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By Sasha Rosshandler
On the 14th September 2017, the Henry Jackson Society hosted Loretta Napoleoni in a talk chaired by our senior research fellow, Nikita Malik. Ms Napoleoni addressed the audience diligently in regards to the operational financing of Al-Qaeda in the Islamic Naghreb, as well as Islamic State and the Jihadi fighters in Asia and the Middle East. As an expert in the field of terrorist financing, Ms Napoleoni provided an insight into how terrorists have changed their strategy in regards to finance since the changes to foreign policy implemented shortly after the events of September 11th 2001. Her new book titled Merchants of Men: How Kidnapping, Ransom and Trafficking Funds Terrorism And Isis is testament to her work as chairperson of the counter-terrorism financing group for the Club de Madrid.
Ms Napoleoni began her talk by explaining that with terror groups originally financing themselves via the drugs trade that regularly flowed through America to Western African states such as the destabalised Guinea-Bissau, the US’s implementation of the Patriot Act (2001) meant that powers to banks were extended, allowing them to investigate any transaction involving the US dollar regardless of where the transaction took place. Consequentially, terror organisations quickly changed their currency of choice to the euro that has no such limitations, and therefore the drugs trade became an obsolete method of financing terror and a new method was implemented.
As a result of unstable governance in large swathes of Western Africa, the various networks of smugglers that had been working for drug cartels in the Sahel region now found that kidnapping foreign nationals was a key way to finance their operations. With Western states unwilling to publically document the fact that they were negotiating with and paying the enemy for the release of their citizens, tourism to these areas remained largely unaffected, allowing terror groups to easily find their victims, gaining up to $8million per detainee. Ms Napoleoni has documented how Italy spent almost 1% of their entire GDP for 2014 in securing the release of two Italians kidnapped in Syria. Furthermore at its peak, ransoms were affording the second highest stream of national income to Somalia, highlighting the significant sums of money that were received for foreign nationals’ release, and the importance of keeping them alive throughout the process.
However, Ms Napoleoni stated how this mode of income was also a short-term opportunity for terror groups. With the eventual loss of tourism to West Africa and various Middle Eastern states, terror groups have turned their attention to the kidnapping of soldiers who would have a higher ransom, or to human trafficking; a source of constant income considering the attempts of African migrants to reach mainland Europe with Syria and Turkey being the gateway, whilst a tiny proportion of Islamic State’s income, around $0.5million a day are made through trafficking alone.
Ms Napoleoni concluded by explaining that the importance of keeping hostages alive is no longer apparent, with Islamic State now using the killings of these hostages as propaganda for their next generation of militant fighters. With no idea of how terror organisations may find their funds for the future, it is clear that, for Islamic State at least, their occupation of Syrian oilfields is vital to their continuity.