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Amazon Intelligence Report CONFIDENTIAL AMAZON INTELLIGENCE REPORT www.TacticalRabbit.com Page 1 of 8 CONFIDENTIAL Intelligence Report/Analysis 3 Country 3 Subject 3 DOI 3 Sources 3 Summary 4 Details 4 Amazon Marketplace 5 Middle Eastern Marketplace 6 Amazon Regulation Failures 7 Conclusions 8 www.TacticalRabbit.com Page 2 of 8 CONFIDENTIAL Intelligence Report/Analysis Use of Amazon Marketplace by Extremist Groups; Failure of Amazon Leadership to Mitigate Terrorist Use of their Platform. Tactical Rabbit October 2019 Country United States/Global Subject Extremist Use of Amazon Marketplace for Malicious Purposes; Failure of Amazon Leadership to Mitigate Terrorist Use of Their Platform DOI 2016 to mid-2019 Sources 1. HUMINT, OSINT, CYBINT, FININT 2. Human sources who have a reliable reporting record and are vetted and validated. 3. Deep dive open source methodologies. 4. Operational experiences of various former CIA intelligence officers. www.TacticalRabbit.com Page 3 of 8 CONFIDENTIAL Summary Tactical Rabbit believes, with a high degree of confidence, that members of foreign terrorist groups and American homegrown violent extremists have and continue to utilize the Amazon Marketplace platform for illicit and malign activities. These activities include fundraising, the movement of money between extremist groups, and the laundering of “dirty” money to clean money. The weak institutional controls and monitoring of the platform by Amazon has allowed individual American homegrown violent extremists and designated foreign terrorist groups such as the Islamic State, Hezbollah, Al-Qaida, and the Islamic Revolutionary Guard Corps to carry out these illegal activities under the guise of what appears to be legitimate buying and selling activity that is the hallmark of Amazon Marketplace. Amazon’s top management is aware of these serious problems with its platform, yet does not take action to attenuate these terrorist illicit activities. Tactical Rabbit assesses that Amazon is witting and complicit in the continued violent and lethal activities of the terrorist groups and extremists who utilize Amazon Marketplace for their malicious purposes. We call upon Amazon to implement new, stronger, and more restrictive regulations, policies, and monitoring to ensure there is minimal extremist use of the platform for illegal activities. If this is not carried out in an acceptable time period, we call upon U.S. government law enforcement and regulatory authorities to launch full investigations into Amazon’s complicity in allowing continued terrorist use of their platform. Details Online marketplaces have become the newest popular form of retail. They are places for multiple buyers and multiple sellers to commence and/or conduct transactions with one another. What makes online marketplaces unique from in-person retail is its ability to connect people who would not have met otherwise. They act as digital middlemen to introduce individuals, regardless of their locations. The online marketplace is classified as "no inventory," meaning that it is merely a platform where users and businesses can meet buyers who want to purchase their products. These marketplaces do benefit from these newfound connections, however. Amazon has expanded its presence to various Middle Eastern countries. Unjust and criminal selling has been fairly unfettered in both the U.S. and the Middle East. A large percentage of this illegal activity occurs due to lax vetting processes on products and sellers approved by the Amazon platform. Amazon does not condone illegal sales and interactions, however, their key flaw is the disconnect between policy and action. Amazon Marketplace www.TacticalRabbit.com Page 4 of 8 CONFIDENTIAL Amazon Marketplace is an e-commerce platform owned and operated by Amazon that enables third-parties to sell new or used products on a fixed-price online marketplace and alongside Amazon's regular offerings. In 2017, Amazon's third-party marketplace sales surpassed the company's direct sales business. In 2018, 66% of the top 10,000 Amazon sellers used FBA service, or Fulfillment by Amazon. Additionally, 53% of paid units sold on Amazon were facilitated by third-party sellers, a trend which maintained an upward trajectory over the last four years. Sellers also have the option to be an FBM seller, (fulfilled by the merchant), where shipping and customer service are handled by the third-party seller. Amazon Marketplace encourages users to sign up for the "Professional Plan" because of the benefits. It costs $39.99 per month and includes Amazon handling customer