One key question we have when we talk about the rise of the so-called ISLAMIC STATE in Iraq and Syria, is where this group is getting its MONEY from.
As part of the international campaign to defeat the Islamic State, the US and its allies are employing a range of strategies to try and choke off the terror group’s FUNDING which is both extensive and underpins its expansionist ambitions.
Some experts say previous strategies, like that used against Al Qaeda’s finances, simply won’t work this time. Why not? The BBC’s Defence and Diplomatic Correspondent Jonathan Marcus explains:
WHERE DOES THE SO-CALLED ‘ISLAMIC STATE’ GETS ITS MONEY FROM, AND WHAT STRATEGIES ARE THE US AND ITS ALLIES USING TO CUT OFF THIS FUNDING?
By BBC Defence and Diplomatic correspondent, Jonathan Marcus
Most of the attention from the US and its allies at the moment is focused on the military struggle against ISIS – the so-called Islamic State.
Militants of the Islamic State posing with the trademark Jihadists flag after they allegedly seized an Iraqi army checkpoint in the northern Iraqi province of Salahuddin. (Photo: AFP)
That means the preparations for stepping up air strikes; the training of the Iraqi army and so on.
But this is a movement that has to be confronted on multiple fronts, and among these will be efforts to clamp down on the organisation’s ability to fund its activities.
This is not going to be easy.
Islamic State is one of the richest terrorist movements in history. It is a hybrid organisation with many of the attributes of an independent state, controlling a significant swathe of territory across Syria and Iraq. It draws its funding from a number of sources.
There are its own criminal activities – smuggling and extortion. Here it is building upon the tradition of its forerunner Al Qaida in Iraq. It has appropriated considerable assets from banks in the towns that it has seized. It has a further funding stream from private donors in the Gulf with Qatar and Kuwait being significant sources of fund-raising (prompting sensitive diplomatic tensions with Washington).
It also makes millions of dollars from oil revenues. Western intelligence analysts have tracked oil supplies crossing the border from Iraq into Turkey where much of the oil is traded on the black market.
In public US spokesmen say little about this trade but the former US Under Secretary of the Treasury for Terrorism and Financial Intelligence, Jimmy Gurule, says that the Obama Administration must be unequivocal in the signals it sends.
Islamic State militants on a armoured vehicle driving in Niveneh province, Iraq. (Photo: AFP)
He says the message “needs to be loud and clear to businesses operating in the Middle-East and beyond, that they are prohibited from buying ISIS oil”.
“Any oil” he goes on “being sold by ISIS, or companies that are controlled by ISIS, if the buyer is aware of that, they should not do business”.
Such factors underscore the ambivalence within the coalition that Washington is constructing to counter Islamic state’s advance.
The organisation’s financial muscle greatly complicates the picture.
The fact that funding comes from illicit oil sales and from donations in the Gulf underscores the multiple divisions in the region.
Many Sunni Arabs while fearing Islamic State, also see it as a threat to Iran and its Shia axis.
And these mixed feelings make it that much harder for Washington to hold this disparate coalition together.
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Islamic State militants on a armoured vehicle driving in Niveneh province, Iraq. (Photo: AFP) (download image)
Militants of the Islamic State posing with the trademark Jihadists flag after they allegedly seized an Iraqi army checkpoint in the northern Iraqi province of Salahuddin. (Photo:AFP)(download image)