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The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.

The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) was established by the Economic Community of West African States (ECOWAS) Authority of Heads of State and Government in the year 2000. GIABA is a specialized institution of ECOWAS that is responsible for strengthening the capacity of member states towards the prevention and control of money laundering and terrorist financing in the region.

The Task Force on Money Laundering in Central Africa (Groupe d’Action contre le blanchiment d’Argent en Afrique Centrale (GABAC)) is a body of the Economic and Monetary Community of Central Africa. It was established in 2000 with the mandate to combat money laundering and terrorist financing, assess the compliance of its members against the FATF Standards, provide technical assistance to its member States and facilitate international co-operation.

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In recent years, West Africa has been facing terrorist attacks. The recurrence of attacks, such as the ones in Bamako in November 2015 (at the Radisson hotel), in Abidjan in March 2016 (attack in the seaside resort of Grand-Bassam) and in Ouagadougou in January 2016 (attacks at the Splendid hotel and the café-restaurant Cappuccino), have made the region a “fertile breeding ground” for terrorism. Today, the Sahel is considered one of the most dangerous areas in the world and terrorism has become a real security challenge for states and populations.

WATHI chose this report, jointly carried out by three specialized organizations, because it focuses on the fragility of West and Central Africa as well as reveals the financing methods of terrorist organizations present in the region. The report, based on government sources, indicates in specific cases that terrorist groups such as the Movement for Unity and Jihad in West Africa (Mujao) have used extortion among local populations. In Nigeria, Boko Haram has carried out acts of robbery, looting and aggression to finance their terrorist activities. Abductions against the payment of ransoms are also on the list of terrorist financing sources (AQIM, Mujao and Boko Haram).

The report also refers to other types of funding disclosed by international institutions, researchers and the media, but not always verifiable and confirmed. These activities, considered as potential sources of terrorist financing, range from drug and arms trafficking to trafficking of migrants. Understanding the financing methods of organizations that use terrorism is a major stake in the fight against terrorism.

The porosity of borders in West Africa is a determining factor in the mobility of terrorist groups and in the installation and resurgence of violent terrorist attacks. The report sets out a series of recommendations to combat the financing of terrorism.   

• It seems important therefore that the countries of the zone put in place concerted collaborative actions to strengthen border security and control.

• States should work closely with border communities and the international community as a whole to conduct financial investigations.

• The hostility of the Sahel zone in terms of climatic conditions favors the presence of terrorist groups and their capacity to develop all kinds of activities to finance their actions. To this end, it would be appropriate to set up mechanisms of solidarity to reinforce the failures of States, which are absent in certain areas of their own territory.

In addition to the recommendations mentioned in the report, the countries of the region should make the issue of border control and surveillance a top priority by pooling their defense forces and intelligence systems. The terrorist group Al Qaeda in the Islamic Maghreb (AQIM) in the Sahel and its dissidents are active in several countries and are taking advantage of the difficulties of states to secure their borders. The importance of informal activities in the region also hinders the control of financial flows. Terrorist groups are taking advantage of the States’ difficulties to control the flow of large sums of money and the transfer of funds used in the financing of terrorism.

Selected extracts from the document : 1, 10-13, 16-26

Terrorism is of growing concern for the international community which, in the recent past, has witnessed an increasing number of attacks at the hands of terrorist groups. West and Central Africa are particularly vulnerable to terrorism.

Terrorist organisations are all different in their nature and purpose but they all require resources for self-maintenance, facilitation and funding of various types of attacks. Terrorist financing (TF) may encompass complex financing structures used to conduct large scale attacks or simplistic models used to support small cells and fund smaller attacks.

The report breaks down the threats into confirmed and suspected sources of funding. It appears that Boko Haram is mostly funded locally, while Al-Qaeda affiliates may also be benefiting from foreign donations. While there are indications that terrorist organisations are associated with criminal organisations and with organised crime in the region, there is limited evidence to support these alleged links.

