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As the international community scrambled to respond to the rapid expansion of Daesh (also known as the Islamic State of Iraq and Syria, ISIS) in 2014, it quickly determined to focus on the group’s sources of funding, funding that it used both to strengthen its military capability and (at least initially) make enticing welfare promises to those inhabiting the territory under its expanding control. The group was, as many remarked at the time, ‘tremendously well-funded’ and amassed significant cash reserves as it captured territory, on which were many banks, and exploited the land under its control.
Along with the airstrikes and other military actions directed against Daesh’s sources of funding (oil wells, cottage-industry refineries and tanker convoys) and cash storage facilities, in 2014, the Counter ISIL Finance Group (CIFG) emerged as one of the five lines of effort directed against Daesh. Initially comprising 26 countries (enlarging to 54, as of today), the CIFG had four key objectives: preventing Daesh’s use of the international financial system; countering Daesh’s extortion and exploitation of economic assets and resources; denying Daesh funding from abroad; and preventing Daesh from providing financial or material support to foreign affiliates in an effort to expand its global ambitions. In sum, the regular meetings of this group brought together a diverse group of states with one, singular aim: determine how best to starve the self-styled caliphate of the funds it needed to achieve its objective of ‘remaining and expanding’.
Of course, Daesh is not the first terrorist group to exploit the territory and people under its control. Any terrorist group seeking to maintain its operations will endeavour to identify and exploit sources of funding that are isolated from external disruptive influence, will seek to limit reliance on donations and fickle third-party supporters, and avoid the increasing restrictions applied by banks and money service businesses to the transfer of funds from overseas. Put simply, ‘living off the land’ will always be favoured to relying on external sources and fundraising activities that may be vulnerable to interference.
One such group that has mastered this art is Al-Shabaab, a group whose international profile has, in recent years, been eclipsed by Daesh and whose continued survival has benefited from the diversion of effort by the international community towards fighting Daesh. It would be wrong to suggest that Al-Shabaab has been ignored entirely by the international community. The tempo of airstrikes and other military activity directed against the group by the US has been increasing under President Donald Trump. Yet any coordinated effort against the group’s finances – always somewhat half-hearted in the past – has been non-existent despite the continued evidence of Al-Shabaab’s fundraising activity presented by the newly constituted UN Panel of Experts (PoE) on Somalia.
As the focus on Daesh’s financing is evolving and becoming less systematic and strategic, and more focused on intelligence gathering and tactical interventions, the lessons learned from disrupting the group’s financing, in particular the way in which the international community organised its response, should be applied to a reinvigorated effort to disrupt the financing of Al-Shabaab as the parallels between the financial modus operandi of each group bear considerable similarities.
As the reports of the PoE consistently reveal, along with taxing the population under its control, a core element of Al-Shabaab’s funding comes from trade, specifically the export of charcoal which continues to generate millions of dollars in revenue. Daesh, too, relied on trade-based funding, the response to which by the international community was enforcing the closure of its markets for oil and refined product by destroying infrastructure, disrupting supply lines and pressuring buyers in these markets to desist or face consequences (international sanctions or worse). At its heart, this response involved ensuring the governments of neighbouring countries recognised the role played by their consumers in sustaining the threat posed by Daesh and co-opting them to join a coalition focused on identifying the sources of Daesh’s funding and the means by which these sources could be restricted. A similar strategy is urgently needed in and around Somalia if the unchecked sources of funding of Al-Shabaab are ever to be addressed.
How might this work? Firstly, the threat posed by Al-Shabaab needs to be fully articulated and appreciated. While the group has not achieved the global notoriety of Daesh, it has wreaked havoc in Somalia for years and regularly (directly or by inspiring others) commits atrocities beyond its borders such as attacks on Nairobi’s Dusit hotel complex (January 2019), Garissa University (April 2015) and Nairobi’s Westgate Mall (September 2013) in Kenya; and further back, in Kampala in Uganda during screenings of the final of the 2010 football World Cup fixture. Yet despite this considerable threat, and the listing by the UN of Al-Shabaab under the Somalia sanctions regime – although not under the higher profile and arguably more influential Al-Qa’ida/Daesh regime despite being an affiliate of Al-Qa’ida – the response of states to the group’s financing remains muted. Global forums such as the new annual counter-terror finance gathering, first hosted by French President Emmanuel Macron in Paris in April 2018, should expand their restricted focus on Daesh and Al-Qa’ida, to include not just ‘affiliates’ but to name and prioritise groups such as Al-Shabaab and involve and support affected countries such as Somalia and Kenya. The Financial Action Task Force, the global standard setter on anti-money laundering and counter-terror financing at the direction of the G20, must likewise reflect the fact that terrorist financing threats are not limited to Daesh.
Furthermore, the rebooted PoE must be provided with greater profile and a platform for influence. In contrast to other UN Panels (such as the North Korea PoE) the Somalia reports get little obvious support from global leaders, despite the fact that the same leaders continue to call for a more comprehensive response to terrorist financing.
Finally, and learning from the CIFG experience, a taskforce dedicated to the disruption of the Al-Shabaab’s finances must be established under strong leadership. The US clearly continues to view Al-Shabaab as a meaningful threat, but other countries with stakes in the region such as the UK and neighbouring states such as Kenya – where corruption such as car number plate fraud is alleged to be financing terrorism – must also join in leading this new taskforce. Measures successfully developed by the CIFG such as blacklisting high-risk exchange houses and money service businesses in Daesh-controlled territory and coordinating the restricting of commodity markets (in the Al-Shabaab case, Gulf countries that buy Somalia-sourced charcoal, ignoring the UN-mandated purchase ban) are equally applicable in this case.
In recent years, the global effort to disrupt the financing of terrorist groups has become one dimensional, obsessed only with Daesh. The recent passing of an updated UN Security Council Resolution on suppressing the financing of terrorism is welcome, but it should mark the beginning of expanded and renewed efforts. The survival of Al-Shabaab is due, in no small part, to its unchecked access to funding, funding that will remain plentiful if policymakers fail to exploit the lessons learned from the successful efforts to disrupt Daesh’s funding.
Tom Keatinge is Director of the Centre for Financial Crime and Security Studies at RUSI.
BANNER IMAGE: Al-Shabaab fighters give themselves up to AMISOM forces in Garsale, September 2012. Courtesy of AMISOM Public Information/Flickr/CC0 1.0
The views expressed in this Commentary are the author’s, and do not necessarily reflect those of RUSI or any other institution.