Country Reports on Terrorism 2006
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Country Reports on Terrorism -Report Home Page Released by the Office of the Coordinator for Counterterrorism April 30, 2007 Table of Contents Chapter 1. Strategic Assessment Chapter 2. Country Reports: Africa Overview Trans-Sahara Counterterrorism Partnership The African Union Botswana Burundi Comoros Djibouti Ethiopia Kenya Liberia Madagascar Mali Mauritania Nigeria Rwanda Senegal Sierra Leone Somalia South Africa Tanzania Uganda Zimbabwe Chapter 2. Country Reports: East Asia and Pacific Overview Australia Burma Cambodia China o Hong Kong o Macau Indonesia Japan Republic of Korea Laos Malaysia Mongolia New Zealand Philippines Singapore Taiwan Thailand Chapter 2. Country Reports: Europe and Eurasia Overview Albania Andorra Armenia Austria Azerbaijan Belgium Bosnia and Herzegovina Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Georgia Germany Greece Hungary Iceland Ireland Italy Latvia Lithuania Macedonia Malta Moldova Montenegro The Netherlands Norway Poland Portugal Romania Russia Serbia o Kosovo Slovakia Slovenia Spain Sweden Switzerland Turkey United Kingdom o Northern Ireland Chapter 2. Country Reports: Middle East and North Africa Overview The Summer War Algeria Bahrain Egypt Iraq Israel, West Bank, and Gaza Jordan Kuwait Lebanon Libya Morocco Oman Qatar Saudi Arabia Tunisia United Arab Emirates Yemen Chapter 2. Country Reports: South and Central Asia Overview Afghanistan Bangladesh India Kazakhstan Kyrgyzstan Nepal Pakistan Sri Lanka Tajikistan Turkmenistan Uzbekistan Chapter 2. Country Reports: Western Hemisphere Overview Inter-American Committee Against Terrorism (CICTE) Tri-Border Area Argentina Bolivia Brazil Canada Chile Colombia Ecuador El Salvador Guatemala Mexico Nicaragua Panama Paraguay Peru Suriname Trinidad and Tobago Uruguay Venezuela Chapter 3. State Sponsors of Terrorism Overview Cuba Iran North Korea Sudan Syria Chapter 4. The Global Challenge of WMD Terrorism Chapter 5. Terrorist Safe Havens (7120 Report) (Update of Information Originally Reported Under Section 7120(b) of the Intelligence Reform and Terrorist Prevention Act) 1. Terrorist Safe Havens: Strategies, Tactics, Tools for Disrupting or Eliminating Safe Havens 2. Support for Pakistan 3. Collaboration with Saudi Arabia 4. Struggle of Ideas in the Islamic World 5. Outreach through Foreign Broadcast Media 6. Visas for Participants in United States Programs 7. Basic Education in Muslim Countries 8. Economic Reform Chapter 6. Terrorist Organizations Abu Nidal Organization (ANO) Abu Sayyaf Group (ASG) Al-Aqsa Martyrs Brigade Ansar al-Sunna (AS) Armed Islamic Group (GIA) Asbat al-Ansar Aum Shinrikyo (Aum) Basque Fatherland and Liberty (ETA) Communist Party of Philippines/New People's Army (CPP/NPA) Continuity Irish Republican Army (CIRA) Gama'a al-Islamiyya (IG) HAMAS Harakat ul-Mujahedin (HUM) Hizballah Islamic Jihad Union (IJU) Islamic Movement of Uzbekistan (IMU) Jaish-e-Mohammed (JEM) Jemaah Islamiya Organization (JI) Al-Jihad (AJ) Kahane Chai (Kach) Kongra-Gel (KGK/PKK) Lashkar e-Tayyiba (LT) Lashkar i Jhangvi (LJ) Liberation Tigers of Tamil Eelam (LTTE) Libyan Islamic Fighting Group (LIFG) Moroccan Islamic Combatant Group (GICM) Mujahedin-e Khalq Organization (MEK) National Liberation Army (ELN) Palestine Liberation Front (PLF) Palestinian Islamic Jihad (PIJ) Popular Front for the Liberation of Palestine (PFLP) Popular Front for the Liberation of Palestine-General Command (PFLP-GC) Al-Qaida (AQ) Al-Qaida in Iraq (AQI) Al-Qaida in the Islamic Maghreb (AQIM/GSPC) [Formerly Salafist Group for Preaching and Combat] Real IRA (RIRA) Revolutionary Armed Forces of Colombia (FARC) Revolutionary Nuclei (RN) Revolutionary Organization 17 November Revolutionary People's Liberation Party/Front (DHKP/C) Shining Path (SL) United Self-Defense Forces of Colombia (AUC) Other Groups of Concern Al-Badhr Mujahedin (al-Badr) Al-Ittihad al-Islami (AIAI) Alex Boncayao Brigade (ABB) Anti-Imperialist Territorial Nuclei (NTA) Cambodian Freedom Fighters (CFF) Communist Party of India (Maoist) Communist Party of Nepal (Maoist)/United People's Front Democratic Forces for the Liberation of Rwanda (FDLR) East Turkistan Islamic Movement (ETIM) First of October Antifascist Resistance Group (GRAPO) Harakat ul-Jihad-I-Islami (HUJI) Harakat ul-Jihad-I-Islami/Bangladesh (HUJI-B) Hizb-I Islami Gulbuddin (HIG) Hizbul-Mujahedin (HM) Irish National Liberation Army (INLA) Irish Republican Army (IRA) Islamic Army of Aden (IAA) Islamic Great East Raiders-Front (IBDA-C) Islamic International Peacekeeping Brigade (IIPB) Jamaatul-Mujahedin Bangladesh (JMB) Jamiat ul-Mujahedin (JUM) Japanese Red Army (JRA) Kumpulan Mujahedin Malaysia (KMM) Lord's Resistance Army (LRA) Loyalist Volunteer Force (LVF) New Red Brigades/Communist Combatant Party (BR/PCC) People Against Gangsterism and Drugs (PAGAD) Rajah Solaiman Movement (RSM) Red Hand Defenders (RHD) Revolutionary Proletarian Initiative Nuclei (NIPR) Revolutionary Struggle (RS) Riyadus-Salikhin Reconnaissance and Sabotage Battalion of Chechen Martyrs (RSRSBCM) Sipah-I-Sahaba/Pakistan (SSP) Special Purpose Islamic Regiment (SPIR) Al-Tawhid w'al Jihad (TWJ) Tenrik Mifaz-E-Shariah Mohammadi (TNSM) Tunisian Combatant Group (TCG) Tupac Amaru Revolutionary Movement (MRTA) Turkish Hizballah Ulster Defense Association/Ulster Freedom Fighters (UDA/UFF) Ulster Volunteer Force (UVF) United Liberation Front of Assam (ULFA) Chapter 7: Legislative Requirements And Key Terms National Counterterrorism Center: Annex of Statistical Information International Conventions and Protocols on Terrorism Report Home Page
Chapter 3 -- State Sponsors of Terrorism Overview State sponsors of terrorism provide critical support to non-state terrorist groups. Without state sponsors, terrorist groups would have much more difficulty obtaining the funds, weapons, materials, and secure areas they require to plan and conduct operations. Most worrisome is that some of these countries also have the capability to manufacture weapons of mass destruction (WMD) and other destabilizing technologies that could get into the hands of terrorists. The United States will continue to insist that these countries end the support they give to terrorist groups. As a result of the historic decisions taken by Libya's leadership in 2003 to renounce terrorism and to abandon its WMD programs, the United States rescinded Libya's designation as a state sponsors of terrorism on June 30. Since pledging to renounce terrorism in 2003, Libya has cooperated closely with the United States and the international community on counterterrorism efforts. Sudan continued to take significant steps to cooperate in the War on Terror. Cuba, Iran, and Syria, however, have not renounced terrorism or made efforts to act against Foreign Terrorist Organizations. Iran and Syria routinely provided safe haven, substantial resources, and guidance to terrorist organizations. Venezuela was certified by the Secretary of State as "not fully cooperating" with U.S. counterterrorism efforts. The designation, included in Section 40A of the Arms Export Control Act, was based on a review of Venezuela's overall efforts to fight terrorism. Effective October 1, the decision imposed sanctions on all commercial arms sales and transfers. It remains in effect until September 30, 2007, when it may be renewed by a determination by the Secretary. (Venezuela is the only nation certified as "not fully cooperating" that is not a state sponsor of terrorism.) State Sponsor: Implications Designating countries that repeatedly provide support for acts of international terrorism as state sponsors of terrorism imposes four main sets of U.S. Government sanctions: A ban on arms-related exports and sales. Controls over exports of dual-use items, requiring 30-day Congressional notification for goods or services that could significantly enhance the terrorist-list country's military capability or ability to support terrorism. Prohibitions on economic assistance. Imposition of miscellaneous financial and other restrictions, including: Requiring the United States to oppose loans by the World Bank and other international financial institutions; Lifting diplomatic immunity to allow families of terrorist victims to file civil lawsuits in U.S. courts; Denying companies and individuals tax credits for income earned in terrorist-listed countries; Denial of duty-free treatment of goods exported to the United States; Authority to prohibit any U.S. citizen from engaging in a financial transaction with a terrorist-list government without a Treasury Department license; and Prohibition of Defense Department contracts above $100,000 with companies controlled by terrorist-list states. Cuba Cuba continued to publicly oppose the U.S.-led Coalition prosecuting the War on Terror. To U.S. knowledge, Cuba did not attempt to track, block, or seize terrorist assets, although the authority to do so is contained in Cuba's Law 93 against Acts of Terrorism, as well as Instruction 19 of the Superintendent of the Cuban Central Bank. No new counterterrorism laws were enacted, nor were any executive orders or regulations issued in this regard. To date, the Cuban government had not undertaken any counterterrorism efforts in international and regional fora or taken action against any designated Foreign Terrorist Organizations. The Government of Cuba provided safe haven to members of ETA, FARC, and the ELN, and maintained close relationships with other state sponsors of terrorism such as Iran. The Cuba-Iran Joint Commission met in Havana in January. The Cuban government continued to permit U.S. fugitives to live legally in Cuba and is unlikely to satisfy U.S. extradition requests for terrorists harbored in the country. The United States periodically requested that the government return wanted fugitives1, and Cuba continued to be non-responsive. The Cuban regime publicly demanded the return to Cuba of five of its agents convicted of espionage in the United States. The five were variously accused of being foreign intelligence agents and infiltrating U.S. military facilities, but the Cuban government continued to refer to these individuals as heroes in the fight against terrorism. One was accused of conspiracy to murder for his role in the Cuban Air Force's shooting down of two small civilian planes. Cuba has stated, however, that it will no longer provide safe haven to new U.S. fugitives who may enter Cuba.2 Although Cuba did not