Page 42 - An Illusion of Complicity: Terrorism and the Illegal Ivory Trade in East Africa

Tom Maguire and Cathy Haenlein 29

This sugar is believed to be sold by OCGs from warehouses in Garissa, Dadaab, Wajir and
Mandera at rates that undercut legal, taxed sugar – generating large proceeds.43 Since 2013,
officials in northern Kenya have claimed to have evidence that Al-Shabaab is profiting from
the trade by charging the OCGs involved protection fees.44 There is little knowledge about the
precise dynamics of this activity, with the extent to which Al-Shabaab profits as yet unclear.
Estimates, however, value this income source in the low millions of dollars, signifying a potentially
substantial additional revenue stream.45

Restricting Al-Shabaab Financing

Targeting the finances of terrorist groups has become a cornerstone of global efforts to
disrupt these organisations.46 The evolving nature of Al-Shabaab’s funding capability speaks
to the need to maintain pressure on all of its income streams simultaneously. As noted above,
efforts on multiple fronts – from AML/CTF pressure, to enforcement of the ban on charcoal,
and strengthened powers of naval interdiction47 – have been a feature of the international
response.48 Yet more still needs to be done to restrict the group’s ongoing revenue generation.
Here, attention must be paid to weaknesses in the current response, which Al-Shabaab could
exploit as it continues to adapt and evolve.

The first of these weaknesses relates to the current international response to diaspora
remittances. As detailed above, greater efforts to prosecute those knowingly remitting funds
to Al-Shabaab49 and a ratcheting up of AML/CTF pressure, amongst other factors, have had a
marked impact on the funding wired directly by sympathetic Somalis abroad.50 However, Al-
Shabaab has continued to find ways to benefit from funds innocently sent home by diaspora
members – intercepting funds through taxation and extortion of recipients. The closure of MSB
accounts by key international banks may now reduce the scope for this form of intervention.51

43. Bonface Ongeri, ‘Al-Shabaab Joins Illicit Sugar Trade’, Daily Nation, 12 July 2014; International
Business Times, ‘Al-Shabab’s Finances: The Militant Group Gets Funding From Local Businesses,
Sources Abroad’, 4 September 2014; Nation Team, ‘Al-Shabaab-Linked Sugar Smugglers Still in
Business After Attack’, Daily Nation, 24 April 2015; Drazen Jorgic, ‘Kenya Wages War on Smugglers
who Fund Somali Militants’, Reuters, 21 June 2015.

44. Ongeri, ‘Al-Shabaab Joins Illicit Sugar Trade’.
45. Jorgic, ‘Kenya Wages War on Smugglers Who Fund Somali Militants’.
46. This came particularly with George W Bush’s Executive Order 13224 of 23 September 2001 aimed

at starving terrorists of funding. See US Treasury Department, ‘Contributions by the Department of
the Treasury to the Financial War on Terrorism: Fact Sheet’, 2002, p. 2.
47. UN Security Council, ‘Adopting Resolution 2182 (2014), Security Council Extends Mandate of
African Union Mission in Somalia for One Year, Amends Sanctions Regime’.
48. Authors’ interview with UNODC officials 1 and 2.
49. Jones, ‘Operation Rhino’.
50. Keatinge, ‘The Role of Finance in Defeating Al-Shabaab’, p. 12.
51. Armin Rosen, ‘A California Bank’s Decision Could Have Huge Ramifications in Somalia’, Business
Insider UK, 31 January 2015.