The militant group Al-Shabaab rakes in $3 million annually in form of taxes from traders and shipping companies at the port of Mogadishu, a report by a UN Panel of Experts has said noting the militant group exploits the country’s weak financial system to collect and move funds.
According to the report presented to the UN Security Council, the Al-Qaeda affiliate in Somalia operates accounts in one of the local banks to collect taxes and alms from traders. In the first quarter of this year alone, shipping companies, traders, and cargo agencies coughed up $1.2 million in taxes to the group.
“During the four-and-a-half-month period analyzed, a total of $1,198,933 was deposited into the account in 544 transactions, the report reads in part. Most of the funds, the report said were in form of cash deposits while others were deposited through mobile banking and direct bank transfers.
Noting that the group exploits the country’s weak financial regulatory and reporting systems, the report notes transfers in tranches of $50,000 via mobile banking were made by the end of June moving $1 million to different accounts.
The Financial Reporting Centre regulations require financial institutions to report transactions of over $10,000 in line with the Anti-Money Laundering and Counter-Terrorism Financing Law (AML/CTF).
Besides exploiting traders to fund its terrorist acts, Al-Shabaab is also robbing faithfulls forcefully collecting alms from traders in the city and various parts of the country, the report observes. Within a period of two months between early May and mid-July this year, a zakat account opened by the group collected $1.7 million from ‘various individuals and business entities in a total of 331 transactions.’
One individual paid approximately $300,000 into the account in one day by sending six tranches of $50,000 via mobile banking. By mid-July, the report notes, all the $1.7 million had been transferred to various accounts in what confirms the group operates several accounts.
Wholesale companies in Kismayu pay $600 in taxes to Al-Shabaab while smaller retail outlets are forced to pay $300. All payments, the report says are done through electronic mobile money.
In affirming the need for concerted action to deny the group financial resources, the report says ‘Al-Shabaab retains agility and flexibility of action, as it has demonstrated in the security arena, beyond that of government or private industry that must be acknowledged.’