extradite suspected terrorists during the year, the government demanded that the United States surrender Luis Posada Carriles, whom it accused of plotting to kill Castro and bombing a Cubana Airlines plane in 1976, which resulted in more than 70 deaths. Posada Carriles remained in U.S. custody. Cuba also asked the United States to return three Cuban-Americans implicated in the same cases. Iran Iran remained the most active state sponsor of terrorism. Its Islamic Revolutionary Guard Corps (IRGC) and Ministry of Intelligence and Security (MOIS) were directly involved in the planning and support of terrorist acts and continued to exhort a variety of groups, especially Palestinian groups with leadership cadres in Syria and Lebanese Hizballah, to use terrorism in pursuit of their goals. Iran maintained a high-profile role in encouraging anti-Israeli terrorist activity, rhetorically, operationally, and financially. Supreme Leader Khamenei and President Ahmadi-Nejad praised Palestinian terrorist operations, and Iran provided Lebanese Hizballah and Palestinian terrorist groups - notably HAMAS, Palestinian Islamic Jihad, the al-Aqsa Martyrs Brigades, and the Popular Front for the Liberation of Palestine-General Command - with extensive funding, training, and weapons. Iran continued to play a destabilizing role in Iraq, which appeared to be inconsistent with its stated objectives regarding stability in Iraq. Iran provided guidance and training to select Iraqi Shia political groups, and weapons and training to Shia militant groups to enable anti-Coalition attacks. Iranian government forces have been responsible for at least some of the increasing lethality of anti-Coalition attacks by providing Shia militants with the capability to build IEDs with explosively formed projectiles similar to those developed by Iran and Lebanese Hizballah. The Iranian Revolutionary Guard was linked to armor-piercing explosives that resulted in the deaths of Coalition Forces. The Revolutionary Guard, along with Lebanese Hizballah, implemented training programs for Iraqi militants in the construction and use of sophisticated IED technology. These individuals then passed on this training to additional militants in Iraq. Iran remained unwilling to bring to justice senior AQ members it detained in 2003, and it has refused to publicly identify these senior members in its custody. Iran has repeatedly resisted numerous calls to transfer custody of its AQ detainees to their countries of origin or third countries for interrogation or trial. Iran also continued to fail to control the activities of some al-Qaida members who fled to Iran following the fall of the Taliban regime in Afghanistan. North Korea The Democratic People's Republic of Korea (DPRK) was not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987. The DPRK continued to harbor four Japanese Red Army members who participated in a jet hijacking in 1970. The Japanese government continued to seek a full accounting of the fate of the 12 Japanese nationals believed to have been abducted by DPRK state entities; five such abductees have been repatriated to Japan since 2002. In the February 13, 2007 Initial Actions Agreement, the United States agreed to "begin the process of removing the designation of the DPRK as a state-sponsor of terrorism." Sudan The Sudanese government was a strong partner in the War on Terror and aggressively pursued terrorist operations directly involving threats to U.S. interests and personnel in Sudan. In recent months, Usama Bin Laden and other senior al-Qaida leaders have called for the expansion of AQ's presence in Sudan in response to possible deployment of UN peacekeepers in Darfur. This has led to speculation that some individuals with varying degrees of association with AQ have taken steps to establish an operational network in Darfur, but there were no indications that AQ affiliated extremists were active there. With the exception of HAMAS, the Sudanese government did not openly support the presence of extremist elements in Sudan. The Sudanese government took steps to limit the activities of these organizations. For example, Sudanese officials welcomed HAMAS members as representatives of the Palestinian Authority (PA), but limited their activities to fundraising. The Sudanese government also worked to disrupt foreign fighters from using Sudan as a logistics base and transit point for Jihadists going to Iraq. There was some evidence to suggest that individuals who were active participants in the Iraqi insurgency have returned to Sudan and were in a position to use their expertise to conduct attacks within Sudan or to pass on their knowledge. The Lords Resistance Army (LRA) continued to be a threat to Uganda, the Democratic Republic of the Congo (DRC), and Southern Sudan. The Government of Southern Sudan worked to mediate peace between the LRA and the Government of Uganda and sought to curb LRA raids, but achieved little tangible progress. Although LRA attacks declined significantly, renewed violence remains a threat. Formal negotiations commenced in Juba in July 2006. The LRA continued to stall the talks, however, most recently with demands for a change of venue and a halt to all Ugandan People's Defense Forces activity in southern Sudan. Both parties signed a Cessation of Hostilities agreement in August 2006 identifying areas where the LRA could assemble for the negotiations without fear of being attacked by the Ugandan People's Defense Forces. Syria The Syrian government continued to provide political and material support to Hizballah and political support to Palestinian terrorist groups. Palestinian Islamic Jihad (PIJ), HAMAS, the Popular Front for the Liberation of Palestine (PLFP), and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), among others, base their external leadership in Damascus. The Syrian government insisted that the Damascus-based groups undertake only political and informational activities, but Palestinian groups with leaders in Syria have claimed responsibility for anti-Israeli terrorist acts. Syria's public support for the Palestinian groups varied, depending on its national interests and international pressure. In April, visiting PA Foreign Minister Zahar (HAMAS) met with Damascus-based Palestinian leaders and attended a rally at the Palestinian Yarmouk refugee camp alongside HAMAS Political Bureau Chief Khalid Mish'al and representatives of other terrorist groups and Hizballah. In July, Mish'al held a highly publicized press conference under tight security at a Damascus hotel, expressing gratitude for Syria's unconditional support to the Palestinian cause. The Government of Syria has not been implicated directly in an act of terrorism since 1986, although preliminary findings of a UN investigation into the February 2005 assassination of former Lebanese Prime Minister Rafik Hariri indicated a strong likelihood of official Syrian involvement. That investigation remains in process. On September 12, four Syrian nationals with alleged Islamist ties used grenades, guns, and a small truck bomb to launch an attack against the U.S. embassy in Damascus. All four of the assailants were killed as was a Syrian security officer who responded to the attack. In the incident's aftermath, the Syrian government enhanced security for the embassy and American personnel in Syria, although it declined to provide the embassy with the findings of its internal investigation into the attack. Damascus repeatedly assured the United States that it will take every possible measure to protect U.S. citizens and facilities in Syria, but at the same time has not taken the measures considered necessary by the United States. In 2004-2005, Syria upgraded physical security conditions on the border and began to give closer scrutiny to military-age Arab males entering Syria. (Visas are still not required for citizens of Arab countries.) It also highlighted the repatriation of more than 1,200 foreign extremists and the arrest of more than 4,000 Syrians trying to go to Iraq to fight. In November, Syria's foreign minister announced the resumption of diplomatic relations with Iraq after a 25-year rupture, and, a month later, the Syrian and Iraqi Ministers of Interior signed a five-year memorandum of understanding to boost, among other things, joint efforts to control the borders and combat terrorism. As in recent years, Damascus highlighted in Syrian government-controlled press, information about clashes on Syrian territory with terrorist groups, particularly with the Jund a-Sham group. Separately, in November, security agents on the Syrian side of the border with Lebanon engaged in a gun battle with a Syrian Islamic militant from the Tawhid and Jihad group. The militant, who was trying to use fake documents to cross into Lebanon, subsequently blew himself up with a hand grenade.
Chapter 1 -- Strategic Assessment Introduction This chapter highlights terrorism trends and ongoing issues, focusing on calendar year 2006 that will provide a framework for detailed discussion in later chapters. Since this issue of the Country Reports on Terrorism falls 5 years after the attacks of September 11, 2001, the chapter commences with a review of progress against the terrorist threat to date. Five Years On, Progress is Mixed Significant Achievements Five years after 9/11, the international community's conflict with transnational terrorists continues. Cooperative international efforts have produced genuine security improvements - particularly in securing borders and transportation, enhancing document security, disrupting terrorist financing, and restricting the movement of terrorists. The international community has also achieved significant success in dismantling terrorist organizations and disrupting their leadership. This has contributed to reduced terrorist operational capabilities and the detention or death of numerous key terrorist leaders. Working with allies and partners across the world, through coordination and information sharing, we have created a less permissive operating environment for terrorists, keeping leaders on the move or in hiding, and degrading their ability to plan and mount attacks. Canada, Australia, the United Kingdom, Saudi Arabia, Turkey, Pakistan, Afghanistan, and many other partners played major roles in this success, recognizing that international terrorism represents a threat to the whole international community. Through the Regional Strategic Initiative, the State Department is working with ambassadors