Terrorist organisations are all different in their nature and purpose but they all require resources for self-maintenance, facilitation and funding of various types of attacks. Terrorist financing (TF) may encompass complex financing structures used to conduct large scale attacks or simplistic models used to support small cells and fund smaller attacks.

Terrorist financing (TF) is a serious concern for the international community and a major focus of the FATF Global Network, in particular the Intergovernmental Action Group against Money Laundering in West Africa (GIABA) and task force on money-laundering in Central Africa (GABAC).

Confirmed sources of funding

This section highlights the funding sources of terrorist organisations in West and Central Africa which have been supported by information or case studies provided by government sources.

Extortion

A traditional financing method for groups operating in West and Central Africa is to extort local populations within their area of influence. ‘Taxes’ and fees are paid in return for protection and security. By utilising the threat of violence, terrorist groups extort people conducting normal business or professional activities so they can continue operating (for example, shopkeepers, politicians, fishermen, businessmen27 and banks28). They also profit by taking a portion of the proceeds of illicit activities such as migrant trafficking29 and drug trafficking30.

While it is difficult to ascertain the total amount of funds available to terrorist groups in the region, it appears that extortion is a main source of funding for BH and other terrorist groups in West and Central Africa. However, due to the offensives by countries in the Lake Chad Basin which have led to BH losing territory, this may have become a less important source of income.

Robberies and looting

Groups such as BH actively participate in robbery and looting activities to finance themselves and obtain the necessary goods to survive (attacking vessels, police stations, army barracks, looting small villages and farms and attacking villages during market days to get cash and food items). Robbery and looting was one of BH’s main funding sources during their initial onslaught.

It is harder to prove the participation of other groups in this type of activity. Authorities suspect that AQIM, Al-Mourabitoun and Ansar Dine may also participate in these actions but it can be difficult to prove that a robbery is connected to a terrorist group. In some cases, countries are able to establish a connection with TF such as the links which have been reported by Burkina Faso where there is a suspicion that attacks being perpetrated on goldmines in the north and northwest areas of the country are associated with terrorist organisations. However, these links require further investigation.

Cattle/livestock rustling

Agriculture and livestock were the main income-generating activities for most people in the Chad Basin, before the outbreak of the BH insurgency. Thousands of cows were exported per week to north-east Nigeria from Cameroon and Chad and sold in many markets near the border. Grazing lands were also found along the borders and in the premises of Lake Chad where many seminomadic people settled. Before the insurgency, the price for a medium-sized cow exported to Nigeria ranged between EUR500 to EUR 1,500 with the cattle sent to Lagos or Libreville.

Nigerian authorities have recorded an increase in cattle/livestock rustling activities mainly in the north and north-west of Nigeria that is directly connected to BH. Most attacks occur in remote villages, close to forested regions in the north-west where there is little security presence. These activities are highly profitable for BH but also terrorise the local population and deprive them of their food and livelihoods.

BH uses a number of trading techniques to profit from this activity including: creating its own markets to sell stolen cattle in BH controlled territory  scattering and selling the cattle in smaller numbers (maximum five) at distant markets to avoid detection by authorities selling the cattle in small local markets hiding the cattle in neighbouring countries to be sold at a later stage.

Donations

Funding through Islamic donations continues to be one of the methods abused by designated terrorist groups operating in West and Central Africa. This method requires little infrastructure and is profitable because it manipulates a common practice of the Muslim population in the area.

Often, the use of these donations to commit violent extremism is unknown to the donating population, and regional authorities are unable to control or monitor these movements of money, (commonly comprised of small amounts of cash).

Supporters of extremist groups also knowingly and wilfully finance the activities of the organisation with donations. For example, Niger has observed the collection of cash contributions from traders or businessmen who are sympathisers or members of terrorist groups.

