As the spectre of terrorism financing looms large over global businesses, experts are sounding the alarm on the urgent need for rigorous due diligence and comprehensive background checks. This warning comes as a response to the increasingly worrisome surge in terrorism, banditry, militancy, inter-ethnic conflicts, and religious extremism on a global scale. From the West African country of Nigeria to conflict zones in the Middle East, the repercussions of corporate entanglements with organizations linked to terrorism have made headlines.
The Global Terrorism Index (GTI) 2023 report from the Institute for Economics and Peace reveals a grim reality. It unveils a troubling uptick in the lethality of terrorist attacks, with a higher average of casualties per attack. Not only has the number of deaths increased, but there has also been a surge in other terror-related incidents, such as abductions, injuries, property destruction, and community displacement.
The report identifies notorious groups like the Islamic State and its affiliates, al-Shabaab, Balochistan Liberation Army, and Jamaat Nusrat Al-Islam wal Muslimeen, as some of the deadliest terrorist organizations in 2022. Their insidious activities pose a significant threat to global security. These groups rely on various sources of funding, with illicit mining of natural resources like gold, diamonds, and crude oil being one of the lucrative avenues they exploit to finance their nefarious activities, including the procurement of arms and ammunition.
Tracing the historical nexus between illicit resource extraction and conflict, the report highlights the role of “blood diamonds” in funding rebel groups during the civil war in Sierra Leone. This illicit trade sustained insurgencies by providing resources for the purchase of weapons. Similar trends are observed in Nigeria, where the exploitation and theft of crude oil in the Niger Delta region and the illicit mining of gold in Zamfara State have fueled insecurity and violence.
In Nigeria, the illicit extraction of natural resources has been identified as a significant driver of violence and insecurity, especially in regions like the Niger Delta and Zamfara. The involvement of criminal networks, including local players and foreign opportunists, exacerbates the situation, leading to a complex web of terrorism enablement.
Recent cases have unearthed how corporations inadvertently embroiled in terrorism financing face legal repercussions due to their associations. For instance, technology giant MTN Group was entangled in legal tussles in the United States over its business relationship with the Islamic Revolutionary Guard Corps. Accusations of fostering the Iranian terror group’s activities through their business ties have propelled the company into a legal quagmire, with implications under the Anti-Terrorism Act and allegations of aiding and abetting liability and civil conspiracy liability.
Similarly, Lafarge S.A., a global building materials manufacturer and its Syrian subsidiary faced severe consequences for providing material support for terrorism. The gravity of this situation led to fines and forfeiture amounting to millions of dollars. These cases serve as a cautionary tale, emphasizing the importance of meticulous scrutiny and ethical practices in corporate dealings to avert unwitting involvement in terrorism financing.
The intertwining of corporate interests with organizations linked to terrorism underscores the pressing need for stringent regulatory frameworks and corporate governance to curb terrorism financing. These measures are essential to safeguard the integrity and reputation of businesses while contributing to global efforts in combating terrorism financing.
The perils of terrorism financing for companies underscore the critical imperative for vigilance and ethical conduct in the global business landscape. As companies navigate complex global networks, the need for thorough due diligence and ethical business practices cannot be overstated. The nexus between corporate activities and terrorism financing is a timely reminder of corporations’ profound responsibility to uphold ethical standards and contribute to global security efforts.
