Super efficient Somali Islamist militants raking in the cash
Moving millions through formal bank system
NEW YORK — Somalia’s Islamist insurgents are moving millions of dollars through the formal bank system and appear to be investing in businesses and real estate, according to a United Nations report offering a rare glimpse into their finances.
Al Shabaab has for years been battling Somalia’s internationally-backed government to impose strict Islamic law in the anarchic Horn of Africa nation.
“Al Shabaab remains in a strong financial position and is generating a significant budgetary surplus, some of which is invested in property purchases and businesses in Mogadishu,” said the report by the U.N. sanctions panel on Somalia.
The report by the group, which monitors compliance with an arms embargo on Somalia, is due to be published this week.
The al Qaeda-linked Somali militants carry out frequent bombings and attacks at home and have also killed hundreds of civilians in Kenya and Uganda. Earlier this year, al Shabaab killed three Americans at a U.S. military base in Kenya.
The U.N. report said the group had funded various small- and medium-sized businesses, including in Mogadishu’s main Bakara market which sells everything from guns to food.
The report included details on two bank accounts held at Salaam Somali Bank, founded in 2009 as part of the Hormuud group of companies, raising questions about Somalia’s capacity to enforce a 2016 law aimed at curbing terrorist financing.
The bank said the panel had not provided them details, so it was unable to verify. “The Panel’s report makes no allegation of misconduct against Salaam Somali Bank,” it said in a statement. “There has also been no instance where Salaam has opened an account for a sanctioned individual or entity.”
Somalia’s Financial Reporting Center, which oversees compliance laws against money laundering and terror financing, said it is investigating the allegations against Salaam.
Nearly $1.7 million moved through one of the accounts during a 10-week period until mid-July this year, the report said, noting the account appeared set up to receive Islamic tax called zakat.
MULTI-MILLION TURNOVER
With around 5,000 fighters, al Shabaab controls towns and countryside in southern Somalia, but its spies and assassins operate nationwide. Its estimated expenditure last year was around $21 million, with about a quarter of that going to the Amniyat intelligence arm.
Al Shabaab also runs its own courts. One businessman told investigators that the courts had summoned him this year and ordered him to pay more than $100,000 in zakat based on a review of his business, which they had assessed before he arrived.
The businessman, who was not named, provided a banking deposit slip and a receipt from al Shabaab to investigators as proof of payment.