SECTIONS

Trace the money, expose the terrorists

As President Uhuru Kenyatta stated recently, counter-terrorist efforts around the world have shown that following the money can expose, undermine and eventually help defeat terror organisations.

Over many years of working on financial crime, I have seen how terrorist organisations in India, Turkey and Sri Lanka operate.

They use a pot of money and depend on a steady stream of income to run their propaganda machine, get vehicles and weapons, give expenses and money to fighters, and need money to administer territories.

Law enforcement and institutions of justice can exploit the terrorists' dependency on cash flows. Identifying where illicit money is flowing and closing down unregulated systems of money transfer - such as hawallas – is one way to do that.

Ungoverned financial mechanisms are of concern as authorities do not know what money is going, where and to whom.

Once transactions can be traced then illicit transfers can be stopped.

Like with registration of other commonly used banking and mobile phone exchange systems, measures taken to control money transfer companies and recording of transactions do not need to unnecessarily disrupt businesses and law-abiding people.

In Bosnia Herzegovina, after the war, I saw how illegal foreign fighters capacity to operate was defeated as law enforcement, justice and intelligence agencies worked with international partners to deprive them of access to banking networks.

Without money, they had to withdraw. As part of a wider strategy, identifying and disrupting the money supply that terrorist organisations like Al-Shabaab need to operate keeps them tied up with worrying about money, eroding their organisation and capacity to operate.

So, tackling terrorist financing is most effective when it is part of a robust multi-faceted strategy that squeezes the terrorists and keeps the whole of the nation onside by using a variety of military, political, economic and social tools.

We have seen how Al-Shabaab's income streams have been gradually undermined but still exist as the territory it controls has diminished.

At one point they heavily relied on taxing the busy Bakara market in central Mogadishu and had links to money from piracy.

More recently, they have taken to taxing broad sections of the Somalia population and exploiting the illegal trade in charcoal.

The organisation continues to evolve but there are signs it may now be under pressure to find new sources of revenue. Strong legislation, licensing and monitoring of financial flows through banks and companies, together with diligent law enforcement, can be used to close the loopholes.

My programme of work, which was born out of discussions between the European Union and Kenyan financial authorities, is now in its opening phase.

I will work on tackling money laundering together with terrorist financing across nine countries in the region.

The illegal and underhand financial flows that terrorists rely on cut across boundaries. Which is why sharing information and practices between law enforcement, private and central banks, regulators and financial investigators – between countries - is critical to fighting the terrorists.

Kenyan institutions such as the Kenyan Central Bank and private banks, the Financial Reporting Centre and Asset Recovery Agency, judges and prosecutors all have a critical role to play.

The programme, funded by the European Union, will seek to strengthen financial systems, improve intelligence sharing, train a range of partners and increase understanding of how terrorists use money to carry out their atrocities.

When institutions work together, anomalies in financial transactions and transfers can be spotted, intelligence collected, and movements of large sums of money traced to expose and stop a network of terrorists.

Sri Lanka is a case in point. As part of a wider fight by the government, the terrorist Tamil Tigers were defeated in 2009, partly following a concerted effort to unravel the international network of businesses (mostly restaurants) they relied on.

There is evidence that Al-Shabaab use a system of international remittances from around the world, studying this aspect in my work.

I am designing a training regime which will enable knowledge and skills to be passed on down generations of regulators.

My programme is a unique, three-year commitment by the European Union to strengthen institutions to the lasting benefit of East African security.

Together we can energetically apply our efforts to identify the scope and scale of terrorist financing in the region, of which Al-Shabaab is but one part, then identify and exploit their weaknesses.