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Policy

Vol. 2 No. 1 | Winter 2015
 

Nip It in the Bud:

Disrupting Insurgent Financial Networks Before They Take Root

Tom Keatinge | 12 January 2015

The rapid rise of Islamic State[1] has galvanised the international community to take action to contain it.  One issue in particular – financing – has drawn increasing attention from policy-makers.  As U.S. Secretary of Defense Chuck Hagel noted in August 2014, "ISIL is as sophisticated and well-funded as any group that we have seen. They’re beyond just a terrorist group…they are tremendously well funded."[2]  He elaborated on this further in a September testimony to the U.S. Senate Armed Services Committee, stating that the United States would work with international partners "to cut off ISIL’s funding" and that "the Department of Treasury’s Office of Terrorism and Financial Intelligence is working to disrupt ISIL’s financing and expose their activities."[3] This decision by international partners to jointly focus on finance disruption has resulted in a bombing campaign partly targeting oil refineries (a major source of funds for Islamic State) and in a UN Security Council Resolution that exhorts the international community to inhibit foreign terrorist fighter travel and otherwise disrupt financial support.[4]

But will it work? This article will give necessary broader context on this key question by exploring in more general terms the importance of financing for terrorist and insurgent groups and the extent to which disrupting their funding can reduce the security threat posed by such groups.  Specifically considering the evolution of Islamic State, this article will first review the importance of financing in conflict, then assess the way in which funding models develop. It will argue that, once groups move from a reliance on externally sourced funding to generating sufficient internal financing – a path several groups have now followed – disruption becomes significantly more challenging and complex.  The international community consistently fails to prioritise the early disruption of terrorist and insurgent financing – an attitude that needs to change...

 

As a longer article, this piece will only be offered in PDF format for easier reading. Download the PDF to read more.

[1] This article uses the term Islamic State for the group known variously as the Islamic State of Iraq and Al-Sham (ISIS), the Islamic State of Iraq and the Levant, or its Arabic acronym Da’esh

[2] Ackerman, Spencer (2014), ‘Apocalyptic’ ISIS Beyond Anything We've Seen, Say US Defence Chiefs (The Guardian) http://www.theguardian.com/world/2014/aug/21/isis-us-military-iraq-strikes-threat-apocalyptic

[3] Hagel, Chuck (2014), Transcript: Hagel Testifies to the Senate Armed Services Committee on the Islamic State http://www.washingtonpost.com/world/national-security/transcript-hagel-testifies-to-the-senate-armed-services-committee-on-the-islamic-state/2014/09/16/a4909e26-3dab-11e4-b0ea-8141703bbf6f_story.html

[4] United Nations Security Council (2014), http://www.un.org/News/Press/docs/2014/sc11580.doc.htm

Tom Keatinge 

 

Tom Keatinge is Director of the Centre for Financial Crime & Security Studies at the Royal United Services Institute in London.  He is a former investment banker at J.P. Morgan and has a Masters in Intelligence & International Security from King’s College London.

 

Pulling Apart at the Seams:

How the Smuggling and Narcotics Trade Are Helping to Reshape Governance in the Sahel

Andrew Lebovich | 12 January 2015

The jihadist takeover of northern Mali in mid-2012 caught many regional observers by surprise. For years, al-Qaeda in the Islamic Maghreb (AQIM) and later the AQIM splinter group, the Movement for Oneness and Jihad in West Africa (MUJAO in French), were seen largely as smugglers, criminals, and “narco-traffickers.” This perception led to a curious process by which some analysts dismissed the risk posed by these groups, while others (chiefly, Western governments) developed a near obsession with the prospect that money from smuggling operations, particularly drugs, would finance jihadist activity in the Sahara and Sahel.[1] While regional experts have since aggressively critiqued the notion of extensive ties between Sahelian militant groups and smuggling, particularly in the narcotics trade,[2] it is nonetheless important to assess the extent of these connections and how they fit into a larger regional context.

The purported link between cocaine trade and militant groups gained traction among outside observers due to the appearance of both in northern Mali at approximately the same time. Cocaine first began circulating through and in northern Mali in the early 2000s, while the group that would become AQIM, the Salafist Group for Preaching and Combat (GSPC), achieved notorious renown in 2003 with the kidnapping of 32 Europeans in southern Algeria. [3] Analysts also focused extensively on cocaine, despite the large circulation through and within the region of cannabis products, amphetamines, and other drugs.[4]

 

However, the rise of smuggling networks and economies in the region long preceded the arrival of jihadist militancy. As anthropologist Judith Scheele and others have noted, smuggling in northern Mali began in the 1960s and 1970s with the trade in foodstuffs, especially powdered milk and pasta produced in Algeria, which was then re-sold in Mali and northern Niger.[5] In the 1970s, 1980s, and 1990s, illicit or semi-licit (grey market) trades emerged, including the smuggling of subsidized petrol from Libya and Algeria into the Sahara, as well as the two-way movement of weapons, counterfeit or contraband cigarettes, and people.[6] This smuggling was itself part of an older process in a region that has always depended on the circulation of people and goods for survival...

