Al-Qaeda operations are rather cheap.

Many financial experts assembled in Stockholm, Sweden to discuss methods of cutting off the funding streams to al-Qaeda. One of the murkiest fronts in the war on terrorism was being tackled this week in Stockholm. As al-Qaeda and its affiliates continue to diversify their sources of money, choking off their financial lifelines has become a top priority. The organisers, from an independent body called the Financial Action Task Force, say that regulating mainstream financial institutions no longer presents much of a problem. Instead, they are turning their attention to charities and to unregulated systems, such as hawalas, a popular method of transferring money in the Gulf and South Asia(South Asia) that leaves almost no paper trail. The smaller the sums involved, the bigger the problem for the regulators. They can walk into a hawala broker in say, Karachi, and hand over the money in cash. The broker makes a phone call to the recipient's nearest hawala dealer, who simply pays him from his own account. It is all done on trust, handwritten records are kept but the money never moves through the banking system. Before September 11, 2001, al-Qaeda had no need for hawalas. Charities also offer a way. Islam requires every Muslim to make an annual donation equivalent to 2.5 percent of savings. The Saudis, who give generously -- over $250 million a year -- are now regulating charities, banning them from sending money abroad without permission. Other methods include money laundering, credit-card fraud and petty theft, all areas that Europe-based groups sympathetic to al-Qaeda are thought to have moved into in the past two years.