Identifier
Created
Classification
Origin
02KATHMANDU2254
2002-11-26 12:02:00
SECRET
Embassy Kathmandu
Cable title:  

NEPAL: FUNDING TERRORISM, MAOISTS TAP OVERSEAS

Tags:  EFIN ELAB NP PTER 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
S E C R E T SECTION 01 OF 02 KATHMANDU 002254 

SIPDIS

SECSTATE WASHDC FOR EB/ESC/ESP
LONDON FOR POL/REIDEL
TREASURY FOR OFAC DIRECTOR/RNEWCOMB AND TREASURY TASK FORCE
ON TERRORIST FINANCING
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN

E.O. 12958: DECL: 11/22/2012
TAGS: EFIN ELAB NP PTER
SUBJECT: NEPAL: FUNDING TERRORISM, MAOISTS TAP OVERSEAS
REMITTANCES

Classified By: Ambassador Michael E. Malinowski for 1.5(b & d).

Summary
-------

S E C R E T SECTION 01 OF 02 KATHMANDU 002254

SIPDIS

SECSTATE WASHDC FOR EB/ESC/ESP
LONDON FOR POL/REIDEL
TREASURY FOR OFAC DIRECTOR/RNEWCOMB AND TREASURY TASK FORCE
ON TERRORIST FINANCING
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN

E.O. 12958: DECL: 11/22/2012
TAGS: EFIN ELAB NP PTER
SUBJECT: NEPAL: FUNDING TERRORISM, MAOISTS TAP OVERSEAS
REMITTANCES

Classified By: Ambassador Michael E. Malinowski for 1.5(b & d).

Summary
--------------


1. (S) According to a prominent Kathmandu banker and
long-time Embassy contact, Maoists are tapping into
remittances from Nepalese employed abroad. Maoist tactics
include extorting remittances from family members, recruiting
members working abroad to send funds to their revolutionary
cause, and serving as moneylender to finance the initial
costs of foreign employment. Sources estimate that Maoists
take at least $500,000 USD per month from Malaysia, Saudi
Arabia, Qatar, and the United Arab Emirates, and, perhaps
other countries with significant numbers of Nepalese
expatriate workers.

Maoists Prey on Expatriate Labor
--------------


2. (S) According to Prithivi Pande (PROTECT),Chief Executive
Director of Nepal Investment Bank LTD, Maoists are tapping
into remittances from Nepalese employed abroad. In an
interview with EconOff, Mr. Pande described the bank's
efforts to garner a portion of the remittance payment market
by providing services for the transfer of funds and financing
the initial costs of foreign employment. The global war on
terrorism has disrupted parts of the hundi and hawala fund
transfer system and opened the remittance services market to
established financial institutions. It was through Nepal
Investment Bank's marketing efforts that the bankers became
aware of Maoist access to remittances.

Tactics in Nepal
--------------


3. (S) Manpower agencies working in Malaysia told Pande that
the Maoists provide financing to foreign employees to cover
the initial expenses for foreign employment. An employee's
expenses include round-trip airfare, visa fees, and manpower
agency fees averaging $1,285 USD (100,000 Nepali Rupees) for
work in Malaysia and the Gulf. Desperate laborers
traditionally borrowed from local moneylenders at rates of
30-35 percent, which were repaid by family members receiving
the remittance. The sources were unable to estimate the
extent of the problem but added that families receiving
remittances from abroad are targets for Maoist revenue
collection. (Comment: The Nepali press has reported this as
well.)

Tactics Abroad
--------------


4. (S) While marketing services in Saudi Arabia, Qatar, and
the United Arab Emirates, Rajesh Khanal (PROTECT),
Relationship Manager for the Bank, heard from Nepalese
manpower companies that Maoists were soliciting funds and
recruiting members for their revolutionary cause. Mr. Khanal
traveled to the Saudi city of Dammam (4-5 hours from Riyadh)
on November 8 to gather in a city square with other
Nepalese--a Nepalese expatriate tradition that takes place
every Friday. While in the public square, he witnessed
Maoists openly recruiting members and soliciting funds in
Nepali.


5. (S) The manpower agencies in contact with the Nepal
Investment Bank believe up that to 20 percent of expatriate
Nepalese in the Gulf remit funds to the Maoists directly. The
bankers estimate that nearly 200,000 Nepalis work in Saudi
Arabia and are able to return $100 USD per month after
expenses. If extrapolated to the entire community of 300,000
Nepalese believed to work in the Gulf, the bankers estimate
Maoists could receive at least $500,000 USD per month in
direct funding. (Comment: All figures provided are soft and
based on anectdotal evidence. However, should the upper
estimates of Maoist infiltration, numbers of Nepalese present
in the region, and estimates of monthly per capita
remittances prove valid; the Maoists could net USD $6 million
per month.)


6. (S) EconOff will conduct follow-on interviews with
Nepalese manpower agencies to confirm the banker's reports,
try to determine the extent of Maoist penetration, and
identify financial links for asset freeze. The Embassy would
welcome any insights into these terrorist funding networks
that addressee posts may be able to provide.
MALINOWSKI