Supporters of extremist groups also knowingly and wilfully finance the activities of the organisation with donations. For example, Niger has observed the collection of cash contributions from traders or businessmen who are sympathisers or members of terrorist groups.

Voluntary contributions also come from supporters abroad. For instance AQIM receives donations from supporters in Europe. Authorities have also provided case studies where funds have suspiciously been transferred to individuals or non-profit organisations (NPOs) associated with designated terrorist groups. Some of the funding is also received from non-profit organisations (NPOs), either with or without their knowledge. It is important to note that, the African diaspora around the world transfers money to Africa for the maintenance of their families who remain in the countries of origin and mainly via MVTS. This is an important inflow of funds for many African countries. However, the same mechanisms are sometimes exploited to finance terrorist organisations and it is difficult for authorities to control this activity.

Local businesses/commercial enterprises

Nigerian authorities have reported that activities such as the sale of farming products at small markets are contributing to the financing of BH. These are small commercial activities, commonly called stalls in local markets where BH supporters sell farming and fishing products and livestock.

Nigerian authorities have also reported that BH provides micro finance to small and medium scale businesses, in turn creating an investment network and increasing the organisation’s financial stability. Authorities suspect BH is developing a business/trading network with recruited experts who act as legitimate frontmen for BH activities. These frontmen faithfully remit agreed sums to the terrorist group through their contact person. BH has also been found to benefit from supporters who are engaged in very small-scale businesses  for example, providing nail-cutting services, supplying water to local residences or are hawkers (selling smoked meat at borders or in traffic jams) – that funnel their profits to BH.

Kidnapping for ransom

While a wealth of open source information exists about potential kidnappings (especially of foreigners) in West and Central Africa, there is less information available about the ransom payments, (i.e. the amounts paid, the conditions of the ransoms, the manner in which the money is transferred to kidnappers and through whom). Little data has been provided by authorities about the number of kidnappings or the amounts paid in ransoms within the region.

Open sources indicate terrorist groups such as AQIM, Al-Qaeda in the Arabian Peninsula (Yemen) and Al-Shabaab (Somalia) have a common protocol for kidnapping but it is not clear whether they actually co-ordinate kidnappings. Open sources suggest terrorists involved in such activity may hire organised criminal groups to hold hostages and negotiate their ransom, with a percentage of the ransom provided to the organised criminal groups in return. Other sources suggest it is not a ‘hiring’ arrangement but that, for the most part, criminal groups capture and sell hostages to terrorist organisations which have publicised their willingness to quickly pay for the victims in cash. These terrorist groups specialise in holding hostages over longer periods of time, negotiating high(er) ransoms, and completing the final hostage payment.

Open sources indicate terrorist groups such as AQIM, Al-Qaeda in the Arabian Peninsula (Yemen) and Al-Shabaab (Somalia) have a common protocol for kidnapping but it is not clear whether they actually co-ordinate kidnappings.

One Egyptian news outlet claims that “ransoms of up to EUR183 million have been paid to free 80 Western tourists in the Sahel-Sahara region in recent years, making hostage-taking one of the main sources of funding for militant groups in Algeria, Mali, Mauritania, Nigeria and Niger.”

While kidnapping has long been a common practice among organisations associated with or affiliated to Al-Qaeda, (for example, AQIM and MUJAO), it appears that for the last few years BH has also increased its kidnapping activities. In addition to raising funds through hostage payments, BH kidnaps people to force or sell women and girls into slavery (including sexual slavery) and to use the hostages to conduct suicide attacks. There have also been reports that BH have abducted women and demanded 40 heads of cattle for the return of each woman. This would indicate that cattle are used as a form of ransom. Furthermore, there have been reports that BH has used kidnapping victims as leverage for seeking the release of BH fighters and have sought ransom payments from governments in the region. For instance, it is reported that, in October 2014, a ransom was paid for the release of the wife of the Cameroonian Deputy Prime Minister and that BH also negotiated for the release of 30 BH prisoners.

