Good morning. Mr. Chairman, and members of the committee, thank you for giving me this opportunity to appear before you to discuss terrorist financing.
In short, terrorist attacks do not require much capital. Al Qaeda in the Arabian Peninsula once touted how its failed plot to bomb a plane over North America in 2010 cost only $4,200. What's not captured in such estimates is the general cost of operating. This includes salaries, ground transportation, safe houses, and even paying bribes. These make up some of the fixed costs which terrorist organizations incur.
We've identified four general typologies that we see terrorist groups employing in order to meet these costs. They are controlling territories and borders, participating in crime and smuggling, tapping wealthy private donors, and also there's state sponsorship.
I'll give an overview of some of the examples and identify some vulnerabilities in these methods that we can use as opportunities for our governments to disrupt and weaken terrorists' ability to fund themselves.
First, terrorists leverage their control of borders and ports. One example is ISIS. It makes $1 million to $2 million per day by selling oil from the refineries it controls in Syria and Iraq. It levies taxes on goods in the territories that it controls and it actually forces local businesses to pay fees for electricity.
There's Boko Haram. Boko Haram controls parts of Nigeria and neighbouring countries. It earns money by taxing the fish trade. Al Shabaab taxes charcoal and other goods that have to travel on roads to and from Somalia's major ports. The UN estimates that al Shabaab at one point was earning $75 million to $100 million a year in charcoal sales alone, and charcoal was banned from being exported from Somalia.
There's an opportunity here. The local business people are affected by violent extremists and they may serve as potential allies in fighting terrorist influence.
Then there's crime and smuggling. For example, kidnapping for ransom is actually the leading method of terrorist financing after state sponsorship. One example, since 2008, al Qaeda in the Islamic Maghreb alone has received more than $90 million from various governments around the world to release hostages.
There are, of course, the jihadist conflicts in Syria and Iraq. They've opened the flood gates for the legal trade of antiquities. It's difficult to calculate the exact amount that ISIS has received from the antiquities trade, but one source estimated that the group accrued $36 million from stolen artifacts just in one part of Syria.
Boko Haram, as I mentioned, robs banks and steals military equipment. It threatens poor farmers just to sustain itself. It will threaten kidnapped family members, so that it can receive livestock and food.
There is the worldwide illegal wildlife trade. Going back to al Shabaab, it's used its proceeds from illegal ivory tusk trafficking to fund terrorist attacks in Kenya. You're familiar with the Westgate mall attack, a Canadian official was killed in that attack.
There is the Lord's resistance army. They poach elephants to fund their activities. There's a vulnerability here because crime and extortion also alienates the local population creating potential allies.
Regarding hostage-taking, one U.S. official noted at the U.S. treasury department noted that al Qaeda has apparently shifted its focus from targeting Americans for kidnapping because the U.S. government does not pay ransoms. This may bode well for the Canadian government which has a similar stance.
There are also the wealthy donors. This is particularly an issue in the gulf. A considerable amount of funding still alludes financial oversight at times. This is a challenging target because many of the regimes that co-operate with our governments in military and diplomatic areas nevertheless continue to allow terrorist financiers to operate largely unabated.
Qatar and Kuwait are some areas of concern. Various jihadist fighters in Syria are receiving funds through the fundraisers who leverage social media. There is still an opportunity here because the gulf states, obviously, rely on military support from North America and that's a lever that Canada can use to pressure regimes to arrest terrorist financiers.
Finally, there is the issue of state sponsorship of global terrorism. Iran is the most active sponsor of terrorism. Tehran sends hundreds of millions of dollars annually to terrorist organizations such as Hezbollah and Hamas, and despite sharp ideological differences between Iran's leadership and al Qaeda's, Tehran has provided safe haven to even high-ranking al Qaeda members over the last 10 years and al Qaeda has used Iran as a transit point to move recruits and money.
Last year the Canadian court decided to seize $7.1 million in Iranian assets in Canada. That was a milestone for the families of the victims of Iranian terrorism and can serve as a precedent to seize assets which are held back from companies.
In conclusion, as terrorists vary their means for securing funds it becomes more critical for authorities to fully address the multiple strategies they deploy.
The above typologies for terrorism finance demonstrate our enemies' adaptive nature, but each of these methods comes with vulnerabilities, which Canada can exploit.
Thank you for your time and the opportunity to testify today.
