August 21, 2022No Comments

Africa: Insecurity of Mobile Banking and Normative Emergency

Authors: Saron M. Obia and Shams Jouve.

While mobile payment already represented a technological success a decade ago, its use exploded in the post-pandemic world. This generalization should be a matter of great concern, as mobile banking is one of the most efficient tools used to finance criminal and terrorist activities on a global level. Indeed, technology facilitates the financing of illegal organizations which benefits from their rapidity, mainly anonymous nature, and the lack of legislation. 

The African continent is particularly affected by the insecurity of mobile banking platforms. This article tends to raise awareness upon how the disrespect of legal norms by mobile operators and the lack of vigilance of the concerned states provoke dangerous opportunities for illegal organizations. This alarming situation must be considered to adopt strong and efficient policy methods and look after their actual enforcement.

Security menace posed by mobile payment in Africa 

Mobile Payment and Cyber Criminality

One of the major services rendered by mobile operator in Sub Saharan Africa is mobile payment. First, the cheap rate for transfers, in some cases receipt is not issued or required, and the sender does not need to have a phone, which creates anonymity of the individual. Then, the sale of Sim cards at a low price (100xaf-300xaf in Cameroon), and sometimes identified with the sale agent’s credentials is a menace to population.

Cybercriminals exploit Sim cards registered with credentials of airtime vendors to perpetrate crimes. Some create accounts with identity cards obtained from the streets. Often at times, interns and even workers (inside threats) in these mobile operating companies provide information of profile individuals to be victimized by cybercriminals.

Cryptocurrency and bitcoin have become more secured channel used by cybercriminals. When someone is scammed in Europe, they require payment via cryptocurrency or bitcoin. When it is done, the transaction is channeled to a mobile money number before being withdrawn.

Money Laundering

With the advent of mobile payment, money launderers no longer use banks, because of traceability of funds via bank to bank. They now transfer money to different persons in Europe via mobile money, and when they need money, it is sent back to them. For instance, in some Sub-Saharan African countries, money launderer will send 300000xaf-500000xaf to five different persons at a nearby agent without requiring a receipt or without being identified. After which, they can order a close person to do the same with other contacts either to an individual in Africa or Europe. When they need money to carry out a task, the person sends, and is considered legit.

Terrorist Financing

Terrorist financing is a major threat in the global war on terror. With the evolution of technology, which is being exploited for national security and by terrorist, mobile payment creates another avenue for terrorist groups to be easily sponsored. An authority intending to sponsor terrorist activities, will not use his phone to effectuate a transfer, it will rather go to a nearby agent give the money to be transferred, send an SMS (done), and mission will be carried out. More so, through cryptocurrency and bitcoin, terrorist can exploit some mobile payment agents to effectuate their cash-out. Money paid via crypto, is converted and paid through mobile payment, for mission to be carried out.

Victimisation of Clients 

Phishing and Smishing are two methods used by cybercriminals to swindle funds from clients with mobile money accounts. They either send a message, requiring an individual to change their password due to a breach on system of operating company, or send message requiring a client to valid with their mobile money pin and ‘game over’. Clients are increasingly losing their funds to these schemes and some even commit mistakes when transferring money. There is need for mobile companies engaged in mobile payment to review some of their policies in relation to services offered.

Policing methods to be adopted by African states and operating companies

Mobile Companies

Mobile operating companies have helped change the landscape of information and communication technology. Though, several innovations are available, cybercriminals, money launderers and staff (insider threat) equally exploit these services to make money and commit crimes. There is need for these companies to review the pattern for mobile money transaction above a certain amount, though corruption will still enter the ‘game’. Moreover, these companies must sort a system to identify Sim cards before sending to the market. In relation to client service, mobile companies must sort out a recovery method when a mobile payment is done to a wrong number. They could charge a certain amount (250xaf-300xaf) for recovery of funds of the individual. 

Law Enforcement and State

Policy and regulation of telecommunication industry relay on the state. The increasing victimization of clients and terrorist financing through this method of payment, requires states to double their efforts in the fight against transnational crimes. States must ensure that mobile operators which offer such services must have written contracts with clients. They must ensure that mobile payment is in accordance with regulations of states and region. Law enforcement officers should work alongside mobile operators to track and apprehend cybercriminals and those engage in money laundering through mobile payment. Innovation should not be a menace to national security, neither should be threat the life of citizens.

May 17, 20221 Comment

How innovation in terrorism financing explains Hezbollah’s financial success

Author: Camilla Cormegna.


Terrorism financing is vital for a terrorist organisation to operate and carry out terrorist activities, but resources are also spent to provide community services such as welfare, education, public and protection service replacing governments as the main providers. An example of this is demonstrated by Hezbollah, the focus of this analysis, whose social services offered to the Lebanese Shiite population allows it to secure political supports while acquiring a sacred and untouchable status in Lebanon. To sustain its organisational establishment while pursuing ideological and political objectives, Hezbollah is estimated to earn $1 billion annually through various sources. 

Hezbollah depends on an array of revenue resources, although the bulk of its funding comes from Iran’s state-sponsorship, which provides around $800 million annually. This external funding comes with drawbacks, as sponsorship undermines group’s autonomy and pressures and sanctions on Iran negatively affect the state’s financing of Hezbollah. Therefore, Hezbollah is forced to innovate and diversify the sources of income to ensure financial sustainability. The group now leverages drug and human trafficking, diamonds smuggling, money laundering, propaganda televisionlocal exactions, and diverting charitable contributions

The article argues that Hezbollah owes its success to innovation in terrorism financing, making it one the most proficient and technically skilled terrorist groups in the world. Innovation refers to ability of terrorist groups to develop and adopt new financial techniques when pressured by countering terrorist financing strategies. This process can entail different phenomena such as the introduction of new tradeable commodities, new methods of production, new supply sources, and new market opportunities. The article presents Hezbollah’s success by exploring three profitable ventures that demonstrate the group’s ability to exploit lucrative opportunities: their sophisticated money-laundering scheme, the terror-crime nexus and the group’s ties with Venezuela, and the role of the Lebanese diaspora. 

