Terrorism Financing in North Africa

By Jean-Charles Brisard, ACD Advisor
Thursday, November 28th, 2013 @ 5:58AM

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Introduction:

Financial resources and funding methods of the North African terrorist organizations have been largely influenced by two factors.

The first is their longtime strategic and tactical independence. Despite the fact that several of these organizations emerged in the aftermath of the Afghan conflict, including the historical GSPC – Salafist Group for Preaching and Combat (now AQIM), the LIFG and the MICG to name a few, they have mostly followed a regional agenda since their inception. While traditional financial resources have declined, post 9/11, including support from charities and individual donations, these groups had already shifted to more local sources of revenue generated from various traffics in the Sahara and Sahel regions, the most common being cigarettes, cars and arms. This is not say that charities have disappeared. Qatari and Saudi charities are active in Mali and provided support to the jihadists, especially to Ansar Dine and the Mujao.

Drug trafficking is repeatedly mentioned as a source of revenue for these groups, but various investigations reflect the fact that none of them were directly involved in this traffic. Instead, they indirectly benefited from drug trafficking by receiving payments, protection money, to allow dealers to freely move in the regions they controlled.

The second most recent and significant factor has been the changing nature of Al Qaeda from a centralized organization able to direct and finance its affiliates toward a decentralized network of autonomous groups and cells, where most of them have been forced to find new and mostly local or regional financial resources, and become self-sustained.

The K&R business

With regard to North African terrorist organizations, we have observed a direct link between the weakening of Al Qaeda Central and the development of Kidnap for Ransom as a mean of financing terrorism in the Sahel region.

Kidnap-for-ransom is not new, but becomes an increasingly significant source of funding for many terrorist organizations.

Apart from acts of piracy at sea, especially in the Gulf of Aden and the Indian Ocean, abductions have become, by their financial and political implications, real issues for the international security.

Although it has long been considered as an “alternative source of terrorism financing” for terrorist organizations associated to activities of criminal groups, hostage taking today provides a substantial, if not most of the financial resources of several terrorist organizations.  

Elsewhere, in the Philippines, kidnap-for-ransom has been a significant source of revenues for the Abu Sayyaf organization. In a single operation, the abduction of 20 tourists, the organization managed to secure more than $10 million.

The most achieved example of that trend is illustrated by the strategy of Al Qaeda in the Islamic Maghreb (AQIM), its affiliates and allies.

AQIM and its predecessors the Algerian GSPC and GIA had a long history of hostage taking in Algeria during the 90s, targeting families of political figures and businessmen with only a few examples of actions against Western targets.

This trend really emerged in the region in February 2003, when AQIM commander Abderrazak El Para first launched a major hostage taking campaign targeting foreign tourists in the Southern Algerian Sahara. 32 of them were kidnapped and most of them release after several European governments paid ransoms.

Since then, AQIM has developed a growing K&R criminal industry that sustains itself through huge ransoms. It provides unlimited funds to the terrorist organization itself, and entertains a series of intermediaries, subcontractors, spies and agents, including criminal groups or simple tribes’ sympathizers who raise money through this business. For example, intermediaries chosen or accepted by the terrorist group to negotiate the release of Western hostages usually receive a percentage ranging between 10% to 50% of the total negotiated ransom.

This source of funding has become a strategic goal for terrorist groups in North Africa.

A member of the Mokhtar Belmokhtar brigade recently interrogated by the Mauritanian authorities provided an extensive testimony on this massive hunt for Westerners in the Sahel region. The combatant details the use of informants in big cities, the role of subcontractors kidnapping Westerners on behalf of AQIM, and the usage of the funds. For this single brigade of 40 combatants, the K&R business has been able to fund eight SUVs, some equipped with SAMs, several trucks, sophisticated telecommunication equipment, arms, ammunitions and explosive components, including ammonium nitrate. It is not a surprise to hear that “kidnapping is the main objective of the brigade”. Ransoms also allows the brigade to pay local tribes leaders to gain their protection and expand its safe havens in the region.

By aggregating terrorist groups statements, interrogations of operatives and witness accounts, the kidnap-for-ransom business in the Sahel region alone, generated 89M€ ($120M) since 2008, in only 5 years. For AQIM alone, more than 90% of the group’s funding today derives from this single financial source.