 

As a longer article, this piece will only be offered in PDF format for easier reading. Download the PDF to read more.

[1] See for instance “Africa Under Attack: Drug trafficking has acquired a whole new dimension,” United Nations Office on Drugs and Crime, December 8, 2009. https://www.unodc.org/unodc/en/about-unodc/speeches/2009-08-12-africa-under-attack.html; also see Dario Cristiani, “Al-Qaeda in the Islamic Maghreb and the Africa-to-Europe Narco-Trafficking Connection,” Jamestown Terrorism Monitor, November 24, 2010. http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=37207.#.VFvwohlawrw

[2] One particularly astute analyst of the relationships between various groups and illicit trade in the region is Wolfram Lacher. See Wolfram Lacher, “Challenging the Myth of the Drug-Terror Nexus in the Sahel,” West Africa Commission on Drugs, August 19, 2013. 

[3] “German plea over Sahara tourists.” BBC News. 12 May 2003.  BBC. Web 7 Nov. 2014 < http://news.bbc.co.uk/2/hi/africa/3020131.stm>

[4] Since October 2014, security forces in Niger, Burkina Faso, and Mauritania have reportedly seized several tons of cannabis, suggesting that at least some narcotics trafficking continues to operate in the region. Authorities in Niger also seized nearly 6 kg of cocaine at the main airport in Niamey, Niger in April and December 2014, as well as a larger amount of cannabis. See “Mauritanie: L’armée abat deux trafiquants de drogue près de la frontière algérienne,” Koaci, December 19, 2014. http://koaci.com/mauritanie-larmee-abat-deux-trafiquants-drogue-pres-frontiere-algerienne-97313.html; “Burkina Faso: Plus de 7 tonnes de chanvre indien saisis à la frontière du Mali,” Koaci, October 20, 2014. http://koaci.com/burkina-faso-plus-tonnes-chanvre-indien-saisis-frontiere-mali-97349.html; Aishu Manga, “3,5 kg de cocaïne saisie à l’aeroport de Niamey,” Sahelien.com, April 15, 2014; Omar H. Saley and Maria Coulibaly, “Niger: La police a saisi plus de 2 kg de cocaïne à l’aeroport de Niamey,” Sahelien.com, December 23, 2014; Olivier Fourt, “Niger: Madama, base de la lutte contre les trafics,” Radio France Internationale, January 1, 2015.  http://www.rfi.fr/afrique/20150101-niger-france-madama-barkhane-le-drian-libye/

[5] See Judith Scheele, “Circulations marchandes au Sahara: entre licite et illicite,” Hérodote, 2011/3 (n°142).

Andrew Lebovich 

 

Andrew Lebovich is a PhD Student in African History at Columbia University. His doctoral research focuses on religion, politics, and society in 19th and 20th Century North Africa and the Sahel, and he has conducted research in Senegal, Mali, and Niger.

 

Trading Security:

A Case Study on Maritime Security Decision Points in the Context of Global Trade

Caroline Troein & Anne Moulakis | 30 January 2015

Abstract:

The term maritime security often evokes destroyers and aircraft carriers, disputes over territorial waters or islands, or piracy and terrorist attacks such as the USS Cole bombing in 2000. High profile crises can lead us to forget that maritime security is an everyday event; it is about enabling safe transit. Each step within the maritime transport of goods has security challenges and considerations. At the same time, the continued stability and effectiveness of maritime trade is itself a broader security matter of importance to consumers, businesses, and governments. With the “weaponization of finance” maritime trade will play a central role in economic actions being taken out of geopolitical concerns.

 

As a longer article, this piece will only be offered in PDF format for easier reading. Download the PDF to read more.

Caroline Troein 

 

Caroline Troein specializes in business and policy strategy in technology contexts. She currently works as a researcher at the Fletcher School. She focuses on strategic technologies in the global commons, applying systems analytics and security studies to cyber, space, and maritime questions. She has worked as a consultant on cross-country user technology behavior. Before that, she worked as a Congressional staffer in the US House of Representatives, where her policy portfolio included technology, space, and cyber issues. She also has a strong interest in the Arctic, having traveled there and worked on conferences addressing strategic implications of changes in the region.

