Terrorists raising money in piracy, study says

Counterfeit goods are household items, not entertainment

WASHINGTON — Terrorists are moving into the piracy biz at an alarmingly rapid rate, according to MPAA topper Jack Valenti and a recent report from Interpol.

During a hearing before the Senate Foreign Relations Committee on Wednesday, Valenti cited an April 6 Interpol report examining the links between intellectual property crime and terrorist financing.

“Interpol believes there is a significant link between counterfeiting and terrorism in locations where there are entrenched terrorist groups,” Valenti told the senators, quoting Interpol secretary general Ron Noble.

“How much of the revenues flow to terrorists is hard to measure, but doubtless it is there,” he added.

The report provides ample evidence of terrorist groups reaping windfalls from the sale of counterfeited or pirated goods, and notes that proceeds from these goods are fast becoming their preferred way of raising funds, because risks are low compared with drug running and money laundering, their main profit centers in the past.

Most of the counterfeit goods mentioned in the report, however, are commonplace household items, not entertainment products. For example, the report noted that Danish customs officials have linked the counterfeiting of shampoos, creams, cologne and perfume to Al Qaeda money streams.

Report contains only one example of a terrorist group benefiting from the sale of pirated entertainment products.

In February 2000, an individual who sold pirated music CDs, Sega, Sony and Nintendo game discs was arrested for piracy and suspected fund-raising for a Hizbollah-related org. Images of short films of terrorist attacks and interviews with suicide bombers were among the pirated discs recovered by police. The report claims the discs were “allegedly used as propaganda to generate funds for Hizbollah.” While Interpol now has copies of these films, the individual responsible is still at large.

Several senators were sympathetic to the report’s warnings.

Sen. Bill Nelson (D-Fla.) has some familiarity with the issue. After police broke up a counterfeit goods operation in Florida, he wrote a letter to Homeland Security Dept. Secretary Tom Ridge, asking if there was anything he could to do to shed light on the link between piracy and terrorism.

“Terrorists are able to make a very large profit at a very low risk,” Nelson’s spokesman later explained. “Senator Nelson believes there are serious national security implications.”

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