Crisis hotspots and Africa’s security (5)
Dr. Olukayode Oyeleye, Business a.m.’s Editorial Advisor, who graduated in veterinary medicine from the University of Ibadan, Nigeria, before establishing himself in science and public policy journalism and communication, also has a postgraduate diploma in public administration, and is a former special adviser to two former Nigerian ministers of agriculture. He specialises in development and policy issues in the areas of food, trade and competition, security, governance, environment and innovation, politics and emerging economies.
November 21, 2022808 views0 comments
TERRORISM AND TERRORISTS have become a global phenomenon. Despite the widespread disapproval of their existence and activities, they grow and expand in influence nonetheless. They thrive and flourish despite the havoc they wreak everywhere they operate in, leaving footprints of deaths, destructions and socio-economic crisis behind. They thrive on money. Those involved in terrorism don’t operate in isolation. They have links within and outside their areas of operations, transcending political boundaries of nations, regions and continents. Through such links, they exploit weaknesses within the local and international systems of government, business, religion and tribe. Terrorist groups need money to sustain themselves and to carry out terrorist acts. They have therefore devised diverse means and methods of fundraising to sustain and expand their activities and territories. While some of their means of fundraising are illegal and covert, some are legal and overt. Their methods involve the solicitation, collection, provision or transfer of funds with the purpose of using them to support terrorist acts or groups.
Some of the legitimate sources of terrorism finance are profits from businesses and charitable organisations, taxes and levies. Illegal activities providing funds for terrorists include trafficking in humans, weapons or drugs, kidnapping for ransom and – in some celebrated cases – active involvement in businesses that generate huge funds as in opium production in Afghanistan, mostly informal. While attention has been mostly focused on these informal avenues of fundraising, not too many were aware of the more organised and formal channels, especially involving multinationals or state actors. Take Syria’s case. It took a website run by a Syrian opposition group to publish in 2016, revealing an egregious act of a multinational alleged to have been involved in dealings suspected to have been terrorism financing. Lafarge S.A., a French industrial company specialising in cement, construction aggregates, and concrete, is the world’s largest cement manufacturer, headquartered in Paris, France, opened its plant in Jalabiya near the Turkish border in 2010 following a $680 million investment, according to the firm’s history. Eyebrows were raised on what was later regarded as complicity in crimes against humanity and endangering lives in Syria.
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Before Lafarge eventually evacuated the plant in September 2014, when Islamic State took control of the town and the factory, the firm’s Syrian subsidiary had reportedly paid Islamic State and another terror group, al Nusra Front, the equivalent of $5.92 million – in what its executives described as “taxes” – to protect staff at the plant as the country’s civil war intensified. It was also reported – in what looked like quid pro quo – that the settlements helped Lafarge to carry out $70.3 million in sales subsequently. The act, which amounted to bribery, was reportedly concealed from Holcim as well as external auditors during the process of merger, although Lafarge was said to have previously admitted bribes were paid after an internal investigation. Cement giant LafargeHolcim – the product of the merger, which took place in 2015 – had to make a point that the Syrian saga occurred before the merger. The Holcim Group was then known as Holcim Limited, a Swiss multinational company that manufactures building materials. To clear Holcim’s name, the Lafarge’s new owner had to state that none of the egregious conducts involved Holcim, “which has never operated in Syria.”
A prima facie case has thus been established about the involvement of a multinational in funding a terrorist group in Syria and the first time a private company had pleaded guilty in the US to aiding terrorists. A month ago, in the US, Lafarge pleaded guilty to a one-count criminal charge of supporting the Islamic State and other terror groups and agreed to a $777.8 million (£687.2 million) penalty for payments it made to keep a factory running in Syria after war broke out in 2011, although it said it “deeply regretted” the events and “accepted responsibility for the individual executives involved.” It now becomes clearer how terrorism spreads and how their operations are financed. The extent to which terrorists go in financing their operations looks broader than what is generally known to many observes. The International Monetary Fund (IMF) has expressed concerns about the possible consequences of money laundering and the financing of terrorism on its members’ economies. “These include risks to the soundness and stability of financial institutions and financial systems, increased volatility of international capital flows, and a dampening effect on foreign direct investment.” The IMF noted that the “problem is global,” stating that money launderers and terrorist financiers exploit loopholes and differences among national anti-money laundering (AML) or combating the financing of terrorism (CFT) systems and move their funds to or through jurisdictions with weak or ineffective legal and institutional frameworks. In practice, they actually abuse Offshore Financial Centres (OFC) that combat the financing of terrorism (CFT).
