SA an attractive destination for terrorism funding networks

South Africa is increasingly becoming more attractive to terrorist organisations with funding and training taking place within the country, according to the head of business crime and forensics at Werksmans, Bernard Hotz. 

Ironically, the ability of terrorist groups to set up networks here that provide funding and a venue to co-ordinate activities elsewhere could be protecting South Africa from terrorist attacks, at least by al-Shabaab. 

“It is believed that an al-Shabaab terrorist attack within South Africa may actually do more harm than good,” Hotz told journalists on Wednesday. “If evidence is true, al-Shabaab [is using South Africa] to fund and possibly organise high-value attacks within Somalia and the wider East African region.”

“An attack on a nonantagonistic safe haven could prompt a backlash by the South African authorities, which could place aforementioned channels at significant risk of being curtailed,” he said. 

South Africa is not ranked in the top 10 of the Global Terrorism Index, which other African countries such as Nigeria are, but it has been steadily moving up the ladder from being ranked 140 out of 162 countries in 2010 to 48th place in 2014.

The Global Terrorism Index measures incidents of terrorism, geographical activity, organisations involved and the national economic and political context, Hotz said. 

Hotz quoted Jack Salomon, head of national litigation and forensic practice at Capstone, an insurance claims and dispute advisory service, on the question of why international terrorists would find Southern Africa so attractive. 

Salomon said: “With lawlessness, government corruption and a wide range of preferred terrorist financing methods available, al-Qaeda could indeed partake in elicit and unregulated trade in Southern Africa to sustain itself.”

Hotz said South Africa is seen to have high levels of lawlessness and officials and limited investigative intelligence capabilities. 

There are some known incidents where terrorist organisations have funded themselves through a publicly traded entity on the JSE or through acquisitions by foreign entities, he said. 

Money could also be moved through multi-party transactions in which a South African company is unwittingly used as the middleman for the indirect transfer of funds.

“Historically al-Qaeda and Hezbollah operatives have been discovered to have had operations financed though South Africa, which is possibly continuing to date,” he said.  

“It’s speculated that Boko Haram might have operations in South Africa … but it is more difficult to ascertain due to the growing relationship between South Africa and Nigeria.” 

These interactions are happening despite efforts by the government to tighten legislation though the Financial Intelligence Control Act (Fica). 

Hotz said Yassim al Qadi, a US designated terrorist financer, invested $3-million for 12% interest in Global Diamond Resources, which mined diamonds in South Africa. 

A local seafood business is alleged to act as an al-Qaeda co-ordinating unit for Jihads who have been trained in Mozambique and subsequently enter South Africa illegally. 

Al Aqsa Foundation, which was established in South Africa in 1992, is on the list of US designated terror organisations and fronts, he said. 

Hotz encourages companies who do not want to be used unwittingly to educate themselves around the mechanisms to funder terrorism, such as money laundering, proceeds from investments, multi-party transactions and virtual currencies like Bitcoin, and though corrupt bank officials. 

He said companies must familiarise themselves with the operations of clients or suppliers and seek advice from appropriately qualified personnel on transactions that raise suspicion. 

Hotz said there was increased evidence of co-operation between organised crime and terrorist organisations.

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