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The Yemen-based arm of al-Qaeda — flush with millions in ill-gotten gains — is gaining strength from the fractured nation's civil conflict and is sufficiently funded to carry out new terror attacks, according to a new report.
Al-Qaeda in the Arabian Peninsula (AQAP), the terror cell behind Paris' Charlie Hebdo massacre in 2015 and a descendant of the group behind the 2000 bombing of the U.S.S. Cole, earns tens of millions of dollars per year and remains "well funded," according to a study by the Foundation for Defense of Democracies, a Washington, D.C.-based think tank. The group derives its financing from various sources — including taxation, looting, ransoms and oil and gas sales, according to the FDD's analysis.
Yemen is the battleground for a fierce proxy war between Saudi Arabia and Iran, with both countries arming opposite sides in a civil conflict. The country sits atop billions of barrels in proven oil reserves, a lucrative source of cash that has become a fulcrum in the tug-of-war between warring Sunni and Shia factions.
The FDD's report found that the domestic turmoil is being exploited by AQAP, particularly because the group controls swaths of Yemen's financial centers.
According to the FDD, AQAP is known to have pilfered at least $60 million from Yemen's central bank, and at one point earned about $2 million per day through taxes in Mukalla — a port which the organization controlled until last year. From 2011 to 2013, the group pulled in roughly $20 million per year in robberies, ransoms and fuel taxes.
"The income earned in the past few years is likely enough to sustain the group for some time," according to Yaya J. Fanusie and Alex Entz, the FDD report's authors.
"Yemeni officials estimate AQAP needs about $10 million per year to operate. Given the surplus the group earned in Mukalla from taxes and bank looting, it is likely that the group maintains considerable cash reserves," Fanusie and Entz wrote.
The FDD analysis dovetails with similar findings from the U.S. State Department and Middle East think tanks, and comes as major economies redouble their efforts to curb terrorism financing. In May, the U.S. and Persian Gulf countries agreed to collaborate to stem the flow of terror cash as part of a new working group.
The task of stemming the flow of money to terrorism is complicated by Yemen's large informal economy and an embryonic financial system, which the State Department noted is "vulnerable to money laundering and other financial abuses — including terrorism financing."
Still, Yemen is a member of a Middle East and North Africa Financial Action Task Force that combats money laundering and terror financing.
In its report, the FDD suggested that major economies curtail AQAP's funding in several ways, including the prohibition of ransom payments and pressuring Gulf countries to police donations from charitable organizations. Bogus charities and terror financiers often use such fronts to funnel illicit money to AQAP and other terror groups around the world, the FDD noted.
Among its recommendations, the FDD also said the government of Yemeni President Abdrabbuh Mansur Hadi should end its alliance of convenience with AQAP, given that the two sides are "battlefield allies" at war.
The stakes are high and rising: An analysis by the International Crisis Group said recently that Yemen's civil war has enabled extremists to build a base of power in the heart of the Middle East. "The Yemeni branch of al-Qaeda (AQ) is stronger than it has ever been," the group said.
"As the country's civil war has escalated and become regionalized ... AQAP is thriving in an environment of state collapse, growing sectarianism, shifting alliances, security vacuums and a burgeoning war economy," the ICG wrote. With the country a hotbed of instability, "reversing this trend requires ending the conflict that set it in motion," the group added.