Calls Grow to Dismantle Terrorists’ Financial Networks

ADF STAFF

Terrorist organizations need a constant stream of money to function, and a growing body of evidence suggests they get this funding by trafficking natural resources.

Oil, gas, wildlife, timber, and minerals such as gold, diamonds and coltan are all items that terrorist groups exploit to finance their operations. Terrorists often benefit from weak regulations, lack of transparency and blatant corruption in the countries where they secure those resources.

As they fund their own operations with illicit trading, terrorist groups starve local economies of cash and threaten regional security, according to an analysis by South Africa’s Institute for Security Studies.

The problem, according to ISS’s East Africa Director Paul-Simon Handy, is growing while too many governments sit idle.

“Systems and procedures are in place,” Handy recently told the United Nations Security Council. “But political responses are failing through a crisis of inaction.”

Handy has urged African countries to work together to combat criminal activities that are transnational as terrorist groups and the natural resources that finance them freely cross the continent’s often porous international borders.

In many cases, illegally acquired resources are laundered by mixing them with legal materials or mislabeling them with the help of corrupt government officials to make them appear legal. Rosewood, one of the most trafficked natural resources, is an example of a resource that is laundered in that way.

During its turn chairing the Security Council in October 2022, Gabon’s U.N. representative called for greater action to dismantle terrorist financing, particularly where natural resource trafficking is concerned.

Gabonese Minister of Foreign Affairs Michael Moussa Adamo emphasized that fighting the trafficking of natural resources in Africa is critical to preventing conflicts across the continent.

The illicit trafficking of natural resources by terrorist groups is a major issue in the Central African Republic, the Democratic Republic of the Congo and Mali, among other countries, according to Gabon’s brief to the Security Council.

Gabon has suggested several steps to curtail terrorists’ ability to fund their operations by exploiting natural resources. The list includes:

• Adding a financial component to investigations involving wildlife and natural resource trafficking.
• Strengthening governmental agencies that work on money-laundering and terrorism financing.
• Sharing information and analysis regarding terrorist financial and resource trafficking regionally and internationally.
• Boosting public-private cooperation when it comes to inspecting and validating natural resource supply chains.

More attention also must be paid to the way in which terrorist groups used stolen natural resources as currency — depositing them in underground banks at one end of a financial chain and receiving cash at the other, according to the U4 Anti-Corruption Resource Centre.

Terrorist groups have a lot in common with organized crime cartels, both in their decentralized operations and in the way they finance their activities, according to U4.

“Not only do they thrive from the same (unlawful) contextual circumstances, but terrorists and criminal networks are also becoming harder to separate from each other,” U4 analysts wrote in a study of terrorist financing.

The situation demands greater cooperation among countries, according to Handy.

“Individual state action is insufficient to combat transnational crime,” Handy told the U.N. “So, we require more international cooperation and increased administrative, security and judicial capacity in governments.”