The changing landscape of terrorism and its funding.

 In the last two years (2023 / 2024) deaths from terrorism have increased by over 22% and are now at their highest levels since 2017, though they are 23% lower than their peak in 2015. While the number of deaths increased, the number of terrorists’ incidents fell, with total attacks dropping by 22% since 2017. While there were 3,350 global terrorist attacks in 2023, Pakistan recorded the highest in any country with 490 recorded attacks. The rising number of fatalities, with a reducing number of incidents indicates that terrorism is becoming more concentrated and correspondingly lethal. There were 57 countries affected by terrorism in 2015 and 44 in 2022, which fell to 41 in 2023. The single largest terrorist attack that occurred in 2023 was the 7^th October attack by Hamas on Israel, that killed 1,200 people and was the largest single terror attack since 11 September 2001 (the 9/11 attacks). The consequences of the Hamas attack are still in progress with an estimated 26,000 Palestinian killed by the retaliatory military response by Israel, as of February 2024.

While Israel suffered the largest terrorist attack of 2023, it was Burkina Faso that has been most impacted by terrorism. 258 terrorist attacks killed over 2,000 people, accounting for nearly a quarter of the global deaths due to terrorism, surpassing Afghanistan and Iraq. Iraq had less than 100 deaths from terrorism in 2023, a massive 99% reduction in the number of deaths since their peak in 2007, and incidents falling by 90%. Afghanistan has had an 84% fall in deaths and 75% reduction in incidents since 2007. The deadliest terrorists’ groups in 2023 were the Islamic State (Daesh), the Jamat Nusrat al-Islam wal Muslimeen (JNIM) which is part of the Algeria based al-Qaeda, Hamas, and al-Shabaab which is based in Somalia and active in East Africa.

The Islamic State has remained the globally deadliest terrorist group for the last nine consecutive years, recording the highest number of attacks and the greatest number of deaths from terrorism. The group is still active, although its impact has been falling these past nine years. Deaths attributed to this group and its affiliates fell by 17% over the last year, the lowest since 2014, while it carried out attacks in 20 countries in 2023, a number that is reduced from 30 countries in 2020. 

Terrorism has been reducing for several years prior to 2023 with a substantial fall between 2015 to 2019, with a current high percentage increase even as the total number of attacks have fallen considerably. The number of active terrorist groups have also fallen over the past 15 years with 66 still active in 2023, compared to 141 in 2009. However, terrorist attacks are now more intensified with fewer attacks committed by fewer people, while causing a higher number of fatalities, with the death of victims rising from 1.6 per attack in 2022 to 2.5 per attack in 2023. 

Today, the primary threat of terrorism comes from individuals inside the country who are inspired the global terrorist organizations ideologies and those who seek to martyr themselves by carrying out terrorist attacks without any specific directions from a known terrorist group. Particularly, domestic violent extremism, which is motivated by religious bias, grievances against government authority and/or a mix of ideologies have grown over the last five years to become one if the most serious threats against democracies.

As the nature of the threat of terrorism and the individuals involved get more varied, the financing of terrorist activities has similarly changed over the past few years. While some organizations still send money to terrorist groups across the world, many “inspired” individuals are focusing their efforts and resources on unprotected civilian targets. ISIS and al-Qaeda related financial activity is most commonly associated with people from the Western countries, USA, Saudi Arabia, Qatar and North African countries aspiring to travel and join these organizations, while transferring money via underground channels. 

Terrorist organizations are also fast adopting to changes in technology, using virtual assets to transfer funds, and using clones of legitimate charities to collect and transfer funds globally. ISIS-K in Afghanistan remains an important and powerful affiliate due to its role as a regional hub, transferring hundreds of thousands of dollars to financial facilitators as well as providing personnel and weapons to support external operations. Apart from cash reserves, ISIS generates significant income through various illicit and criminal activities. Kidnapping for ransom and extortion provides significant amounts of money to the group, especially for key ISIS branches, such as ISIS-K and ISIS-Somalia. 

ISIS-Somalia has become one of the most important branches for ISIS financially, as it generates significant revenue for the group through extortion of local businesses and financial institutions, some of which is then transferred and distributed to other ISIS branches and networks. ISIS-Somalia has served as a financial and communication hub for the global ISIS enterprise, facilitating funds transfers to other branches and networks through mobile money platforms, cash transfers, hawala, and money laundering through businesses. ISIS has also sought to aggressively fundraise online using social media, encrypted mobile applications, online gaming platforms, and virtual asset service providers (VASPs) for fund transfers.

Al-Qaeda and its affiliate groups continue to utilize many of their long-standing methods of illicit revenue generation. According to the UN, al-Shabaab is still in a very strong financial position, having several reliable sources of income, with an estimated annual revenue of around $100 million. The group engages in systemic extortion of businesses and individuals in Somalia, leveraging its territorial control to maintain a consistent stream of revenue. Tactics include setting up checkpoints to extort vehicles and transportation of goods along supply routes as well as illegally taxing residential properties and developers of new properties in Mogadishu. Al-Shabaab predominantly collects this money in cash but also uses mobile money services, money remitters, and banks to transfer funds. Recent public actions against al-Shabaab financiers have highlighted al-Shabaab’s reliance on weak government institutions and regional and international networks of financial facilitators to support the group’s activities.