The war in Syria has provided an opportunity and breeding grounds for global terrorism. There could have been many more firms that took the same “unacceptable” measures in order to keep their operations open and protect employees under the same circumstance like Lafarge did in 2011 for its plant in Syria. That development was a turning point. The quantum of money accruing to the terrorists then could best be imagined as various armed factions controlled or sought to control the area at the time, as President Bashar al-Assad’s government lost control of large swathes of the country to various armed groups then. Grave implications have been inferred from Lafarge’s complicity as indicated in the recent court pronouncement against it in the US. It stated that “the defendants paid millions of dollars [to Islamic State], a terrorist group that otherwise operated on a shoestring budget, millions of dollars that [Islamic State] could use to recruit members, wage war against governments, and conduct brutal terrorist attacks worldwide, including against US citizens.” To save face, Lafarge executives had reportedly attempted to require Islamic State not to include the name “Lafarge” on documents memorialising and implementing their agreements and many involved in the scheme also used personal email addresses instead of their corporate email addresses to carry out the conspiracy, according to US sources. Lafarge executives also allegedly backdated the termination agreement to Aug. 18, 2014, a date shortly after the United Nations Security Council had issued a resolution calling on member states to prohibit doing business with Islamic State. That was to falsely suggest that negotiations with Islamic State had not occurred after the UN resolution.
African countries are major victims of the spillover effects of terrorism financing and, obviously, much of such finds emanate from the Middle East. The poor operating procedures of African financial institutions have aided the flow of funds from the big terrorist organisations to their burgeoning allies in Africa. This emboldens them on their scales of operations, the size of their prizes and their ease of territorial expansion. They have taken advantage of rural poverty and the vacuum created by the scant presence of government in the rural areas to establish recruitment and training grounds from where they launch out deadly attacks on urban populations. Nigeria is one country in which terrorist activities have grown and is spreading so rapidly that all parts of the country are now prone to terrorist attacks, up from three states about eight years ago. About two weeks ago, a damning report confirmed the Nigerian government’s institutional weakness and unfocused response to ‘hot money,’ terrorism, and its funding. Basel Institute of Governance, in its latest global ranking on money laundering and terror financing risks, ranked Nigeria 17th out of 128 countries, placing it firmly in the ranks of countries with high risks of money laundering (ML) and terrorism financing (TF) and is susceptible to greater risks of environmental crime.
The effects of terrorism on Nigeria will spread further afield to economically and militarily weaker countries in West Africa if not curbed early and urgently, especially by more affluent countries. What could complicate things is the ease of movement of funds within and across the national borders of the country. What Basel AML index 2022 wrote could be truer of Nigeria than many other African countries. The report explained that, in tackling ‘dirty money,’ most countries “are taking one step forward and four steps back – and remaining too many steps behind criminals seeking to launder illicit funds.” Nigeria, on the Basel AML Index 2022, ranked 6.77 out of 10, and one of the countries “not doing enough to tackle money laundering and terrorist financing”. The multiplicities of anti-money laundering agencies, laws and regulations have not stopped the country from being a safe haven for money launderers as enforcement remains weak and selective interdictions as regulations are routinely flouted.
About a year ago, the ECOWAS agency known as Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) announced that the Islamic State in West Africa Province (ISWAP) was laundering; and N18 billion through Nigeria’s financial system fund was generating yearly from trading and taxing communities in the Lake Chad region to deepen terrorism, a charge the government denied, but without strong proof. With Nigeria serving as a conduit for terrorism financing, West African countries are more vulnerable to attacks. So much is therefore expected of Nigeria in securing West Africa from the menace of terrorism and the activities of terrorists. Other countries in the West African sub-region need to work together to crush terrorism within their terrains. The consequences of not doing enough and early enough could lead to the entire sub-region becoming subdued by terror organisations. Afghanistan is a case in point. If Afghanistan could be taken over again in August last year by the Taliban terrorists, it is a clear foreboding that any West African country presently under terror threats could yield to the onslaught of terrorists and lose conventional government, paving way for terrorists to take over. Imagining such a prospect is rather terrifying. But it is important that such imagination is prevented from turning into reality, or West Africa could soon become terrorist headquarters in Africa.
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