and interagency representatives in key terrorist theaters of operation to assess the threat and devise collaborative strategies, action plans, and policy recommendations. We have made progress in organizing regional responses to terrorists who operate in ungoverned spaces or across national borders. This initiative has produced better intra-governmental coordination among United States government agencies, greater cooperation with and between regional partners, and improved strategic planning and prioritization, allowing us to use all tools of statecraft to establish long-term measures to marginalize terrorists. (See Chapter 5 -- Terrorist Safe Havens (7120 Report) for further information on the Regional Strategic Initiative.) Continuing Challenges Despite this undeniable progress, major challenges remain. Several states continue to sponsor terrorism. Iran remains the most significant state sponsor of terrorism and continues to threaten its neighbors and destabilize Iraq by providing weapons, training, advice, and funding to select Iraqi Shia militants. Syria, both directly and in coordination with Hizballah, has attempted to undermine the elected Government of Lebanon and roll back progress toward democratization in the Middle East. Syria also supports some Iraqi Baathists and militants and has continued to allow foreign fighters and terrorists to transit through its borders into Iraq. International intervention in Iraq has brought measurable benefits. It has removed an abusive totalitarian regime with a history of sponsoring and supporting regional terrorism and has allowed a new democratic political process to emerge. It also, however, has been used by terrorists as a rallying cry for radicalization and extremist activity that has contributed to instability in neighboring countries. Afghanistan remains threatened by Taliban insurgents and religious extremists, some of whom are linked to al-Qaida (AQ) and to sponsors outside the country. In Afghanistan public support for the government remains high, national institutions are getting stronger and the majority of Afghans believe they are better off than under the Taliban. But to defeat the resurgent threat, the international community must deliver promised assistance and work with Afghans to build counterinsurgency capabilities, ensure legitimate and effective governance, and counter the surge in narcotics cultivation. The Israeli/Palestinian conflict remains a source of terrorist motivation. The holding of free elections in the Palestinian Territories was a welcome sign of democratization, but HAMAS' subsequent refusal to disavow terrorism or accept Israel's internationally-accepted right to exist undermined the election's impact. Terrorist activity emanating from the Palestinian Territories remains a key destabilizing factor and a cause for concern. The summer war in Lebanon between Israel and Hizballah was a prime example of how Hizballah's continued efforts to manipulate persisting grievances along the Israeli/Lebanese border can quickly escalate into open warfare. The conflict did force the international community again to demand Hizballah's complete disarmament, in UN Security Council Resolution (UNSCR) 1701, and generated a renewed international commitment to support a peaceful, stable, multi-sectarian democracy in Lebanon. Even so, Hizballah, a designated foreign terrorist organization, in combination with state sponsors of terrorism Iran and Syria, continues to undermine the elected Government of Lebanon and remains a serious security threat in the Middle East. AQ and its affiliates have adapted to our success in disrupting their operational capability by focusing more attention and resources on their propaganda and misinformation efforts. They exploit and interpret the actions of numerous local, pseudo-independent actors, using them to mobilize supporters and sympathizers, intimidate opponents and influence international opinion. Terrorists consider information operations to be a principal part of their effort. The international community has yet to muster a coordinated and effectively resourced counter to extremist propaganda. Overall, AQ and its loose confederation of affiliated movements remain the most immediate national security threat to the United States and a significant security challenge to the international community. Key Al-Qaida Trends Single terrorist events, like the Askariya mosque bombing in Samarra, Iraq on February 22, 2006, which provoked widespread sectarian violence and changed the character of the war in Iraq, can become triggers for broader conflict or templates for copycat attacks. Because terrorism is fundamentally political, the political significance of major events is vital in determining meaningful responses. Thus, the trends presented in this section are interpretive - they provide qualitative insight to complement the statistical detail covered in later chapters. Transition from "Expeditionary" to "Guerrilla" Terrorism Early AQ terrorist attacks were largely expeditionary. The organization selected and trained terrorists in one country, then clandestinely inserted a team into the target country to attack a pre-planned objective. The 1998 U.S. embassy bombings in Nairobi and Dar es-Salaam, the 2000 attack on the USS Cole, and the 9/11 attacks were examples of this. Improved international border security, transportation security and document control have made this type of attack more difficult. Clandestine insertion across borders is harder, reconnaissance is more risky, and international movement of funds and equipment is more likely to be detected. Thus we have seen a trend toward guerrilla terrorism, where the organization seeks to grow the team close to its target, using target country nationals. Through intermediaries, web-based propaganda, and subversion of immigrant expatriate populations, terrorists inspire local cells to carry out attacks which they then exploit for propaganda purposes. This circumvents the need to insert a team across borders or clandestinely transfer funds and materiel. The 2004 Madrid bombing, the London attacks of July 2005, and the thwarted August 2006 attempt to attack passenger jets operating from British airports include elements of this approach. Both expeditionary and guerrilla approaches co-exist, alongside true "home-grown" terrorism involving local cells acting spontaneously rather than being than consciously inspired by trans-national terrorists. Rather than adopting a single modus operandi, AQ and its affiliated movements continue to be highly adaptive, quickly evolving new methods in response to countermeasures. Terrorist Propaganda Warfare As identified in the 2005 Country Reports, the international community's success in disrupting terrorist leadership and operational capacity led AQ to focus greater efforts on misinformation and anti-Western propaganda. This trend accelerated this year, with AQ cynically exploiting the grievances of local groups and attempting to portray itself as the vanguard of a global movement. AQ still retains some operational capability and the intent to mount large-scale spectacular attacks, including on the United States and other high-profile Western targets. Overall, however, AQ's current approach focuses on propaganda warfare - using a combination of terrorist attacks, insurgency, media broadcasts, Internet-based propaganda, and subversion to undermine confidence and unity in Western populations and generate the false perception of a powerful worldwide movement. The Terrorist "Conveyor Belt" Radicalization of immigrant populations, youth and alienated minorities in Europe, the Middle East, and Africa continued. It became increasingly clear, however, that such radicalization does not occur by accident, or because such populations are innately prone to extremism. Rather, there was increasing evidence of terrorists and extremists manipulating the grievances of alienated youth or immigrant populations and then cynically exploiting those grievances to subvert legitimate authority and create unrest. Terrorists seek to manipulate grievances represent a "conveyor belt" through which terrorists seek to convert alienated or aggrieved populations, convert them to extremist viewpoints, and turn them, by stages, into sympathizers, supporters, and ultimately, members of terrorist networks. In some regions, this includes efforts by AQ and other terrorists to exploit insurgency and communal conflict as radicalization and recruitment tools, especially using the Internet to convey their message. Countering such efforts demands that we treat immigrant and youth populations not as a source of threat to be defended against, but as a target of enemy subversion to be protected and supported. It also requires community leaders to take responsibility for the actions of members within their communities and act to counteract extremist subversion. A New Kind of Enemy Al-Qaida as a Global Insurgency The surface events mentioned above highlight a deeper trend: the transformation of international terrorism from the traditional forms that Congress intended to address when it established the annual Country Reports series into a broader, multifarious approach to transnational non-state warfare that now resembles a form of global insurgency. We have entered a new era of conflict that may demand new paradigms and different responses from those of previous eras. AQ and its core leadership group represent a global action network that seeks to aggregate and exploit the effects of widely dispersed, semi-independent actors. It openly describes itself as a transnational guerrilla movement and applies classic insurgent strategies at the global level. AQ applies terrorism, but also subversion, propaganda, and open warfare, and it seeks weapons of mass destruction in order to inflict the maximum possible damage on its opponents. It links and exploits a wider, more nebulous community of regional, national, and local actors who share some of its objectives, but also pursue their own local agendas. Finally, it works through regional and cross-border safe havens that facilitate its actions while hampering government responses. Disaggregating the Threat To the extent that AQ succeeds in aggregating this broader constellation of extremist actors, it can begin to pursue more frequent and geographically extensive terror attacks. Therefore, we must act to disaggregate the threat, through international cooperation, counterpropaganda, counter