Terrorism financingAl Qaeda-affiliates derive most of their funding from ransom paid to free Europeans

In its early years, al-Qaeda received most of its financing from affluent donors from the Middle East, but counterterrorism officials now believe the group finances a significant portion of its recruitment, training, and arms purchasing from ransoms paid to free Europeans. “Kidnapping for ransom has become today’s most significant source of terrorist financing,” said David S. Cohen, the Treasury Department’s under secretary for terrorism and financial intelligence, in a 2012 speech. “Each transaction encourages another transaction.”

In 2003, al-Qaeda’s kidnapping operations brought in roughly $200,000 per hostage; today, terrorists can fetch up to $10 million per hostage, of which a large portion goes to al-Qaeda’s central command in Pakistan. “Kidnapping hostages is an easy spoil,” wrote Nasser al-Wuhayshi, the leader of al-Qaeda in the Arabian Peninsula, “which I may describe as a profitable trade and a precious treasure.”

Al-Qaeda’s three main affiliates — al-Qaeda in the Islamic Maghreb, in northern Africa; al-Qaeda in the Arabian Peninsula, in Yemen; and al-Shabab, in Somalia — are driving most of the kidnapping business, of which they practice common kidnapping protocols.

Trained kidnappers working for, or as, al-Qaeda affiliates tend to target Westerners visiting or working in northern and eastern Africa.The New York Times reports that upon kidnapping the victims, the terrorists make contact with their home countries via media outlets or directly through an embassy, confirming the kidnapping and later requesting a ransom for the release of their victims. A review of the history of kidnappings by al-Qaeda during the past decade shows that European countries are more likely to answer ransom demands, leading many U.S. counterterrorism officials to blame the thriving terrorism business on the willingness of European countries to pay ransoms.

“The French authorities have repeatedly stated that France does not pay ransoms,” said Vincent Floreani, deputy director of communication for France’s Ministry of Foreign Affairs. An investigation by the Times found, however, that between 2010 and 2013, a state-controlled French company paid $40.4 million as ransom for the release of four French nationals. In a few cases, ransom money is disguised as humanitarian aid to the country where the kidnapping occurred. “At least $125 million in ransom money has been paid to al-Qaeda and its direct affiliates since 2008 for kidnappings that have been reported,” the Times notes. Of that amount, $91.5 million has been paid to al-Qaeda in the Islamic Maghreb, $5.1 million has been paid to al-Shabab, and $29.9 million has been paid to al-Qaeda in the Arabian Peninsula.

The United States and Britain refuse to pay ransom to terrorists, so kidnappers tend to focus on European nationals. “We know that hostage takers looking for ransoms distinguish between those governments that pay ransoms and those that do not, and make a point of not taking hostages from those countries that do not pay,” Cohen said in his 2012 speech to the Chatham House, a London-based think tank. “And recent kidnapping-for-ransom trends appear to indicate that hostage takers prefer not to take U.S. or U.K. hostages, almost certainly because they understand that they will not receive ransoms.”

Of the fifty-three hostages known to have been kidnapped by al-Qaeda affiliates in the past five years, 33 percent were French, while smaller countries like Austria, Spain, and Switzerland, account for 20 percent of the victims. “For me, it’s obvious that al Qaeda is targeting them by nationality,” said Jean-Paul Rouiller, the director of the Geneva Center for Training and Analysis of Terrorism, who helped set up Switzerland’s counterterrorism program. “Hostages are an investment, and you are not going to invest unless you are pretty sure of a payout.”

Western countries have signed numerous agreements to end ransom paying for terrorist kidnappings, but France, Spain, and Switzerland continue to be responsible for some of the largest ransoms paid. “The Americans told us over and over not to pay a ransom. And we said to them: ‘We don’t want to pay. But we can’t lose our people,’” said a European ambassador posted in Algeria during a 2003 kidnapping. “It was a very difficult situation,” he said, “but in the end we are talking about human life.”