Organization

K&R funds (2008-2013)

AQIM

65M€ ($88M)

MUJAO

15M€ ($20M)

ANSAR DINE

5M€ ($6.8M)

BOKO-HARAM/ANSARU

4M€ ($5.5M)

TOTAL

89M€ ($120M)

The kidnapping business is so lucrative, that hostage takings in the Sahel region have increased by 150% between 2008 and 2013, with an average ransom for the release of a Western hostage of $6.5 million.

Last year, the French government rejected a request from AQIM, asking for more than 70M€ ($95 million) for the release of four French hostages, but finally indirectly paid this year 25M€ ($34M).

The annual fund generation of the K&R business in the Sahel Region has risen by 1,000% in 5 years.

2008

2,5M€ ($3.4M)

2009

8M€ ($10.8M)

2010

11,6M€ ($15.6M)

2011

12,5M€ ($16.9M)

2012

25M€ ($33.8M)

2013

29M€ ($39M)

The number of Westerners kidnapped in the region is also on the rise, from 4 in 2008 to 17 until now for 2013, not counting the massive hostage taking of In Amenas in Algeria in January of this year, when 37 Westerners were kidnapped.

The price paid per hostage is subject to a major inflation, from 1M€ in 2008 to 5M€ in 2013.

AQIM is raising annually more than 12.5M€ ($17M) from the K&R business. This makes today this organization richer than Al Qaeda Central whose annual income is estimated by U.S. officials to be between $5M and $10M.

A new trend for regional and international terrorist organizations

Therefore, it’s not a surprise to hear Ayman Al Zawahiri, the head of Al Qaeda, calling on Muslims twice in 2012 to (quote) “capture citizens of the countries that wage wars against Muslims”.

The significance of the industrialization of the K&R business has led, on a more regional perspective, to the fragmentation of the threat and the emergence of new groups or factions using the same methods, increasing the threat of kidnapping. They include the following:

-        AQIM commander Mokhtar Belmokhtar’s decision in December 2012 to create a dissident organization, the Brigade of “Those who sign with blood”, responsible for the hostage taking of the In Amenas gas facility.

-        The Movement for Unicity and Jihad in West Africa (MUJAO), a local affiliate of AQIM in Mali created at the end of 2011.

-        The Ansar Dine group, created in 2012 by Tuaregs led by a former hostage negotiator in the region.

-        Ansaru, an offshoot of the Boko Haram organization in Nigeria, dedicated to targeting Western targets.

Increased regional strategic & operational cooperation

This trend has also led to increased strategic and operational cooperation between terrorist groups in the region, and to changes in the tactics and modus operandi of several groups

A major example is provided by the case of the Nigerian Boko-Haram organization. Since its inception in 2002, the group focused its operations on Nigeria. The group was mainly financed by external funds from Islamic charities based in the UK and Saudi Arabia. In addition, Boko Haram extensively relied on extortion inside Nigeria.

With the decrease of the external sources of funds, due to international investigations, Boko Haram moved closer to its ally and cooperation with AQIM began in 2010, the later providing military training and funds to the group. Then in 2012, the group publicly supported AQIM against the French intervention in Northern Mali and later Boko-Haram combatants joined the war in Mali in 2013.

By then, the group had already adopted AQIM methods and objectives. In January 2012, the group kidnapped a German contractor in Nigeria, but it was AQIM that publicized and claimed responsibility for the abduction in March 2012. The hostage was later killed during a failed assault by the Nigerian forces.

Then in 2013, during the French intervention in Northern Mali, Boko Haram called for retaliations against French citizens and interests in the region. In less than a year, the group and its offshoot Ansaru have captured 16 Westerners, including 9 French citizens, 8 of them in Cameroun, outside of their original area of operation.

Public dissent doesn’t mean absence of cooperation, as illustrated by the kidnapping, only days ago, of a French priest in Northern Cameroun by both Boko Haram and Ansaru.

Another example of this extensive regional cooperation was provided by the hostage taking operation at the In Amenas gas facility. This action was also the result of a co-production between the newly formed Belmokhtar brigade, members of an Algerian Islamist group called the “Sons of the Sahara for Islamic Justice” and Libyan operatives.

