT

BARAKAT; Jach Assad Ahmad BARAKAT; Hajj As'ad Ahmad;Assad Ahmed Muhammad BARAKAT

LINKS TO IHZBALLAH:

Assad Abniad BARAKAT was identified as a significant Isiamic extremist in South America's tri-border area ("THA") as early as 1997. Detained in June 2002 by Brazil at the request of Paraguay on suspicion of tax evasion and criminal association, he was extradited to Peraguay in November 2003. In May 2004, he was convicted and sentonced to six and a half years in prison. minns two years for time already served, in Paraguay for tax evasion.

According to information available to the U.S. Government, BARAKAT is a member of Hizhallah, and is considered one of the most prominent and influential Hizballah officials in the TBA.. He is the princinal liaison in the TBA for Hizballah's Secretary General Shaykh Hasan Nasrallah. BARAKAT has long served as a treasurer for tho group and has carricd contributions for Hizballah on several occasions to Lebanon. BARAKAT is also reportedly the deputy to a Hizballal financial director, Ali Kazan. According to information available to the U.s. Government, as of late 200i, BARAKAT reportedly was traveling to Lebanon and Iran annually, meeting with both Hizballah Secretary Goneral Hassan Nasrallah and Spiritual Leader Hussein Fadlallah.

In addition to the reported contacts with Hizbaltah leadership, BARAKAT hag worked closely with numerous TBA Istamic extremists and suspected Hizballah associates. According to the information available io the U.S.Government, BARAKAT's personal secretary, Mazen Saleh. was reportedly a Hizballah leader in the TBA and was, according to multiple press sources. arrested on Octoher 3. 2001 at BARAKAT's store Casa Apollo in Ciudad det Este, Paraguay. B ARAKAT's executive secretary and/or close associate is Sobhi Mahmoud Fayad, a known Hizhatiai nenber and a weapons/explosives expert, according to information available to the U.S. Government. Fayad was a high-ranking Hizballah official in Lebanon in the 1980s and continues to be a Hizballah official in the TBA. He was arrested in 1999 for surveiilance of the U.S. embassy in Asuncion, and in Novermber of 2002, Fayad was sentenced to six and a half Years fot tax evasion.

According to infonnation available to the U.S. Government, BARAKAT was, as of March 2001, the deputy financial director of the Husaniyya "Iman At-Khomeini" mosque in Foz Do Iguacu, Brazil. Additionally, BARAKAT's arrest in June 2002 prompted a proninent member of the Husaniyya Mosuue to prohibit anyone who is not a member of Hizballah from atiending services at the mosque. Hizballah leaders in Lebanon recalled Islamic clerics Shaykli Mohsen Bilal Wehhi and Shaykh Mounir Al-Fadet back to Itbanon to discuss the arrest. Wehbi has been identified as BARAKAT's protector and is the Imam of the Husayniyya Mosquc.

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AC:TIVYTIES ON BEHALF OF HZBALLAH :

Ac:ording to information available to the U.S. Government, BARAKAT also supports Hizballah military operations. During the execution of a scarch warrant at one of BARAKAT's Ciudad del Este:, Paraguay businesses, Paraguayan authorities recovered video of Hizballah mititary operations from a personal computer in the atore. The footago depicted the detonation of explosives, soms of which show peopie dying from these explosions. Another file inchnded Hizballall military orders for oach town and villaga in southern Lebanon, according to infortiation availahle to the U.S. government.

According to information available to the U.S. Government. BARAK AT haa used strong-arm tactics and coercive measures to annually raise large sums of money, which were sent to Hizballah in Lebanon and Iran. According to information available to the U.S. Government. BAR.KAT threatened TBA shopkeepers, who are sympathetic to Hizballah's cause, with having family members in Lebanon placed on a "H{zballah blacklist" if the shopkeepers did not pay their quota to Hizhallah via BARAKAT on a regular basis.

Accord iug to information available to the U.S. Government, BARAKAT is involved in a Countet feiting ring that distributes fake U.S. dollars to generate cash to fuind Hizballah Onerations. As of earty 2001, BAR AKAT was one of two individuals reportedly in charge of distriburion and sale of the counterfeit currency in the T'BA..

In addition to operating a counterfeiting network, BARAKAT also allegedly used wholesale import-export businesses as front companies for Hizballah activities and cells, according to information available to the U.S. Government. BARAKAT used the ciectronics wholesale store Casa Apollo as a cover for Hizballah fund-raising activities and as a way to transfer inforination to and from Hizballah operatives. BARAKAT also used his company BARAKAT Import Export tc. raise mioney for Hizballah in Lebanon by mortgaging the company in order to borrow money frorn a bank in a fraudulent scheme. Saltex Trading is an additional company owned in part by B.ARAKAT, and is betioved to be used as a front company for funding Hizballah.

According to infonmation available. to the U.S. Government, BARAKAT rolayed informtation to and fiom Hizballeh leaders in Lebanon. As of mid-2001. BARAKAT sought aensitive information about the activities of Arabs in the TBA on tha request of Hizballah leaders in Lebanon, according to information available to the U.S. Government. In particular, BARAKAT procured information about Arab community members that traveled to the United States or Iarael, He transmitted that information to Hizballah's Foreign Relations Department in Lebanon.

According to Govermment of Paraguay, evidence uncovered during the raids of BARAKAT's businesses indicates that BARAKAT has been recruiting Hizballah fighters from the TBA. According to a media report, assertions that BARAKAT has recruited Hizbaliah operatives was based in part on the content and volume of Hizballah informational material recovered during the raids on BARAKAT's businesses. The material included disks, videotapes and CD-ROMs that depicted speeches and terrorist training-according to the media source. The official translation obtained by the media source stated that the material inchded videotapes

15-63 2004 15:12 FAI 3384127 ECON b+itw', w

badies against the enemies." of Shaykh Hassan Nacrallah, Hizballah's Secretary General, asking an audience to "explode your

B ARAKAT has also regularly hosted and attended meetings of senior Hizballah TBA leaders. According to information availabie to the U.S. Government, BARAKAT attended a meeting of oust Yasir Arafat due to his decision to agree to a cease-fire. TBA Hizballah members in the fall of 2000, in Foz do Iguacu,Brazil in which TBA Hizballah members discussed Hizballah intentions to identify, locata and assassinate foriner memhers of the Army of South Lehanon (ASL) and Israelis. The group also discussed a possible effort to