subversion, counterinsurgency, and traditional counterterrorism. Disaggregation breaks the links in the chain that exploit ordinary people's grievances and manipulates them into becoming terrorists. It seeks to provide those who are already radicalized with a way out and to create pathways for alienated groups to redress their legitimate grievances without joining the terrorist network. Disaggregation denies AQ its primary objective of achieving leadership over extremist movements worldwide and unifying them into a single movement. It does not remove the threat but helps reduce it to less dangerous local components, which can be dealt with by individual governments and communities working together. Trusted Networks Such cooperation requires the creation of trusted networks to displace and marginalize extremist networks. While killing and capturing key terrorist actors is fundamental in combating terrorism, it can have detrimental effects. These actions do not eliminate the threat and, if mishandled, can be actively counterproductive. Instead, we must seek to build trusted networks of governments, private citizens and organizations, multilateral institutions, and business organizations that work collaboratively to defeat the threat from violent extremism. Such networks, over time, help wean at-risk populations away from subversive manipulation by terrorists and create mechanisms to address people's needs and grievances, thus marginalizing terrorists. Youth organizations, educational networks, business partnerships, women's empowerment, and local development initiatives can all play a role, with government as a supportive partner. Leaders, Safe Havens, Underlying Conditions To make such active measures effective, the three strategic components of the terrorist threat that must be neutralized are leaders, safe havens, and underlying conditions. Leaders provide a motivating, mobilizing, and organizing function and act as symbolic figureheads. Safe havens, which are often in ungoverned or under-governed spaces, provide a secure environment for training, planning, financial and operational support; and a base for mounting attacks. They may be physical or virtual in nature. In addition, underlying conditions provide the fuel, in the form of grievances and conflicts that power the processes of radicalization. Treating this new era of conflict as a form of global insurgency implies that counterinsurgency methods are fundamental in combating the new form of transnational terrorism. These methods include firstly, a focus on protecting and securing the population; and secondly, politically and physically marginalizing the insurgents, winning the support and cooperation of at-risk populations by targeted political and development measures, and conducting precise intelligence-led special operations to eliminate critical enemy elements with minimal collateral damage. Integrating All Elements of National Power All elements of national power including diplomatic, military, economic, and intelligence, must be integrated and applied in a coordinated whole-of-government fashion. The intellectual and psychological dimensions of the threat are at least as important as its physical dimension, so countermeasures must be adequately coordinated and resourced. Thus, the military component of national power plays only a supporting role in this effort; the primary focus is on non-military influence. Because the enemy is a non-state actor who thrives among disaffected populations, private sector efforts are at least as important as government activity. Citizen diplomacy, cultural activity, person-to-person contact, economic cooperation and development, and the application of media and academic resources are key components of our response to the threat. Motivating, mobilizing, and supporting such privately led activities are key leadership tasks in the new environment. Commitment - the Key to Success Experience since 9/11 has shown that the key success factor in confronting violent extremism is the commitment by governments to work with each other, with the international community, with private sector organizations, and with their citizens and immigrant populations. Where governments cooperate, build trusted networks, seek active informed support from their people, provide responsive, effective and legitimate governance, and engage closely with the international community, the threat from terrorism has been significantly reduced. Where governments have lacked commitment in working with their neighbors and engaging the support of their people, terrorism and the instability and conflict that terrorists exploit remain key sources of threat. Summary This chapter sets the scene for the detailed analysis that follows. In reviewing events since 9/11, it is clear that progress has been mixed. Significant achievements in border security, information sharing, transportation security, financial controls, and the killing or capture of numerous terrorist leaders have reduced the threat. But the threat still remains, and state sponsorship, the terrorist response to intervention in Iraq, improved terrorist propaganda capabilities, the pursuit of nuclear weapons by state sponsors of terrorism, and terrorist exploitation of grievances represent ongoing challenges. Recent trends include the emergence of "guerrilla" terrorism in parallel with traditional "expeditionary" approaches, improved AQ propaganda warfare capacity, and emerging evidence of terrorist "conveyor belt" that seeks to deliberately manipulate and exploit grievances in at-risk populations. A deeper trend is the shift in the nature of terrorism, from traditional international terrorism of the late 20th century into a new form of transnational non-state warfare that resembles a form of global insurgency. This represents a new era of warfare, and countering this threat demands the application of counterinsurgency techniques that focus on protecting, securing, and winning the support of at-risk populations, in addition to targeting violent extremist networks and individual terrorists. Trusted networks of private and government organizations and individuals, and the application of integrated civil-military measures across all elements of national power are keys to this approach. Terrorist leaders, safe havens, and the underlying conditions that terrorists exploit are the principal strategic targets that we must address. The key success factor that has emerged so far is commitment by governments to work with the international community, their own populations, and at-risk immigrant or youth populations, to counter the threat collaboratively. Within this framework, subsequent sections of this report will now present detailed analyses of each region and country. Chapter 2 -- Country Reports: East Asia and Pacific Overview "Our cause is a just cause. Terrorism respects no value system; terrorism does not respect the tenets of the great religions of the world; terrorism is based on evil, intolerance, and bigotry. And no free societies, such as Australia and the United States, can ever buckle under to bigotry and intolerance." John Howard, Prime Minister of Australia Remarks at the White House Washington, DC, May 16, 2006 The Jemaah Islamiya regional terrorist network remained a serious threat to Western and regional interests, particularly in Indonesia and the Southern Philippines, although its capabilities were degraded due in large part to regional counterterrorism successes in 2005-2006. As 2007 began, DNA analysis conducted by the FBI confirmed the death of Abu Sayyaf Group's (ASG) nominal leader, Khaddafy Janjalani, at the hands of the Armed Forces of the Philippines (AFP). Early in 2007, Philippine forces also eliminated ASG spokesperson, Abu Solaiman. In August, the AFP killed a significant ASG sub commander, Ismin Sahiron. These deaths represented a major blow to JI, but did not eliminate the overall threat to U.S. interests in the Philippines. JI bombers Dulmatin and Patek remained on the run, probably on Jolo Island. Other terrorists remained at large in Southeast Asia, such as key JI operative Noordin Mat Top, in Indonesia. Geography makes effective border control problematic for archipelagic states like Indonesia and the Philippines. Monitoring remote locations among the thousands of islands in the Sulawesi Sea and Sulu Archipelago that span the boundaries between Indonesia, Malaysia, and the Philippines is extremely difficult, which makes this tri-border area well suited to terrorist activities, including movement of personnel, equipment, and funds. Therefore, regional capacity building has emerged as a priority goal, in addition to bilateral cooperation and national capacity building. Institutes like the U.S.-Thailand International Law Enforcement Academy (ILEA) in Bangkok and the Southeast Asia Regional Center for Counterterrorism (SEARCCT) in Malaysia continued to expand their activities to provide effective counterterrorism training to law enforcement officers throughout the region. Likewise, the Australian-Indonesian Jakarta Center for Law Enforcement Cooperation (JCLEC) is a promising additional regional center for capacity building. Multilateral fora, including the United Nations Security Council's Counterterrorism Committee (UNCTC), the G8's Roma-Lyon Group and Counterterrorism Action Group (CTAG), the Asia-Pacific Economic Cooperation (APEC) forum, the Association of Southeast Asian Nations (ASEAN), which adopted a new ASEAN Convention on Counterterrorism pending ratification, and the ASEAN Regional Forum (ARF), continued their important roles as key organizations for regional counterterrorism cooperation. Australia worked to strengthen the Asia-Pacific region's counterterrorism capacity through a range of initiatives, both bilaterally and in regional fora such as APEC, the ASEAN ARF, and the Pacific Island Forum (PIF). Australia increased its four-year counterterrorism assistance to the region by about $70 million to boost the capacity to combat terrorism, bringing the total amount committed to offshore counterterrorism activities since 2004 to $350 million. In March, Australian police arrested three suspected terrorists in Melbourne as part of an ongoing counterterrorism operation, disrupting a significant threat to the city. China supported several operational and logistical aspects of the War on Terror. China participates in the United States Megaports Initiative designed to improve the security of U.S.