US embassy cable - 02KATHMANDU2254

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, Maoist Insurgency 
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