Page 36 - An Illusion of Complicity: Terrorism and the Illegal Ivory Trade in East Africa

IEIaI.sFt iAghfrtiicnag Terrorist Funding in

AL-SHABAAB HAS PROVEN itself a flexible and sophisticated organisation. This has allowed
it to effectively adapt in the face of adversity. Its flexibility rests on an ability to grow new
revenue streams when others are cut off in order to support its objectives. Chapter II argues
that ivory is highly unlikely to have become a major component of the group’s total income –
estimated in 2011 to be $70–100 million per annum.1

This chapter takes this finding further, and considers which sources of funding the international
community should prioritise targeting to disrupt Al-Shabaab’s financing. Part of the answer lies in
a more detailed examination of the group’s funding portfolio – and its evolution as international
pressure on the organisation has increased. This evolution has seen the group prioritise funding
streams less exposed to interception.2 Its emphasis has shifted from long-distance sources –
such as diaspora support and external assistance – to more localised sources, such as taxation,
extortion and illicit trade, with significant implications for international responses.3

Diaspora Support and External Assistance

The 1.5 million-strong Somali diaspora –a full 14 per cent of all Somalis – has for decades
sent remittances to relatives and institutions back home. These flows were estimated to be
a minimum of $1.2 billion in 2013,4 but could be as high as $2.3 billion according to the UN
Development Programme.5 They have typically been facilitated by transnational and domestic
money service businesses (MSBs) that form part of the informal and near-untraceable banking
system known as hawala. These companies have weak compliance and supervisory anti-money
laundering/combating the financing of terrorism (AML/CTF) records, increasing their risk of
inadvertently facilitating illicit financial flows in the region.6

1. UNMGSE Report, 18 July 2013, p. 38.
2. Tom Keatinge, ‘The Role of Finance in Defeating Al-Shabaab’, RUSI Whitehall Report 2-14,

December 2014.
3. Valter Vilkko, ‘Al-Shabaab: From External Support to Internal Extraction: A Minor Field Study on

the Financial Support from the Somali Diaspora to Al-Shabaab’, March 2011.
4. Laura Hammond, ‘Family Ties: Remittances and Livelihoods Support in Puntland and Somaliland’,

Food Security and Nutrition Analysis Unit – Somalia’, 5 June 2013, p. 1.
5. Hassan Sheikh and Sally Healy, ‘Somalia’s Missing Millions: The Somali Diaspora and its Role in

Development’, UN Development Programme (UNDP) Somalia, March 2009, p. 1; UNDP, ‘Somalia
Human Development Report 2012: Empowering Youth for Peace and Development’, 2012, p. 25.
6. HM Government and Beechwood International, ‘Safer Corridors Rapid Assessment: Case Study:
Somalia and UK Banking’, September 2013; Financial Action Task Force (FATF), ‘The Role of Hawala
and Other Similar Service Providers in Money Laundering and Terrorist Financing’, FATF/OECD,
2013, p. 9.