Finally, signs of increased operational cooperation have emerged between Libyan jihadists of Ansar Al Sharia, and AQIM, including the provision of arms suspected to be part of the former Qaddafi arsenal.

The K&R business is not the only factor explaining the current reshuffling of the jihadist map in the region (other factors include the Libyan regime fallout, and the French-African offensive in Northern Mali) but it certainly contribute to accelerate these evolutions.

The International Response to K&R in North Africa

This new terror business not only provides terrorist groups with the ability to acquire sophisticated weapons, logistics and recruitment tools in a way that raises a major international security concern, it also fundamentally questions our ability to fight terrorism financing if hostage-countries agree to pay ransoms to terrorist groups or to meet their combined requests for the release of terrorist detainees in exchange for the release of hostages. In 5 years, no less than 20 detainees of these groups have been released as part of such transactions.

Until now, the international community has only provided a limited response to this growing and pressing challenge to its legal framework.

In December 2009, the UN Security Council adopted Resolution 1904 (2009) confirming that the ban on funds, financial assets and economic resources fully applies to the payment of ransoms to individuals, groups, undertaking or entities on the sanctions list. But, while the payment of ransoms now falls under the general prohibition of terrorism financing, no specific measure or sanction has been implemented since then to deter that practice.

It is worth mentioning that despite its positive aspects, Resolution 1904 (2009) only sets a principle which is easily bypassed by terrorist organizations and Western governments.

  • Terrorist organizations have been encouraged to innovate by using proxies and sub-contractors in the organized crime (this was the case, for example with the abduction of French citizens Pierre Camatte in 2009 and Michel Germaneau in 2010, and also in the case of the kidnapping of 3 Spanish and 2 Italian in 2009)
  • Western governments are relying on third-parties such as private companies, insurance companies and foreign governments that would later be compensated through national or international financial instruments in order to avoid direct payments to a designated entity and to continue claiming that they officially don’t pay ransoms to terrorists.

This resolution and its implications, if implemented, could pose a moral and political problem to governments that still pay ransoms but also a legal problem to financial institutions intervening directly or indirectly in the payment process.

Furthermore, existing international conventions such as the International Convention against the Taking of Hostages of 1979 and the International Convention for the Suppression of Terrorism Financing of 2002 do not address the specific issue of kidnap-for-ransom.

The question becomes crucial for the future of the international fight against terrorism financing. In July 2009, the African Union called for the criminalization of the payment of ransoms, while many countries who officially ban this practice, continue to indirectly provide ransoms to terrorist groups through thirds-countries or subcontractors of these groups. Many African governments led by Algeria, are strongly advocating against the payment of ransoms to terrorist groups.

On December 14, 2012, the Global Counterterrorism Forum (GCTF) meeting in Abu Dhabi adopted the “Algiers Memorandum on best practices in the prevention of kidnappings for ransom by terrorists and denying hostage takers the benefits of ransom”.

During their meeting in June 2013, G8 members also called to stop paying ransoms. The final communiqué states, “We are committed to protecting our nationals and reducing terrorist groups’ access to funding which allows them to thrive. We unequivocally reject the payment of ransoms to terrorists and we call on countries and companies around the world to follow our lead and stamp out this as well as other lucrative sources of income for terrorists. We will help each other to resolve hostage incidents by sharing best practice in advance and offering expertise as necessary when they take place.”

Still, despite these public statements and efforts, we can predict that without appropriate national criminalization and sanctions, ransoms will continue to be a major source of funding for these groups.

International response still needs to show effectiveness in order to cope with the complexities involved by this phenomenon.

At the regional level, AQIM has taken advantage of weak state control in several Sahel countries and the porous desert borders to establish safe havens and develop itself. K&R is not only a major source of funding for the group, its affiliates and allies. It’s also a source of expansion of terrorism becoming increasingly a source of regional instability.

 Mr. Brissard, Member of the Board of Advisors, American Center for Democracy (ACD), he presented this paper on behalf on ACD, to The Advanced Research Workshop on Terrorism in North Africa, at the NATO CENTER OF EXCELLENCE – DEFENSE AGAINST TERRORISM in ANKARA, on NOVEMBER 19, 2013. He was also, Former Chief Investigator for the 9/11 families

 

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