-bound cargo. Container Security initiative programs are operating in the ports of Shanghai and Shenzhen. China increased its efforts to build its domestic counterterrorism capabilities with a focus on improving security for the 2008 Beijing Olympics. Beijing continued to express concern that terrorists operate on Chinese territory and has asserted that some members of the Uighur minority in Xingjiang Province pose a threat to China's domestic stability. Japan strengthened its own security by contributing to counterterrorism capacity-building among Asian countries and by participating in a second trilateral counterterrorism dialogue with the United States and Australia in October. Japan is using Official Development Assistance (ODA) grants to expand counterterrorism capacity building in Southeast Asia. This $60 million dollar annual program, initiated in FY-2006, includes projects aimed at increasing maritime and port security. The Republic of Korea is shifting its attention to possible acts of terror beyond the Korean Peninsula. Reflecting this shift, the Ministry of Foreign Affairs and Trade (MOFAT) appointed its first Director for International Counterterrorism Cooperation in February. Thailand's military staged a coup in September. An interim government has been attempting to address the ongoing violence connected to a separatist movement in the ethnic Malay, Muslim south. Although the roots of the problem are ethnic and not religious, there is concern that southern unrest has the potential to attract international terrorist groups such as JI and al-Qaida that may attempt to capitalize on the increasingly violent situation for their own purposes. Australia In addition to its substantial ongoing efforts to combat domestic and international terrorism, Australia launched new initiatives working with its regional neighbors to assist in building their resolve and capacity to confront terrorism. The Australian Federal Police (AFP) Joint Counterterrorism Teams' (JCTT) multi-agency effort to address domestic and international terrorism concerns in Australia's six largest cities became fully operational this year. In March, Australian police arrested three suspected terrorists in Melbourne as part of an ongoing counterterrorism operation, disrupting a significant threat to the community. In August, an Australian court sentenced Faheem Khalid Lodhi to 20 years in prison for plotting to bomb Australia's national electricity grid. Regional cooperation between Australian and Southeast Asian government agencies continued to disrupt terrorist operations. Active cooperation with immigration agencies in the region strengthened border controls and impeded terrorists' ability to travel, recruit, train, and operate. In December, Australia enacted new anti-money laundering and counterterrorism financing (AML/CTF) legislation that would make the Australian Transaction Reports Analysis Centre (AUSTRAC), which monitors financial transactions, the national AML/CTF regulator with supervisory, monitoring, and enforcement functions over a diverse range of industry sectors. Australia strengthened its intelligence capabilities by funding additional staff and technical capabilities, and established identity security strike teams to investigate and prosecute people and syndicates involved in manufacturing false identities. As part of measures Australia undertook in response to the 2005 Wheeler Report on Aviation Security and Policing at Australian Airports, airport police commanders began their new role overseeing crime and security-related matters at eleven counterterrorism first response airports in the country. Australia announced in its budget that it would enhance closed circuit television monitoring and analysis capability at its international airports. This will expand the deployment of explosives trace-detection equipment for the examination of domestic air cargo at each of Australia's major airports and will improve the quality of security training for cargo handlers. Australia committed to enhancing its capability to identify, inspect, and respond to high-risk export air cargo through the deployment of additional explosives detector-dog teams; the provision of additional mobile X-ray vans; and the trial of communications technology to achieve real-time air cargo reporting. The Australian government provided additional funding to enhance its ability to detect, deter, and respond to illegal activity near its borders, including illegal fishing and trafficking in persons, through increased surveillance and patrolling. Australia used its position as Chair of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (WA) to increase awareness of the Man-Portable Air Defense Systems (MANPADS) threat and the need for more effective export controls, and to solicit greater cooperation, particularly from states that produce, export, or stockpile MANPADS. Australia also led outreach missions to non-Wassenaar states China, India, Belarus, Kazakhstan, and Singapore. In June, Australia hosted an international seminar in Geneva to promote the need for practical action to counter the global MANPADS threat. In the same month, Australia, the United States, and the Philippines hosted a workshop in Manila on the methodology of conducting airport MANPADS vulnerability assessments. In August, Australia advocated for increased efforts to counter the proliferation of MANPADS at the UN Conference on Disarmament. In October, Australia co-chaired with Thailand an ASEAN Regional Forum workshop on stockpile security of MANPADS and small arms and light weapons to help regional countries strengthen their domestic inventory controls. The Australian ambassador for counterterrorism chaired the International Counterterrorism Coordination Group, Australia's interagency counterterrorism working group. Australia increased its four-year regional counterterrorism assistance package by about $70 million to boost the capacity of neighbor countries to combat terrorism, bringing the total amount committed to offshore counterterrorism activities since 2004 to $350 million. Building on successful regional cooperation among law enforcement, intelligence, and border control authorities, the package included new measures and a new emphasis on expanding regional cooperation. Cooperation will focus on countering the threat of terrorists acquiring or using weapons of mass destruction, building regional capability for responding to terrorist attacks, and commencing activities to promote tolerance and counteract terrorist propaganda. Key programs included funding for enhancing law enforcement counterterrorism capacity and liaison networks, expanding intelligence cooperation capabilities, improving border control capability and coordination in Southeast Asia, further developing the APEC Regional Movement Alert System, enhancing Indonesia's border alert system at major ports, building regional awareness of the terrorist WMD threat and strengthening regional controls on chemical, biological, radiological, and nuclear materials, and improving regional emergency response capacity and coordination. In July, Australia became an initial partner nation in the U.S. Global Initiative to Combat Nuclear Terrorism and, in October, it participated in a second Trilateral Counterterrorism Dialogue with the United States and Japan. Australia continued to provide legal drafting assistance to regional states, including the South Pacific islands, seeking to adopt international conventions and protocols against terrorism and to bring their domestic laws into conformity with these conventions. In February, Australia opened the upgraded Transnational Crime Centre in Jakarta which was first established as a joint initiative between Australia and Indonesia in the aftermath of the 2002 Bali bombings. The center housed Indonesia's first national intelligence database, linking 30 locations throughout the country. The joint Australian-Indonesian Jakarta Centre for Law Enforcement Cooperation (JCLEC) located in Semarang, Indonesia has offered more than 50 courses and trained more than 1,200 officers to date. The AFP committed additional agents to Jakarta and Manila to work closely with those governments and the FBI to apprehend JI fugitives. The AFP received funding to expand its investigative and specialist training, currently delivered to regional law enforcement partners through facilities like JCLEC. Funding was also targeted toward conducting offshore exercises and training with regional partners, increasing the number of counterterrorism advisers working in the AFP's international liaison officer network, introducing to high priority locations a custom-built Case Management and Information System developed for use in overseas jurisdictions, and enhancing specialist forensic and technical training for law enforcement agencies in the region. The Australian government substantially increased the AFP's International Deployment Group by over 400 personnel and created an Operational Response Group ready to respond on short notice to emerging law and order issues and to conduct stabilization operations. Australia contributed an additional 500 troops to Afghanistan as part of a Dutch-led provincial reconstruction team. By year's end, there were 1,000 Australian troops in Iraq and 800 in Afghanistan. Australia designated a total of 19 terrorist organizations under its domestic criminal code. The Government of Australia and its Muslim advisory body, the Muslim Community Reference Group, continued efforts begun in 2005 to develop and implement a National Action Plan to promote social cohesion, harmony, and security. The plan committed almost $30 million for a range of activities to address extremism and intolerance in the Australian community. Activities will include integration enhancement and crisis management training for Muslim communities, and education and employment programs that work to bring law enforcement agencies and Muslim communities together to resolve issues of conflict and discrimination. Burma Bilateral relations between Burma and the United States remained strained. The Burmese regime's willingness to cooperate and coordinate on counterterrorist activities within the country and throughout the region remains limited. However, Burma has cooperated with the United States on both transnational terrorist threats and law enforcement efforts to stem narcotrafficking and money laundering. Burmese Special Branch police created a new counterterrorism