Suspected and potential sources of funding

The information presented in this Chapter is based on reports provided by international organisations, academia or other open sources such as the media about potential sources of funding for terrorist groups in West and Central Africa. Discussions with authorities in the region indicate that while these studies and/or information reports are based on solid grounds, they are not necessarily supported by intelligence or case study examples in the relevant jurisdictions. Nonetheless, the sources of funding listed in this Chapter may definitely be used to fund terrorist activities in West and Central Africa.

Illicit trafficking – general background

It has been reported that the area running from the south of the Nafusa  Mountains in western Libya to Ghadames on the Tunisian border is dominated by smugglers and AQIM operatives working in co-operation with local Tuaregs, a group known as “Those Who Sign in Blood” or Al-MouakaouneBiddam and Al-Mourabitoun.

Drug trafficking

There are countless reports written about the connections between terrorists and drug trafficking in Africa, but very few case studies reveal real evidence of their direct involvement.

The West African region is one of the routes preferred by criminal organisations operating in Latin America and Asia to deliver drugs to Europe. It is claimed such activity has escalated so much that one of the routes established by the Colombian cartels along parallel 10 (the 2,600 km that separates Brazil from Senegal) is known as ‘Highway 10’.

While terms such as ‘Narco-terrorist’ or ‘Narco-Salafist’ have been used, it is unlikely that the terrorist groups operating in West and Central Africa have historically been responsible for providing the entire infrastructure necessary to maintain an international drug-trafficking network.

The West African region is one of the routes preferred by criminal organisations operating in Latin America and Asia to deliver drugs to Europe. It is claimed such activity has escalated so much that one of the routes established by the Colombian cartels along parallel 10 (the 2,600 km that separates Brazil from Senegal) is known as ‘Highway 10’.

However, there is some reporting to suggest that illicit drugs may be starting to be manufactured in West and Central Africa. For example, the US Drug Enforcement Administration reports Mexican cartels have set up clandestine drug labs in Nigeria and drug trafficking and money launderingorganisations in West Africa may be led by Lebanese nationals with suspected ties to Hezbollah (note: this group is not listed as a terrorist organisation by the UN).

Trafficking of weapons

Among the security challenges affecting the West and Central African region, weapons’ trafficking is of crucial importance. Since the Libyan crisis of 2011, the proliferation of firearms has increased substantially, facilitating the destabilising activities of numerous armed groups, and undermining the development efforts of a number of West and Central African countries. Previous conflicts in Africa mean that there are a range of weapons available in Africa which have been re-circulated from different conflicts.

In 2014, the GIABA Report, The Nexus between Small Arms and Light Weapons and Money Laundering and Terrorist Financing in West Africa, claimed that profits obtained by groups such as AQIM and BH were derived from arms trafficking.

Trafficking of other goods

Some international intelligence and co-ordination agencies as well as security forces from several countries have reported trafficking of other types of goods by designated terrorists groups in West and Central Africa to finance their activities.

Several authorities mentioned the involvement of armed groups in the illegal wildlife trade, which included poaching and the illegal trafficking of ivory. Authorities also mentioned the illicit trafficking of gold, diamonds, coltan and other minerals by terrorist organisations. Authorities have also claimed that armed groups in Central Africa are involved in the looting of precious stones and metals and the trafficking of ivory. These activities are difficult to detect and while there is intelligence information on these activities as being sources of revenue for terrorist organisations, local authorities cannot always make the connection between such activities and terrorist groups.

Similarly, the legal trading of second hand cars is one of the biggest businesses in Africa. However, in some circumstances, police forces have detected that the drivers were carrying large amounts of cash without adequate justification. The cars circulate throughout the continent and sometimes have seized weapons and other goods hidden inside. Another cause for suspicion is that these vehicles often cross areas controlled by designated terrorist and other violent groups without being attacked.