The terrorist group Hizbullah is funded in large part by the Iranian government, which provides several hundred million dollars a year in direct funding. Hizbullah also engages in a range of illicit and commercial activities to supplement its income. These illicit activities range from oil smuggling and shipping and charcoal smuggling to drug and weapons trafficking. For instance, Hizbullah has been implicated in several complex illicit oil smuggling schemes which were orchestrated by, and jointly benefited, both Hizbullah and Iran’s Islamic Revolutionary Guard Corps (IRGC) Quds Force. In one scheme, numerous companies and ships smuggled Iranian oil by blending it with Indian petroleum-products and creating counterfeit certificates of origin. The oil was then loaded onto ships owned and flagged in Liberia and Djibouti, seen as more permissive jurisdictions, to avoid scrutiny. This example demonstrates Hizbullah’s ability to use a complex web of front companies to hide, both the ownership of the vessels and the true source of the oil. Hizbullah also regularly exploits the international financial system and excels in utilizing networks of seemingly legitimate front companies to raise, launder, and move money on behalf of the group. These front companies are used to obscure the true beneficial ownership. They are used extensively in various commercial activities benefiting Hizbullah, such as real estate, import/export, construction, and luxury goods. These commercial activities generate significant income for the group and draw less scrutiny than outright illicit enterprises.

Terrorism and terrorist financing threat has evolved significantly since 2017, with terrorist organizations and violent extremist movements having shifted to a more diffuse, less hierarchical, networked structure facilitated by online communication, in which individuals may self-radicalize and become inspired by an ideology from across the globe. In the financing context, this means attacks by such radicalized individuals are smaller scale and require less outside financing, creating significant challenges for financial institutions and law enforcement looking to prevent attacks. However, terrorist organizations will still look to battle-tested methods of raising, moving, and using funds. Even as new security challenges arise, and terrorists adapt to counter-terrorism efforts, and new terrorist threats emerge around the world, we have to remain committed to keep evolving to meet new challenges and countering the next decade of terrorist threats.

 

References:

1.   Global terrorism index [GTI]

2.   Terrorism tracker

3.   Institute for Economics and Peace

4.   U.S. Dept of Justice

5.   ODNI 2023 Annual Threat Assessment

6.   International Centre for Counter-Terrorism

7.   U.S. Department of Treasury, OFAC reports

8.   FATF, Terrorist Financing Risk Assessment Guidance, (Jul. 2019)

 

 

 

Taliban of the 21st century:

 The Taliban’s agility and ability to adapt has been remarkable. Their gradual acceptance to the fact that unrestricted violence would hurt their quest for popular support, transformed into sophisticated policy planning and implementation of developmental activities. Step-by-step, they revived and re-started parts of their governance, and invented other systems through trial and error. Much of this process appears to be from the ground-up and influenced by popular demand and local experiences. Their leadership also proceeded to correct many of the flaws and shortcomings that undermined their rule in the 1990s. The ban on women and girls attending school has been removed, though most Taliban officials claim that no ban ever existed, and have publicly stated that women should have access to education. The ban on opium cultivation and its trade, which was a disaster during their earlier government times is clearly no longer in place, but the Taliban do not publicize this shift in policy and down-play the opium connection in public. Other subtle differences are their stated respect for other ethnic groups and their embrace of technology, limited as it may be. Circumstances have radically changed for the Taliban since 2001, and their policies and goals have shifted accordingly. Far from being a revolutionary movement of the 1990s, prior to 2022, they considered themselves as a deposed government and the main armed opposition fighting the pro-Western government supported by foreign soldiers. The Taliban leadership itself has also been transformed. Circumstances have forced them to travel outside their villages and also outside the country at times, and they have learned from their travels.

The simple fighters of yester-years are worldly trained politicians today; transforming themselves from being traditional conservatives into modern Islamist's. They have also become better at managing external perceptions, having realized that appearing as educated people is an advantage and it is helpful in manipulating the media. They have become sophisticated; with professional-standard glossy publications, a website in several languages, videos made of high-quality production and highly capable spokesmen that respond rapidly to questions and criticism across social media platforms like Twitter, Facebook and WhatsApp; even though what is publicized on the social media is vastly different from the ground reality in Afghanistan. What exactly do the changes in Taliban policy means for Afghans and the future of Afghanistan will depend on the critical study and analysis of their on-ground actions. The Taliban are led by the Emir ul-Mumenin (leader of the faithful), currently Mullah Haibatullah Akhunzada. The scope and complexity of this position varies according to the person who occupies it, and the current Emir’s functions are more spiritual and political, than as an operational military commander. He is assisted by two deputies, as well as the leadership shura. At the provincial level there is a governor, appointed officially by the leadership shura. The Taliban now has a quasi–professional core of individuals who have served for several years across multiple provinces. These governors and local councils / commissions are not completely ‘civilian’, and the governors may serve in military capacity to varying degrees depending on the context and broader requirements of the office for local governance. Provincial ministers are appointed by the leadership of the relevant council, viz: education, health and finance; in consultation with the governor of the province. The system has grown more comprehensive over the years, with a dozen committees, some with multiple departments covering a multitude of issues. Significant autonomy is granted to province and district level officials within the overall framework of the policy.

This flexibility is intentional, in order to accommodate different views and reducing dissent to as little as possible. It also helps to prevent the Taliban from splitting into different factions; since local politics and preferences based on history play a significant role in governance. Some areas might have a higher demand for health services than others, while others might want to give priority to education. The extent to which services have been available in the past also matters.  Areas where customary structures of governance are influential and respected, are in a stronger position to bargain for amenities from the Taliban officials. Individual relationships also influence policies, although the Taliban does not generally welcome individual opinions, since such interactions could be perceived as corruption.  In practice however, the Taliban rely on relationships in every aspect of their governance, due to a lack of trust in general and the widespread suspicion of their motives by the locals and the international interlocutors. Arrangements between the Taliban and civilians are based on a mutual yet unequal exchange, leading to an informal social contract that renders to the Taliban a legitimate authority, and strengthening its credibility as an acceptable form of government; even though it is not a government based on the choice and free will of the people of Afghanistan.