unit headquartered in Rangoon. The Burmese judicial system lacked independence and transparency and suffered from corruption. The government defined almost all anti-regime activities "acts of terrorism" and made little distinction between peaceful political dissent and violent attacks by insurgents or criminals. Suspected perpetrators of any acts that opposed the regime were subject to lengthy detention without trial or due process. The government was quick to characterize dissident groups as aligned with terrorist organizations and used this as justification to scrutinize and disrupt their activities. The regime regularly labeled exile leaders and political activists as "terrorists." No reliable evidence existed that any terrorists, terrorist organizations, or affiliations, were using Burma as a safe haven. No known anti-American terrorist groups were operating in Burma. However, some observers posited possible links between known terrorist organizations and two local insurgent groups: the Rohingya Solidarity Organization, and the Arakan Rohingya National Organization. There were few signs that either group remained active inside of Burma, although the Burmese regime's severe repression of the Rohingya Muslim population inside Burma could foster sympathy with extremist methods and objectives. Indigenous violence in Burma generally was targeted against the ruling regime. Various insurgent groups in ethnic minority areas near borders with China, India, Bangladesh, Laos, and Thailand conducted small-scale actions against the Burmese authorities. The Government of Burma attributed several recent bombings in the capital and elsewhere to anti-regime elements, but did not publicly file charges against specific individuals. On January 3, two small-scale bombings occurred in Bago. No deaths or injuries were reported. Police conducted an initial investigation and blamed ethnic Karen groups for attempting to disrupt the National Convention and Burmese Independence Day, which is January 4. On April 20, five small improvised explosive devices went off in downtown Rangoon; police reported minimal damage and no injuries. On September 21, Embassy contacts in the Burmese Special Branch Police reported that a small bomb exploded inside a women's bathroom at the Teachers Training College in Rangoon, but that no one was injured and the explosion caused very little damage. The Burmese police politely refused the Embassy's request to view either the scene or any remaining fragments. As in most such incidents, the Government of Burma claimed the incident was a subversive act, "committed by a group of insurgent destructive elements who wanted to disturb and destroy stability of the state." Authorities did not make public any evidence of a genuine investigation or identify the specific perpetrator(s). Cambodia Cambodia's ability to investigate potential terrorist activities was limited by a lack of training and resources. An absence of comprehensive domestic legislation to combat terrorism also hindered the government's ability to arrest and prosecute terrorists. Cambodia's political leadership, however, demonstrated a strong commitment to take aggressive legal action against terrorists. There were no indications that specific terrorist groups operated in Cambodia, but porous borders and endemic corruption could make the country vulnerable to a terrorist presence. The Cambodian government believed that the Cambodian Freedom Fighters (CFF), which carried out an armed attack in November 2000 that killed eight people, are still capable of carrying out attacks in Cambodia. The leader of this group was arrested in California in 2005. The Cambodian government was working with the FBI to bring the leader of the CFF to trial in the United States. Various officials were identified to take positions in Cambodia's National Counterterrorism Committee (NCTC), a policy level decision-making body established by the government in 2005 and chaired by the prime minister. The Australian military conducted a conference with the NCTC in August and expressed its intention to follow-up with a tabletop exercise with the Center. In addition to providing assistance for the NCTC, the Australian government was helping Cambodia draft a new counterterrorism law. The draft law was being reviewed by the relevant legislative committee and the national legislature was expected to adopt it. The Australian and U.K. governments jointly sponsored a National Seminar on Counterterrorism in April to help train the Cambodian military and police. The Malaysian government cooperated with the Cambodian government on Malaysia-specific cases. In December, following the visit of the Sri Lankan prime minister, the Cambodian government announced that a Sri Lankan military intelligence official would work with police and defense officials on intelligence matters. His announcement followed Prime Minister Hun Sen's assurance to his Sri Lankan counterpart that the Tamil Tiger rebels would not receive arms smuggled from Cambodia, although the government acknowledged it was likely this has occurred in the past. Cambodia has destroyed 200,000 small arms over the last several years with EU assistance, and, with U.S. assistance, has destroyed its stockpile of MANPADS. With U.S. assistance, the Government of Cambodia installed computerized border control systems at Phnom Penh and Siem Riep airports and at the land border crossing of Poipet and Koh Kong. The Cambodian government also cooperated fully with U.S. requests to monitor terrorists and terrorist entities listed as supporters of terrorist financing. China As Beijing prepares to host the 2008 Olympics, China increasingly reached out to the United States and other nations on counterterrorism cooperation. No acts of terrorism were committed in China this year, but Chinese citizens were victims of terrorist acts in Afghanistan, Iraq, Lebanon, and Pakistan. China participated in the United States Megaports Initiative designed to improve security for United States-bound cargo. The U.S. Department of Energy and its Chinese counterparts made progress toward implementation of the November 2005 agreement allowing the installation of equipment at China's ports to detect hidden shipments of nuclear and other radioactive materials. China became an initial partner nation in the U.S. Global Initiative to Combat Nuclear Terrorism, attending the first meeting of the Global Initiative in Rabat, Morocco in October. China also continued its participation in the Container Security Initiative. Chinese officials signed statements with counterterrorism counterparts in the Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF), Asia Pacific Economic Cooperation (APEC), and the Shanghai Cooperation Organization (SCO). In April, China co-hosted the Fourth ARF Meeting on Counterterrorism and Transnational Crime in Beijing. China is a founding member of the SCO and has made counterterrorism one of the group's main objectives. In June, China hosted an SCO summit in Shanghai that included India, Iran, Pakistan, and Mongolia as observers. At the summit, the member states agreed to hold joint counterterrorism military exercises in Russia in 2007, with troops from all six SCO member states participating. In August, China and Kazakhstan held their first-ever joint counterterrorism exercises in Kazakhstan. In August, China signed agreements with Pakistan on border control, terrorism, and crime and, in December, held joint counterterrorism exercises in Pakistan. China ratified the UN International Convention for the Suppression of the Financing of Terrorism in February and worked to expand its international cooperation on terrorist finance through mutual legal assistance agreements with foreign jurisdictions. In October, China passed a new Anti-Money Laundering Law, which took effect January 1, 2007, broadening the scope of existing anti-money laundering regulations to hold a greater range of financial institutions liable and to expand the powers of the People's Bank of China (PBOC). With the PBOC as the lead agency for all anti-money laundering activities in China, the Ministry of Public Security (MPS) is responsible for criminal investigations, and the State Administration of Foreign Exchange (SAFE) is the primary agency for countering illicit foreign exchange transactions. Institutional obstacles and rivalries between domestic financial and law enforcement authorities hampered Chinese anti-money laundering work and other financial law enforcement aimed at countering terrorists. Still, China's Financial Intelligence Unit (FIU), established in 2004 to track suspicious transactions, worked closely with the Financial Crimes Enforcement Network (FINCEN) in the United States to develop its capabilities. China began requiring banks and financial institutions to establish anti-money laundering systems, record customer identities, and report suspicious transactions. In January, China launched a national credit information system to more efficiently monitor transactions, information collection, and dissemination. Nonetheless, anti-money laundering efforts were hampered by the prevalence of counterfeit identity documents and cash transactions conducted by underground banks, which, in some regions, reportedly accounted for over one-third of lending activities. China refused to recognize the Egmont Group, an umbrella body coordinating the activities of over 100 FIUs worldwide, because the Group includes an FIU from Taiwan. Joining the Financial Action Task Force (FATF) remained an important priority for China. In 2004, China joined the Eurasia FATF-style regional group, and, in 2005, China was granted FATF observer status. In November 2006, an FATF Mutual Evaluation Team comprehensively reviewed China's anti-money laundering and counterterrorism finance regime. The results of the review and China's bid to join FATF will be discussed at the June 2007 FATF Plenary Meeting. Human rights organizations have accused China of using counterterrorism as a pretext to continue efforts to suppress Uighurs, a predominantly Muslim ethnic group that comprises the majority of the population of the Xinjiang Uighur Autonomous Region. In August, Chinese police officials announced that since 1990 they have seized 41 tons of explosives from separatists in Xinjiang, including grenades and materials to make bombs. Also in August, China convicted a Canadian citizen of Uighur ethnicity of involvement in East Turkistan terrorist activities. In November, China gave Canada assurances that he would not be executed for his alleged crimes; he remains in prison. In May, the United States released five ethnic Uighur Chinese national detainees found not to be Enemy Combatants from Guantanamo (GTMO) to Albania. The Chinese government denounced the move as a violation of international law and demanded the return of the men to China. Some of the remaining Uighur detainees at GTMO were designated for transfer or release and others will have their status reviewed annually. Formally established in 2004, the FBI Legal Attach?Office in Beijing bolstered U.S.