Treasury Dept. Can Play Critical Role in Helping Somalia Disrupt Al-Shabaab Fundraising

Washington, D.C., June 28, 2017 – The U.S. Treasury Department can play a critical role in helping Somalia – recently designated as an “area of hostilities” by President Trump – disrupt the fundraising abilities of al-Shabaab, the Somalia-based branch of al-Qaeda that has terrorized the African nation for over a decade, according to a new report from the Foundation for Defense of Democracies.

The report, “Al-Shabaab: Financial Assessment,” finds that al-Shabaab controls less territory and fewer ports than it has in prior years, but that the terror group will likely be able to sustain itself by exploiting the country’s economic activity, particularly as the African Union Mission to Somalia (AMISOM) campaign draws down. Based on FDD’s estimates, al-Shabaab most likely generates tens of millions of dollars a year in revenue, but earned up to $100 million a year as late as 2011, before AMISOM recaptured much of southern Somalia.

To assist in Somalia’s counter-terror financing efforts, Treasury can help Somalia formalize its financial system and make it more difficult for funds to reach al-Shabaab through poorly-regulated remittance flows.

Additionally, with the prevalence of mobile banking, Treasury should assist Somali authorities in developing monitoring systems and procedures for mobile transactions, and strengthen Somalia’s financial intelligence unit through training and personnel exchanges to develop anti-money laundering and combatting the financing of terrorism (AML/CFT) systems in the Somali finance sector.

Lead author Yaya J. Fanusie finds that in early 2017 al-Shabaab began to expand following the withdrawal of Ethiopian troops supporting the AMISOM mission. Al-Shabaab is active in Kenya, around Mogadishu, and in rural areas in southern Somalia. The group recently shifted some operations to northern Somalia, likely to deepen ties to al-Qaeda in the Arabian Peninsula (AQAP).

Fanusie, a former CIA economic and counterterrorism analyst, writes that the UN has identified multiple individuals in Somalia who provide al-Shabaab a financial lifeline by facilitating the illicit charcoal trade, but that the international body has yet to sanction them.  The report recommends that the U.S. and the UN sanction these financial facilitators.

“Al-Shabaab: Financial Assessment” is the fourth part of “The Terror Finance Briefing Book,” produced by FDD’s Center on Sanctions and Illicit Finance (CSIF). The three previous assessments include: “Islamic State: Financial Assessment,” “Boko Haram: Financial Assessment,” and “Al-Qaeda’s Branch in Syria: Financial Assessment.” These assessments detail the key financial strengths and vulnerabilities of top terror groups, highlight possible “wildcard” scenarios which could impact future funding, and specific actions the United States should take to disrupt them.

When completed, “The Terror Finance Briefing Book” will be accompanied by CSIF’s Terrorism Designees Database. Until now, there has been no public database where researchers could quickly sort terrorism designees by nationality and organization.

Each report will be published with an appendix listing designated individuals and entities affiliated with the respective group.

### 

For more information, contact [email protected] or 202.403.2904.

About FDD:

The Foundation for Defense of Democracies (FDD) is a Washington, DC-based non-partisan policy institute focusing on foreign policy and national security. Visit our website at www.defenddemocracy.org and connect with us on Twitter, Facebook, and YouTube.