TSG IntelBrief: Ransom as Fuel for Terrorist & Criminal Networks
January 16, 2014

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• Kidnapping for ransom is a significant and lucrative source of revenue for terrorist and criminal groups—with the distinction increasingly blurred—in several countries and regions

• Areas of high-risk of kidnapping for foreign nationals—and often natives—include Afghanistan, Algeria, Colombia, Iraq, Mali, Mauritania, Nigeria, Pakistan, Philippines, Somalia, Syria, Venezuela, and Yemen

• Most Western governments adhere to official policy of no ransom for hostages, while behind the scenes some are reported to have paid, or facilitated payment of, ransom to kidnappers.
 
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As of mid January 2014, kidnapping for ransom continues as one of the leading sources of revenue for terrorist groups. While organized criminal groups (including tribes in Yemen and pirates off the coasts of Somalia and the Gulf of Guinea) perpetrate the majority of kidnappings, terrorist groups increasingly use it to finance operations. Although kidnapping is not as a new terrorist tactic, the trend indicates use by political and purportedly religiously motivated extremists for monetary gain rather than bargaining chips for concessions or release of imprisoned group members.

With kidnapping for ransom, the distinction between organized criminal networks and terrorist groups is increasingly blurred, particularly in areas of North and West Africa—quest for revenue is the common thread. Since kidnapping is a crime everywhere it’s reasonable to question whether criminal or terrorist in nature merits deconstruction. But understanding malignant actors’ motivations and modus operandi helps inform more effective approaches in preventing and disrupting the threat and dismantling terrorist and criminal networks.

Hostages are either held in the countries where they are captured or taken by their captors into a second neighboring country. In Kenya, for example, humanitarian relief workers and foreign tourists have been kidnapped by al-Shabaab-affiliated terrorists and then held in Somalia, where the group maintains safe havens. In the Gulf of Guinea of coastal Nigeria, seaborne kidnappers often take hostages to areas they control in the Niger Delta, such as with the adbuction of two American citizen merchant mariners in October 2013.

According to various reports, countries of high risk to the threat of kidnapping for ransom by terrorist groups (as well as criminal groups, some with, some without, a political nexus) include: Afghanistan, Algeria, Colombia, Iraq, Mali, Mauritania, Mexico, Nigeria, Pakistan, the Philippines, Somalia, Syria, Tunisia, Venezuela and Yemen.

Making high risk countries especially vulnerable to kidnapping threats are generally four factors: weak or failing central governments, widespread lawlessness (more often in rural area though urban areas of countries such as Mexico and Venezuela show high incidence), the presence of groups that establish safe havens, and the presence of foreigners—tourists, employees of multinational corporations operating in resource-rich areas, or humanitarian relief workers.

In Yemen, armed tribesmen at times collaborate with al-Qaeda in the Arabian Peninsula (AQAP)-linked militants to take foreign hostages in exchange for ransom or political concessions, though the latter has longer been the tradition for clans versus government disputes. Events in Libya and Mali in 2012-13, added to conditions that increased an already lucrative ransom intake through vast parts of the Sahel Belt. In other countries such as Nigeria and Niger, regional instability drives kidnapping operations, with groups such as Boko Haram regularly kidnapping foreign workers and receiving substantial payment from victims’ employers. In the Syrian conflict zone where terrorist groups operate, the civil war has witnessed numerous kidnappings for ransom of foreign nationals, particularly journalists and media personnel, humanitarian relief personnel, local civilians and other foreigners in the country. Kidnapping by terrorist groups for ransom continue to persist in the Philippines, where the Abu Sayyaf network abducts foreign nationals, sometimes for long periods, in exchange for ransom.

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Magnitude of the Threat

According to various reports the amounts paid in terrorist-related ransoms since 2008, vary between $60 million and $73 million, with an average of between $3 million to $5 million paid for high profile captives (often depending on the location of the hostage taking incident, with ransoms in the Sahel or Yemen estimated to be higher than those in Syria, for example). The US Treasury Department estimates terrorist groups acquired ransom payments of over $120 million between 2004 and 2012. Making accurate reporting of ransom details more challenging is government and private entity circumspection or outright denial of payment.

Prior to the 2013 summer terror alert that resulted in closing the US and UK embassies, AQAP succeeded in obtaining an estimated $22 million in exchange for the release of Swiss, Austrian, and Finnish hostages. The ransom was reportedly deposited with intermediaries based in a nearby Gulf Arab country.  

Once the ransom payouts are distributed to the various actors involved in a kidnap operation (including the intermediaries), the funds are generally used to buy weapons, explosives, for logistics and to run training camps, and, for some groups such as Mokhtar Belmokhtar’s offshoot of al-Qaeda in the Islamic Maghreb, personal enrichment.  

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Government Responses

While most governments adhere to a policy of no ransom, some countries to accede to the kidnappers’ demands and pay directly, or facilitate payment from private entities such as employer. At the June 2013 G8 summit in Northern Ireland, while the assembled government leaders agreed to ban ransom for hostages and called on corporations to refuse payment for kidnappers—because it encourages more kidnappings—in practice, the agreement does not appear to be holding, with some countries. Making the situation more problematic, employers of kidnapped personnel often lobby their governments to permit ransom payment. In some countries it’s legal to pay ransom for kidnappings, thus fueling kidnapping as lucrative revenue source.
 
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• Based on current trends, kidnappings for ransom are likely to continue on an upward trajectory, particularly in conflict zones such as North and West Africa, Somalia, Yemen, Syria, Afghanistan and Pakistan

• In another trend of concern, with al-Qaeda leader Ayman al-Zawahiri’s repeated calls to kidnap Westerners (citing their success in abducting American humanitarian aid worker Warren Weinstein, from his home in Lahore, Pakistan, in August 2011), violent extremist associates and affiliates are likely to target Westerners for revenue and use as bargaining chips to free comrades.

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We welcome the opportunity to discuss your requirements and explore how our intelligence services can assist you in achieving your strategic objectives. For more information, please contact us at: info@soufangroup.com

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