-China cooperation on counterterrorism investigations. China provided substantive intelligence in some counterterrorism cases, but more work remained to be done in terms of its overall responsiveness to U.S. requests. In July, the first meeting between a standing Chinese Minister of Public Security and the Director of the FBI was held in Washington, D.C., where FBI Director Robert Mueller hosted Minister Zhou Yongkang, principally to discuss terrorism matters. Following Secretary of Homeland Security Michael Chertoff's visit to Beijing in April, the United States and China signed a Memorandum of Understanding (MOU) to allow United States Federal Air Marshals (FAMS) to fly to China and Chinese air marshals to fly into the United States. In addition, the MOU provided for training and information exchanges. The first FAMS mission was completed in August, and the Chinese air marshals completed training at the FAMS Training Facility in September. In February, the United States Coast Guard Liaison Office was established in Beijing as a focal point for United States-China exchanges to enhance the safety and security of ports around the world in compliance with the Maritime Transportation Safety Act. Activities included a visit by the U.S. Coast Guard Commandant, three expert-level delegations to conduct training and exchanges, two port visits in China by U.S. Coast Guard cutters, and one international exercise. Although not publicly attributing any particular incident to terrorism, Chinese authorities asserted that terrorists, primarily based in Xinjiang, continued to operate clandestinely on Chinese territory. The Chinese government attempted to restrict foreign support for perceived terrorism and increased the number of deployed security personnel in response to perceived terrorist activities in Xinjiang. The United States has sanctioned Chinese entities for missile and chemical weapons proliferation activities, including transfers to Iran, North Korea, and Libya. Hong Kong Hong Kong's role as a major transit point for cargo, finances, and people makes it an important counterterrorism partner, and the Hong Kong Special Administrative Region Government (HKSARG) continued to cooperate with the United States on counterterrorism efforts. The high level of cooperation and the successful implementation of the Container Security Initiative (CSI) by Hong Kong Customs officials received continued praise from visiting U.S. government delegations, which described it as a model for CSI implementation. The U.S. government continued to work with one of Hong Kong's port terminal operators to develop and refine integrated container security architecture. Hong Kong law enforcement agencies provided full support and cooperation to their overseas counterparts in tracing financial transactions suspected of being linked to terrorist activities. Hong Kong actively participated in various anti-money laundering and counterterrorist financing initiatives, including the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering. Hong Kong's Joint Financial Intelligence Unit (JFIU), operated by Hong Kong Police and the Customs and Excises Department, is a member of the Egmont Group. The UN International Convention for the Suppression of Financing Terrorism became applicable to Hong Kong when ratified by the People's Republic of China on April 19. The Hong Kong regional government published the list of individuals and entities designated as terrorists or terrorist associates under UNSCR 1267 and the financial regulators circulated the lists to financial institutions, advising them to check the lists and report any suspicious transactions to law enforcement agencies. The Hong Kong Monetary Authority recently coordinated the establishment of an Industry Working Group on Anti-Money Laundering that included representatives from some 20 authorized institutions. The group established three sub-groups to address terrorist financing, transaction monitoring systems, and private banking issues. Macau The Macau Special Administrative Region Government (MSARG) passed both anti-money laundering and counterterrorism finance legislation. Still, Macau's lack of judicial and law enforcement experience in combating financial crimes, combined with its expanding casino industry and history as a base for organized crime, provided a potential site for money laundering and terrorist financing activities. On March 23, the Macau government passed new counterterrorism legislation aimed at strengthening counterterrorist financing measures. The law made it illegal to conceal or handle finances on behalf of terrorist organizations. Individuals were liable even if they were not members of designated terrorist organizations themselves. The legislation also allowed, in certain cases, prosecution of persons who committed terrorist acts outside of Macau and mandated stiffer penalties. On the same day, the government also passed a money laundering bill that strengthened its oversight of financial institutions. The new law imposed requirements for the mandatory identification and registration of financial institution shareholders, customer identification, and external audits that includes reviews of compliance with anti-money laundering statutes. The Macau government has the authority to freeze terrorist assets, although a judicial order is required. Macau financial authorities directed the institutions they supervise to conduct searches for terrorist assets using the UN 1267 Sanctions Committee consolidated list and the list of Specially Designated Global Terrorists designated by the United States pursuant to E.O. 13224. Bank examiners reviewed customer profiles, large cash transaction records, and suspicious bank reports. They also interviewed frontline staff, senior management and money laundering compliance officers. The Government of Macau continued to exchange information with the Hong Kong Special Administrative Region and counterparts in mainland China. Additionally, Macau continued to cooperate internationally in counterterrorism efforts, through INTERPOL and other security-focused organizations within the Asia Pacific Region. Indonesia Since late 2004, the Indonesian government increased counterterrorism efforts and counterterrorism cooperation with both the United States and the international community. The Indonesian National Police (INP) had several successes in breaking-up terrorist cells and arresting terrorists with links to Jemaah Islamiya (JI). INP investigations into the October 2005 suicide attacks on Bali led to numerous successes for Indonesia's counterterrorism investigators. Links among violent Islamic radicals and extremist organizations, including JI and its associates, remained a serious security threat to both Western and domestic targets in Indonesia, although no major anti-Western terrorist incident occurred. Physical security at major hotels and tourist venues in Jakarta and Bali was upgraded significantly. At year's end, the main target of Indonesian CT units remained Malaysian JI operative and recruiter Noordin Mohammed Top, suspected in nearly every major terrorist attack in Indonesia since 2002. The security situation in the previously strife-torn Maluku region improved, absent major incidents of interfaith violence. In central Sulawesi, where terrorist attacks in 2005 claimed several lives, a special taskforce led by the INP's top CT investigators identified and arrested several JI-linked terrorists responsible for the October 2005 Poso schoolgirl beheadings and other previously unresolved cases. The three main suspects arrested in April were brought to trial in Jakarta. In September, several days of street violence in Indonesia's eastern provinces followed the executions in Palu of three Christian men for their role in inciting deadly attacks against Muslims in 2000. However, the perpetrators behind the October shooting death of a Christian priest in Palu remained at large. Also at large were more than two dozen terrorist suspects in central Sulawesi who continued to evade INP investigators. The INP feared aggressive police operations would provoke the militants, and, in November, the INP unsuccessfully sought cooperation from the suspects' families to encourage the suspects to surrender. The Indonesian attorney general's office continued to seek convictions in more than two dozen terrorism cases tried this year. Among those convicted were terrorist recruiter and trainer Subur Sugiyarto, terrorist financier Abdullah Sunata, and trained bomb maker Mohammad Cholily. In July, Indonesia's attorney general staffed the long awaited Terrorism and Transnational Crime Task Force, designed to oversee counterterrorism trials nationwide through a cadre of special terrorism prosecutors. Task Force members immediately began to take on over a dozen counterterrorism cases, including the three central Sulawesi cases. Indonesia's policy of routinely granting sentence remissions to nearly all prisoners continued to benefit convicted terrorists, resulting in several early releases. JI figure Emir Abu Bakar Ba'asyir, sentenced in 2005 to 30 months in prison for his involvement in a "sinister conspiracy" to carry out the 2002 Bali attacks, was released in June after several routine sentence reductions. In December, the Indonesian Supreme Court overturned Ba'sayir's conviction based on a judicial review in which Ba'sayir's defense presented new evidence. Also released were several lesser known JI-linked figures and Rusman "Gun-gun" Gunawan, the younger brother of Indonesian-born Riduan bin Isomuddin, also known as Hambali, who was an operational leader in JI and served as the middleman between JI and al-Qaida from 2000 until his capture in 2003.1 Hambali, a high value detainee, was transferred to Guantanamo Bay in September. The Indonesian government continued its efforts to develop an effective