Smuggling of migrants

Between 2010 and 2014, the number of people intercepted by Italian authorities crossing from Libya to Europe rose from 4 500 to 170 000. While the majority of these people were fleeing from the conflict in Syria, more than 50 000 came from the sub-Saharan Africa region. Each traveller would have paid thousands of dollars to make the journey through Africa.

It is reported designated terrorist groups, such AQIM and MUJAO, may be directly or indirectly involved in people smuggling activities. This either occurs directly or indirectly with terrorist organisations either smuggling small groups of people or simply protecting and facilitating established people smuggling networks in exchange for compensation.

Trafficking in persons

A slave market exists in Nigeria and neighbouring countries and according to the Combatting Terrorism Center at West Point: “Kidnapping has become one of BH’s primary funding sources, a way to extract concessions from the Nigerian state and other governments, and a threat to foreigners and Nigerian government officials.”

BH kidnapped 200 villagers and killed dozens more in Nigeria in one single incident in 2014. According to human rights activists BH also kidnaps women and girls to replace their wives; forcing them to undertake domestic duties offer sexual services. An example of this was the abduction of 219 girls from a school in Chibok, Borno.

BH kidnapped 200 villagers and killed dozens more in Nigeria in one single incident in 2014. According to human rights activists BH also kidnaps women and girls to replace their wives; forcing them to undertake domestic duties offer sexual services. An example of this was the abduction of 219 girls from a school in Chibok, Borno.

Nigeria’s House of Representatives issued a statement in mid-October 2015 indicating approximately 45 000 Nigerians had been kidnapped since 2012. In 2015, Amnesty International estimated that at least 2 000 people have been abducted by BH. Nigeria claims BH forces women into prostitution and that proceeds from these activities are used to fund their operations. Similarly, it is also claimed BH kidnaps children to sell them to potential buyers in neighbouring countries.

Oil smuggling

BH may be funded with money originating from crude oil thefts, with a number of international media outlets mentioning this as a potential financing methodology.

Local news sources also suggest illegal practices such as ‘bunkering’ may be occurring in Central Africa, but a direct connection to BH or Ansaru has not been confirmed at this time.

Cigarette smuggling

The 2013 report on TF in West Africa did not cover cigarette smuggling in detail. Recent media reports suggest designated terrorist groups have been involved in trafficking smuggled cigarettes across the Sahara Desert. Cigarette smuggling in West and North Africa is worth approximately USD 750 billion with smuggled cigarettes making up 80 per cent of the market in some West and North African countries. West Africa serves as a transit route for cigarette smuggling to highdemand countries in the north of Africa. The cigarettes are thought to be produced in China, Vietnam and other Asian countries as well as South East Europe, and transit through customs-free zones, before arriving in ports in West Africa.

Piracy

In 2014, damages from piracy in the Gulf of Guinea were estimated to be about USD 1 billion for the international community. West and Central Africa, and particularly the Gulf of Guinea are home to some of the biggest offshore oilfields in the world. As a result, the profits arising from acts of piracy are lucrative. Maritime crime involves the hijacking of petrochemical tankers and undertaking attacks on oil and petroleum storage and transportation platforms. These activities, however, do not appear to be linked to terrorist organisations operating in West and Central Africa at this stage.

Cybercrime and fraud

Nigeria is particularly vulnerable to identity-related financial crimes which target Nigerians, expatriates and foreign citizens or companies by email in advance-fee scams commonly referred to as ‘419 Scams’. These scams ask victims to provide funds to assist someone in business or financial transactions for a reward or compensation which never arrives.

Despite news and data reflecting fraud and cybercrime as common practices which are on the increase across the globe, currently this activity cannot be linked to terrorist organisations. Authorities note that the majority of these scams are perpetrated by unemployed youths who are not linked to terrorist organisations. Nonetheless, there may be scope for terrorist organisations to adopt these criminal practices to fund their activities or to ‘tax’ the profits of such activity in the future.

Crédit photo : sahel-intelligence.com