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A sophisticated money laundering scheme

Hezbollah runs an extensive network of illicit trade involving cars and drugs to launder money. In 2015 it was reported that Hezbollah purchased used cars in the United States which were then shipped and sold in West Africa while at the same time, drugs were shipped from Colombia to Europe. Both proceeds were sent to Lebanon through Hezbollah controlled money laundering channels and then deposited into the financial system. It is estimated that between 2007 and 2011, Hezbollah, with the help of the Lebanese Canadian Bank (LCB) and exchange houses, laundered $300 million. The LCB case shows the innovative adaption of Hezbollah, as after the 2011 scandal which detected and closed LBC’s money service businesses (MSBs), the terrorist organisation soon replaced MSBs resuming with the money laundering. This caseillustrates how Hezbollah’s facilitators are leveraging global trade and financial institutions to carry out illegal activities and how complex and sophisticated their system is, but it also demonstrates how facilitators among the Lebanese diaspora community are vital in supporting the organisation.  Moreover, counterterrorism financing (CTF) deficiencies and constraints allow Hezbollah to thrive and exploit the cross-border movement of funds. Financial intelligence units’ effectiveness is achieved through information sharing which is geographically circumscribed, and compliance with the Financial Action Task Force (FATF) legislative and regulatory standards is lacking in the Middle East

The terror-crime nexus with FARC and Venezuela’s role

As the money laundering scheme briefly introduced, Hezbollah has developed its own criminal activities such as the drug trade and it has done so by developing a strategic cooperation with FARC. Although their relationship is not political neither revolutionary but done to guarantee funds and financial independence through the diversification of income sources, the coupling of these organisations allows them to share operational knowledge, making them a “hybrid narc-terrorist network”. Hezbollah’s involvement with FARC and the drug trade was revealed in 2008 through the US and Colombian Operation Titan which dismantled a cocaine smuggling and money laundering ring which profited both organisations. 

Hezbollah is also tangled up with the Venezuelan government, which guarantees a safe haven to carry out their operations. Hezbollah’s involvement with Venezuela started in the 1980s, when the organisation started to deepen its association with many Lebanese immigrants in Latin America who fled the civil war. In 2005, the then Iranian and Venezuelan presidents Ahmadinejad and Chavez came together in a series of commercial ties, laying the foundations of their relationship. There is evidence that the Venezuelan government launder Hezbollah’s money while providing them with material support for their activities, but it also employs Hezbollah sympathisers as Ministers generating revenue through the distribution of narcotics. It is the case of the current Minister of Industries and National Production El Aissami of Iraqi-Lebanese descent, involved in the drug trafficking and in the issue of diplomatic passports for Hezbollah facilitators. In this environment characterised by corruption and bribery, Hezbollah continues to thrive because Latin American countries do not recognise Hezbollah as a terrorist organisation, thus failing to enforce CFT frameworks while facilitating illicit financial flows. Moreover, Venezuela is noncompliant with 31 out of the 40 FATF recommendations, demonstrating how the regime has no intention in addressing terrorism concerns.

The role of the Lebanese diaspora

Hezbollah’s presence in international diaspora communities provides the organisation with access to criminal ventures and funds. The diaspora is comprised of Lebanese emigrated mainly to Europe, Latin America, North America, and West Africa between 1975 and 1990. Hezbollah acquired financial support from the diaspora through its commitment to the fight against Israel and the West and it translated the support into an array of financial sources as well as financiers and facilitators. A cultural practice embedded within the diaspora is the sending of remittances to Lebanon and to Hezbollah, considering its legitimate status among Shia at home, as a method of support. However, third-party funding is risky for terrorist organisations, as donors may lose interest in the cause or law enforcement activity can lead to a decline in donations. In West Africa, the Lebanese diaspora is heavily involved in the diamond trade, as diamonds are a source of donation and as an informal tax to support the organisation back home. In Venezuela, Hezbollah-tied family clansparticipate in the local drug trade and money laundering, operating with protection from the regime. In Europe, Hezbollah raises money through charities which is legal in European countries because Hezbollah is not listed as a terrorist organisation, only its military wing is banned, allowing the group to raise money and collect donations for Hezbollah-tied associations. A terrorism designation would freeze al funds, financial assets, and economic resources of the group and would be a powerful CTF approach given the group’s vast network.


The case of Hezbollah is emblematic of innovation in terrorist financing because to achieve financial independence and to anticipate CTF approaches the group has evolved and diversified its sources of funding. This, in turn, has allowed the organisation to become one of the most technically capable and proficient terrorist groups in the world. With the advancement of technology, will the group continue to innovate its income sources by developing fund-raising schemes using cryptocurrencies? Maybe. Hezbollah has already received some cryptocurrency funding through the Iranian government, and in 2018 it was reported to have used crypto to fund part of its operations. Cryptocurrencies offer anonymity and may be used to diversify even more its portfolio, but because their supply is not flexible and their price can be controlled, terrorist organisations have so far shown reluctance to use them. Moreover, as long as the traditional financing methods are stable and not hampered by CTF efforts, the possibility of financing through cryptocurrency will not increase.