From oil to extortion, ISIL’s monthly millions in US sights
NEW YORK // ISIL makes tens of millions of dollars a month from oil sales, ransoms, extortion and private donors, and the US plans to choke off this revenue using tactics honed against Al Qaeda and the Taliban, a US official said.
The extremists in Iraq and Syria earn around US$1 million (Dh3.67m) a day from oil and petroleum products alone, which they sell to Turkish and Kurdish smugglers and middlemen as well as Syria’s Assad regime, said David Cohen, who leads Washington’s financial counter-terrorism efforts against ISIL.
Outlining US plans to target ISIL’s cash flow, Mr Cohen also praised the UAE and Saudi Arabia for steps taken since 2001 to choke off private donation networks in the Gulf, a lesser but potentially crucial source of funding for the militants in the future.
The US Treasury under secretary for terrorism and financial intelligence said the “unprecedented pace” and scale of ISIL’s revenues were bolstered by kidnap ransoms, which contributed at least $20m to its coffers this year, while extortion of residents in the vast territory it controls between Damascus and Baghdad brings in several million each month.
“With the important exception of some state-sponsored terrorist organisations, ISIL is probably the best-funded terrorist organisation we have confronted,” Mr Cohen said in a speech at the Carnegie Endowment for International Peace in Washington.
Though donations from individuals in the Gulf provide the smallest proportion of ISIL’s revenue, experts say these funding networks are likely to become of greater significance as the military operations make ISIL’s war economy harder for it to manage and as financial targeting by the international community and banks takes effect.
“We are working especially closely with our friends in the Gulf – who are stalwart partners in the anti-ISIL coalition – to ensure that they all have the tools in place to combat terrorist financing and that they all use those tools effectively,” Mr Cohen said.
“We must be prepared for the possibility that wealthy extremists will increasingly seek to fund [ISIL].”
However, Mr Cohen singled out Qatar and Kuwait for not enforcing the financial counter-terrorism legal frameworks both countries have in place. The US has been increasing pressure on both countries in recent months to do more to shut down extremist financiers.
“There are US- and UN-designated terrorist financiers in Qatar that have not been acted against under Qatari law,” he said.
Mr Cohen revealed that the US and UAE have “just initiated a bilateral terrorist financing task force”.
“We’re going to work even more closely,” he said.
A US Treasury spokesperson said no further details on the task force were available for the time being.
Mr Cohen stressed that the strategy to cut off ISIL’s financing will take time and that there is “no silver bullet”, and that pushing them from territory where they control resources through the coalition military campaign would be key.
US-led coalition airstrikes have targeted ISIL oil tankers, wells and refineries in Syria, and Mr Cohen said targeting the people in Turkey as well as ISIL’s battlefield enemies in Iraqi Kurdistan, and the Assad regime in Syria, who profit from the oil smuggling trade and access to discounted fuel, would be a central focus of the US Treasury’s sanctions.
“To disrupt the market in oil derived from ISIL-controlled fields, we will target for financial sanctions anyone who trades in ISIL’s stolen oil,” he said. “The trade in this oil fundamentally funds this terrorist organisation.”
This will be made more difficult by the fact that financial transactions around this trade are made in cash and through informal networks that do not require sending money across borders through international financial systems, but at some point the oil is acquired by someone in the formal sector who can be targeted, he said.
“The middlemen, traders, refiners, transport companies, and anyone else that handles ISIL’s oil should know that we are hard at work identifying them, and that we have tools at hand to stop them,” Mr Cohen said, adding that the US had learned how to successfully shut down informal Taliban and Al Qaeda funding networks in Afghanistan and Pakistan over the past decade.
The US is concerned about ISIL being able to launder money and have access to the Iraqi, Syrian and international banking systems through functioning bank branches on territory it controls, and it is working with Iraqi counterparts and banking executives to address this, Mr Cohen said.
Even though ISIL is the wealthiest militant group, in relative terms its financial strength is limited by a key vulnerability – its desire to govern huge swathes of territory. ISIL is already having trouble providing basic services like water and electricity in cities such as Mosul. “We will further exploit this,” Mr Cohen said.
Updated: October 23, 2014 04:00 AM