Written by Phil Stewart And Lesley Wroughton | From Reuters

When Washington imposed sanctions in June 2012 on Boko Haram leader Abubakar Shekau, he dismissed it as an empty gesture.

Two years later, Shekau’s skepticism appears well founded: his Islamic militant group is now the biggest security threat to Africa’s top oil producer, is richer than ever, more violent and its abductions of women and children continue with impunity.

As the United States, Nigeria and others struggle to track and choke off its funding, Reuters interviews with more than a dozen current and former U.S. officials who closely follow Boko Haram provide the most complete picture to date of how the group finances its activities.

Central to the militant group’s approach includes using hard-to-track human couriers to move cash, relying on local funding sources and engaging in only limited financial relationships with other extremists groups. It also has reaped millions from high-profile kidnappings.

“Our suspicions are that they are surviving on very lucrative criminal activities that involve kidnappings,” U.S. Assistant Secretary of State for African Affairs Linda Thomas-Greenfield said in an interview.

Until now, U.S. officials have declined to discuss Boko Haram’s financing in such detail.

The United States has stepped up cooperation with Nigeria to gather intelligence on Boko Haram, whose militants are killing civilians almost daily in its northeastern Nigerian stronghold. But the lack of international financial ties to the group limit the measures the United States can use to undermine it, such as financial sanctions.

The U.S. Treasury normally relies on a range of measures to track financial transactions of terrorist groups, but Boko Haram appears to operate largely outside the banking system.

To fund its murderous network, Boko Haram uses primarily a system of couriers to move cash around inside Nigeria and across the porous borders from neighbouring African states, according to the officials interviewed by Reuters.

In designating Boko Haram as a terrorist organisation last year, the Obama administration characterized the group as a violent extremist organisation with links to al Qaeda.

Read more at Reuters