service, shipping and fulfillment, the ability to sell products in the US, Canada, and/or Mexico, and eligibility for top placement on the product detail page, among other benefits. With each seller paying $39 per month, Amazon Marketplace is generating over $2.8 billion in annual subscription revenue alone, plus a percentage of sales. Utilizing alias information, Tactical Rabbit’s intelligence team was able to create an Amazon Marketplace account with relative ease. The team was able to post a fake or “Ghost” item. This intelligence due diligence process yielded results that terrorists are using Amazon to move money from one cell to another. For example, a Hezbollah cell in the United States will post a fake or “ghost” Rolex then, utilizing coded language, will alert Hezbollah in Lebanon to buy the fake “ghost” Rolex. The money is then transferred from Hezbollah in the Middle East to the terrorist cell in the United States to finance a terrorist attack. The ease of this process demonstrated how this could be duplicated on a large scale if carried out by extremists and terrorist groups. Tactical Rabbit has a high degree of confidence that American homegrown violent extremists, members of designated foreign terrorist groups such as Hezbollah, Al-Qaida, and the Islamic State are using slight variations of their true names and/or aliases to create Amazon Marketplace accounts to carry out illegal terrorist group activities. These activities include selling stolen and counterfeit goods and looted antiquities to generate revenue for future terrorist operations as well as the purchasing of “hard to get” precursor chemicals, supplies, and other materials that these terrorist groups will utilize in future lethal operations. In addition, members of these terrorist groups are effectively transferring and laundering money through a variety of schemes utilizing Amazon Marketplace, including fraudulent sales and trade-based money laundering. Tactical Rabbit can confirm with a high degree of certainty that the Government of Iran’s Islamic Revolutionary Guard Corps Quds Force, who have been directly and indirectly responsible for the deaths of hundreds of U.S. military and diplomatic personnel over the past 20 years, is also utilizing Amazon Marketplace for the same purposes. The groups mentioned above have been officially designated as “foreign terrorist groups” by the U.S. Department of State, and selected members of these groups have also been designated for severe financial sanctions by the U.S. Department of Treasury’s Office of Foreign Assets Control. Middle Eastern Marketplace In 2017, Amazon bought Souq.com to launch its market in Saudi Arabia and Egypt. Souq.com is the biggest online retailer in the Middle Eastern region. Amazon purchased www.TacticalRabbit.com Page 5 of 8 CONFIDENTIAL Souq.com for $580 million to build its international presence. Up until that point, Amazon thrived domestically, but struggled to break into international markets such as China and India. The thousands of businesses who were selling on Souq are now selling on Amazon.ae. UAE businesses of all sizes have the ability to sell, with Amazon offering to fulfill thousands of shipments to all seven emirates. It is not known whether Amazon took any serious measures to vet the sellers who were already present on Souq when they purchased it. While Amazon.ae, the UAE Marketplace, is operated directly through Amazon, Souq continues to take orders from neighboring markets such as Saudi Arabia and Egypt through separate, non-Amazon affiliated websites. Amazon Regulation Failures In February, Amazon admitted that it was having a problem with counterfeit products. In its terms, it states that it could be liable for certain things: "Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers’ descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies." For its monthly subscription fee, sellers from across the globe are utilizing Amazon Marketplace to sell merchandise to buyers in the USA, Canada, Europe, and other locations, allowing many to circumvent the product sourcing rules, regulations, and protocols designed to protect consumers and workers. According to an article in Forbes, Amazon states that all its Marketplace sellers “must follow [their] selling guidelines and those who do not will be subject to action including potential removal of their account.” However, it is unclear whether Amazon has any mechanism to enforce, verify, or audit compliance with the published regulations. The company primarily relies on the sellers to comply with its rules and has a more lax approach
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