anti-money laundering regime, but investigations and prosecutions in these cases continued to fall short. Indonesian police froze terrorist financial assets uncovered during investigations, but the government's implementation of the sanctions regime established pursuant to UNSCR 1267 was hampered by poor interagency coordination and by human and technical capacity deficits in both government and financial institutions. The USAID is promoting capacity building through its Financial Crimes Prevention Project, a multi-year program to provide technical advisors and support to Indonesia's effort to develop an effective and credible regime against money laundering and terrorism finance. Indonesian counterterrorism efforts remained hindered by weak laws and enforcement, serious internal coordination problems, and systemic corruption that further limited already strained government resources. Lawmakers and other senior elected officials continued their slow pace toward needed legal reforms. A widely discussed plan to establish an official counterterrorism coordinating agency appeared to have been shelved after awaiting final presidential approval. Prospective members of the independent police commission designed to help guide police reform were identified this year, but they still need a formal presidential appointment before assuming their responsibilities. The government has not yet submitted a revision of the 2003 Counterterrorism Law to the House of Representatives. Indonesian authorities recognized that more effective prosecution of terrorism cases would require a revision of the law to include updated standards for introducing evidence in terror cases and comprehensive articles on conspiracy. Japan Domestically, Japan continued to bolster its defenses against terrorism. In March, the Cabinet approved emergency contingency plans for 47 prefectures to better protect the public from terrorist attacks. In May, Japan revised the Immigration Control and Refugee Recognition Act to enable immigration officials to collect and electronically store fingerprint and facial imagery from foreigners. The Ministry of Justice Immigration Bureau continued testing began in 2004 on a biometric fingerprint and facial recognition system at Narita and Kansai airports with the aim of identifying people trying to enter Japan on fake passports. In June, the government developed legislation designed to combat money laundering and terrorist financing and plans to submit the bill to the Diet. In a bid to clamp down on money laundering, the Ministry of Finance announced in August that Japanese financial institutions would be required to confirm the identity of customers sending 100,000 yen or more overseas. The Financial Services Agency announced a similar change for domestic remittances. On December 1, the Diet passed the Infectious Disease Law to prohibit possession and production of 12 pathogens, including Anthrax and the Ebola Virus to help prevent bioterrorism. Japan used USAID's Official Development Assistance (ODA) grants to expand counterterrorism capacity in Southeast Asia. The Ministry of Foreign Affairs (MOFA) Economic Cooperation Bureau initiated the grant for Cooperation on Counterterrorism and Security Enhancement. This nearly US$ 60.86 million annual program included projects aimed at bolstering piracy prevention, increasing maritime and port security, and preventing weapons proliferation. Japan made valuable contributions to building counterterrorism capacity among Asian countries. In January, Japan hosted a two-day ministerial conference on international transport security to promote cooperation on ground transportation security; representatives from 14 countries attended. In June, Foreign Minister Aso signed a counterterrorism capacity building plan with Uzbekistan, Tajikistan, Kyrgyzstan, and Kazakhstan offering equipment and support for border control. In June, Japan hosted the ASEAN-Japan Counterterrorism Dialogue. In July, the Japanese government held a seminar on the prevention and crisis management of bioterrorism to strengthen mechanisms to combat CBRN (chemical, biological, radiological, nuclear) terrorism in the Asia Pacific. In attendance were officials from 14 countries and representatives from the World Health Organization, the Institute of Defense and Strategic Studies, and the Southeast Asia Regional Centre for Counterterrorism (SEARCCT). Japan was an active partner in the Proliferation Security Initiative, participating in exercises, attending all meetings for intelligence experts and operational experts, and leading regional outreach efforts. In October, Japan became an initial partner nation in the U.S. Global Initiative to Combat Nuclear Terrorism, and attended its first Global Initiative meeting in Rabat, Morocco. Also in October, Japan hosted a counterterrorism trilateral meeting with the United States and Australia; the following month, these three countries participated in a trilateral strategic dialogue to better synchronize regional activities. Participants from 19 countries discussed measures to tighten nuclear and radiological security at the November International Atomic Energy Agence (IAEA)-Government of Japan Seminar on Strengthening Nuclear Security in Asia. Japan continued to reach beyond the region in its fight against terrorism. In December, the Abe Cabinet approved the extension of Japan Air Self-Defense Force (JSDF) airlift operations until July 2007, enabling Japan to continue its support for Iraq. In October, the Diet extended for one year the Antiterrorism Special Measures Law that allows for JSDF support of Operation Enduring Freedom (OEF). The Japan Maritime Self-Defense Force (JMSDF) provided approximately 124 million gallons of fuel to U.S. and allied naval vessels engaged in OEF. Bilaterally, Japan was a responsive partner in the fight against terrorism. In February, Japanese air marshals trained at the United States Federal Air Marshal Training Facility. Japan remained an advocate and active participant in the International Port Security Program (IPSP). Widely considered a regional leader in maritime security collaboration, the Government of Japan hosted a number of bilateral and multilateral maritime security events. Japan continued its participation in the Port State Control Officer exchange program with the U.S. Coast Guard, which worked to exchange best practices in implementing international ship security requirements. The National Police Agency (NPA) and the Public Security Intelligence Agency (PSIA) continued to monitor the activities of Aum Shinrikyo, renamed Aleph. In January, the Public Security Examination Commission extended PSIA's legal authority to monitor Aleph for an additional three years. The Tokyo District Court, in August, upheld the death sentence for Aum Shinrikyo member Masami Tsuchiya, who was charged with making the sarin nerve gas used in the deadly 1995 attack on the Tokyo subway system. In September, the Supreme Court upheld the death sentence for Aum Shinrikyo founder Chizuo Matsumoto; he is not eligible to file future appeals. In February, the Tokyo High Court upheld the death sentence for Tomomitsu Niimi, convicted in 2002 for murdering 26 individuals in seven Aum Shinrikyo-related cases, including the 1995 sarin attack. The Tokyo District Court sentenced Fusako Shigenobu, a former Japanese Red Army (JRA) member, to 20 years in prison in February. Members of the JRA were responsible for seizing the French Embassy in The Hague in 1974 and the U.S. Embassy in Kuala Lumpur in 1975. Prosecutors argued for a life sentence for Shigenobu, claiming she was the alleged mastermind of the "Hague Incident," but the court ruled that even though she conspired to take over the French Embassy, she was not physically present during the Embassy seizure. As of mid-December, former JRA member Jun Nishikawa remained on trial for his suspected role in a 1977 Japan Airlines hijacking. Korea, North See Chapter 3, State Sponsors of Terrorism. Korea, South The Republic of Korea (ROK) demonstrated excellent law enforcement and intelligence capabilities, and provided terrorism-related training to law enforcement officials from various developing countries. Traditionally focused on potential terrorism from the Democratic People's Republic of Korea (DPRK, or North Korea), the Korean government broadened its attention to possible acts of terror from beyond the Korean Peninsula. Reflecting this shift, the Ministry of Foreign Affairs and Trade (MOFAT), appointed the first Director for International Counterterrorism Cooperation in February. Seoul supported U.S. goals in Afghanistan and maintained the third-largest foreign troop contingent in Iraq, where it has committed $260 million in assistance since 2004. The Korean government remained a valued international partner in the fight against terror financing and money laundering. In December, the Republic of Korea agreed to participate in the Secure Freight Initiative, which will provide screening for radiation of all cargo bound for the United States. On aviation security, the government participated in the International Civil Aviation Organization (ICAO)'s Universal Safety Oversight Audit Program and contributed over 500,000 US$ to ICAO activities. In November, the Republic of Korea joined other APEC member nations in endorsing U.S. security initiatives on aviation security, bioterrorism and food defense, and the protection of commercial and financial sectors from abuse by proliferators of weapons of mass destruction. It also took a number of bilateral antiterrorism measures in the region. In November, the governments of Korea and the Philippines launched a joint study on the development of a national computer emergency response team to combat cyber crime. In December, Korea and Indonesia agreed to continue cooperation against transnational crime, including terrorism and security in the Malaka and Singapore Straits. The Korean government also held bilateral counterterrorism consultations with Australia, Singapore, India, Vietnam, Russia, and China. Korean immigration and law enforcement agencies have an excellent record of tracking suspicious individuals entering their territory and reacting quickly to thwart potential terrorist acts. The government conducted a Man Portable Air Defense System (MANPADS) vulnerability assessment of Incheon International Airport in September, and b
	www.state.gov/s/ct/rls/crt/2006/

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