Anne Moulakis 

 

Anne Moulakis has been studying and working with maritime affairs since 1991. Maritime affairs were a central theme in her MA in Mediterranean Studies at the Department of War Studies, King’s College London and during her current studies at the Fletcher School. Prior to Fletcher, as a legislative aide for US Senators Wellstone and Boxer Anne worked with maritime affairs by covering transportation, commerce, environment, defense and foreign policy. Subsequently, Anne spent seven years as a political and counter-terrorism analyst for the US Department of Defense. More recently, Anne helped develop an education campaign in support of improving US fishery management for the Ocean River Institute, and is currently the project coordinator for Fletcher’s Fourth Annual Warming Arctic Conference.

 

Money and War:

Corruption as the Hidden Enemy of Mission Success

Emily Knowles & Karolina MacLachlan | 20 January 2015

Corruption, Instability, and Effectiveness of Stabilization Operations: The Vicious Cycle

 

Corruption, instability, and conflict tend to go hand in hand. Twelve of the fifteen lowest-ranking countries on Transparency International’s Corruption Perceptions Index are currently experiencing violent insurgencies, extremist activity, or other signs of deep-seated instability. [1] Systemic, embedded corruption is a thread that runs through such seemingly disparate events as the outbreak of the Arab Spring, the conflict in Ukraine, the failure of the Malian army in 2012, the growth of Boko Haram in Nigeria, and the retreat of the Iraqi security forces in the face of ISIS. However, the effects of corruption are not limited to exacerbating the risk of conflict; corruption also makes it more difficult for states to respond to threats and for international institutions and other actors to offer effective assistance.[2]

 

Assistance to fragile and failing states tends to include two types of engagement: international peacekeeping and/or stabilization operations and defense capacity building (i.e. assistance to the recipient states’ security forces). But without anticipating and mitigating the risks that corruption poses, the international community risks the intent of security assistance being subverted, the assistance wasted, and the success rate of stabilization operations being severely impaired. In particular, misappropriation of funds, vanishing resources, and a reliance on malign power-brokers can irreparably damage the operational success of a mission.

 

This article is based on the research investigating the international community’s approach (or lack thereof) to tackling corruption in Afghanistan carried out by Transparency International UK’s global Defence and Security Programme (TI-DSP) and based on over 75 interviews with civilian and military officials. This work is supported by insights from TI-DSP’s long-term engagement in the Building Integrity training for the Afghan National Army and Afghan National Police.[3]  In the resulting report, we argue that corruption has had a significant impact on ISAF mission success and that the international community’s reaction to corrupt practices was too little, too late. We point to three main ways in which corruption and uncontrolled money flows can diminish the effectiveness of the mission and offer a planning and risk assessment framework as the first step toward addressing corruption risks on operations...

 

As a longer article, this piece will only be offered in PDF format for easier reading. Download the PDF to read more.

[1] "Corruption: The Unrecognized Threat to International Security." Carnegie Endowment for International Peace: Working Group on Corruption and Security, 2014, 13

[2] Viola Gienger, ‘Corruption: Sleeper Threat to International Security’, United States Institute of Peace 3 July 2014, http://www.usip.org/publications/corruption-sleeper-threat-international-security, accessed 6 January 2015; Pamela Dockins, ‘Corruption Worries Complicate Nigeria’s $1B request to Combat Boko Haram’, Voice of America 18 July 2014, http://www.voanews.com/content/corruption-worries-complicate-nigeria-request-for-1-billion-to-combat-boko-haram/1960643.html, accessed 6 January 2015.

[3] “Corruption: lessons from the international mission in Afghanistan”, Transparency International UK Defence and Security Programme, February 2015

Emily Knowles 

 

Emily Knowles joined TI-DSP in August 2014 to assist the programme director and manage security policy projects on corruption risks to stabilisation and peacekeeping missions. Prior to joining TI, Emily was an International Fellow based in the Republic of Georgia and worked as a Graduate Research Assistant for the Hague Centre for Security Studies. Emily holds an Msc in International and European Politics from the University of Edinburgh, and a first class BA in French and Spanish from the University of Surrey.  

Karolina MacLachlan 

 

Karolina MacLachlan joined TI-UK DSP in August 2014 and is the main point of contact on research and policy issues. She earned her PhD at the Department of War Studies, King’s College London, and has extensive research and university teaching experience in security and defence issues. Prior to joining TI-UK DSP, she worked at the House of Commons, managing inquiries for the Environmental Audit Committee.