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Julian Davies was a Major in the British Army. He commanded a Parachute Regiment company in Kosovo and a helicopter squadron in Northern Ireland, before serving as an operations officer in Baghdad, during one of the most challenging stages of the Iraq insurgency. Since 2005, he has worked in high-risk areas of the Middle East and Eastern Europe, including Pakistan, Kazakhstan, Yemen, Saudi Arabia, Libya and the Arabian Gulf. Now Head of Consulting for Corporate Risk at Salamanca Group, he advises clients on how to navigate high-risk environments.

What is your take on reports that transnational organised crime (TOC) is funding terrorism? Have you witnessed a shift? Does it mean the terror threat is rising?

“As I’ve spent nearly 20 years in affected areas, I’ve watched the shift, and organised crime has certainly become a key source of revenue for terrorist organizations.  TOC itself is also more profitable than ever - I believe the last UN report estimated it at USD 1 trillion a year. The thing is, sanctions sometimes work to stop states from funding terrorists; they have no impact on criminals.

“The weakness of government does not automatically mean that a terrorist group will take over. That is rare. A certain degree of exploitation takes place, and there is a spectrum of criminality which starts to blend into terrorism.”

“Cartels are likely to fund terrorists, or to start conducting their own violent activity. Funding provides the initial contact between criminal and terror groups. They form alliances, and each group takes advantage of the expertise of the other—it is a complex picture.”

Ideological terrorism gets a lot of media attention, but is ideology still the biggest terror incentive?

“It is still one motivator, but maybe not the main one. A growing number of terrorist offshoots continue to use ideology as a pretext for attracting adherents, while for many in the organization, the incentive has become financial.

“Smuggling and other illegal business is part of the natural social fabric in some places, like the Sahel. (The Sahel is the Trans-Saharan region between the southern Saharan border and the Sudanese savannah.) There, Al Qaeda in the Islamic Maghreb (AQIM) displays at different times characteristics of an ideological organization, and at others strong characteristics of a criminal one. Recruits are attracted by the potential financial gains of working alongside ideological terrorist groups.  Kidnapping is a convenient tactic, because it simultaneously brings in significant funds through ransom payments, and at the same time gratifies the ideological aim of punishing infidels.”

Has crime-sponsored terrorism made it more dangerous for legitimate businesses to operate in these areas?

“Not necessarily, and not in itself. It can be a contributing factor.”

“The extent to which terrorists or organized crime groups dominate an area depends on the degree to which state control has been lost.

“Assessing that degree is crucial to determining whether business is possible at all, and if it is possible, what you have to do to protect yourself. You have to be able to translate the understanding of the threat into practical, real-world measures to protect your business and your employees."

“The current situation in Libya provides a clear example of how emergent militant groups with strong funding from illegal activities can have a negative effect on the business environment, and make it extremely hard to operate. At this point, the increasing assertiveness of militant groups in parts of Libya raises questions about the feasibility of doing business in those areas.” 

Are there any no-go zones?

“Yes, there are some no-go zones in the context of legal commercial activities. Areas dominated by Boko Haram or Al-Shabaab, parts of Syria, and Northern Iraq, for example.

“It is the perennial challenge: How much risk is too much? You have to distinguish between tourist safety and business safety. Areas that are risky for unguarded tourists could be safe enough for informed, commercial operators. Businesses have the resources to protect employees, and to navigate around dangers.

“Of course, that’s only true after company leaders take a good, hard look at reality. It’s no good pretending that terror and crime motivators don’t translate into a real, physical threat. For example, there were about 15 kidnappings in the Yemeni capital last year, while the general condition there was still stable. However, the targets were teachers, students, and NGO workers who underestimated the risks in the region. At that time, recognizing the risk and imposing strict protection measures could have prevented most of those incidents.

“In higher risk environments, at the most basic level, companies need to develop good situational awareness of the local threats. Based on that, there needs to be an appropriate and very often a strict regime of physical and procedural mitigation measures. This could involve the reduction of expatriate manpower, and the use of armoured vehicles and armed escort guards on a routine basis. These kinds of measures can provide a reasonable guarantee of safety and make it possible to continue to conduct commercial business.

“Long experience in these crisis zones teaches us to segregate the risks into tightly defined areas. Then we can identify highly effective protection and mitigation measures. Any business that has learned a tough lesson, after failing to invest in protection and mitigation the first time, will tell you that it costs far less than a ransom, in more ways than one. Protection is also a major deterrent to terrorists and criminals. It is very rare for them to incur the risk of attacking protected corporate operators. In almost every case, mitigation reduces risk to the point that it is reasonable to proceed against it.” 

Some say criminal terrorists represent a rising threat of strikes on the US and the UK. Do you agree?

“I’d have to agree with the UK’s Home Office announcement on August 29th: a terror threat is likely. If you look at the growing number of criminal terrorists flush with capital, the chances of new attacks on the US and the UK are rising.

“Without a strong funding base, it is unlikely that a terrorist group would ever reach beyond its local origins. The groups with strong funding are the most likely to export violence internationally.

“Unfortunately, it is impossible to predict how that will look. I’ve worked with London organizations that want to focus their energy and money on protecting against car bombs, very specifically. Others want to brace themselves against cyber attacks. The only thing we can predict is that terrorists will try to do the unexpected. If you really believe that an attack is possible, and you want to protect lives and your bottom line, then you’ve got to take a broader approach, and cover your bases. 

“It’s the same investment dilemma facing companies in the high-risk zones. Is it worth the financial investment, to guard against low-probability, high-impact risk? It is a clear matter of judgment for each business. The key is to identify the threats that are pertinent to your organization. Understanding the real threats, in depth, is what allows companies to make informed decisions, use resources efficiently, and build a coherent mitigation strategy.”


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