Isis still has huge funds and sympathetic donors in the Middle East

The Islamic state terrorist organisation has retained elaborate fund-raising efforts even after losing its principal oil revenue money-earner following the collapse of its caliphate in Iraq and Syria. Isis finances are suddenly a big issue after the capture of their top financier by Iraqi security forces. At the height of its caliphate empire when Isis was earning $1 million a day from selling oil on the black market from dozens of seized oil fields, a US Treasury official described the militants as “the richest terrorist organisation on Earth”. The official, David Cohen, then undersecretary for terrorism and financial intelligence at the treasury, and now deputy director of the CIA, estimated Isis was generating $1 billion a year, half it from illicit oil transactions, and the rest from extortion, kidnapping for ransom, human trafficking, antiquities smuggling and foreign donations from sympathisers in the Middle East. Today, it’s estimated that Isis still has hundreds of millions of dollars to finance its terrorist activities and without the need to put huge sums aside to administer and fund its quasi-government caliphate sprawled across large territorial areas of Iraq and Syria. That expensive function is no longer required after the defeat by the US-led coalition. Cohen told Congress in 2014 that Isis was “financially sophisticated”, and its ability to generate funds in more recent years through criminal activities, masterminded by a “minister of finance”, has remained undimmed. In the past, when it ruled over up to eight million people , Isis earned as much as $350 million a year from extortion by enforcing tax payments from local civilians and businesses, and an annual $25 million from kidnapping. Acknowledging the continuing ability of Isis franchises to raise funds and launder it through a complex system of money transfers, the international community has stepped up efforts to disrupt the organisation’s revenue sources and “banking” methods. The counter-Isis finance group of the global coalition to defeat Isis, established in 2015, still meets regularly to try and prevent Isis from exploiting the world’s banking systems. Isis relies on “money service businesses”, organisations (not banks) that manage transfer or currency exchange transactions, including the so-called Hawala system of money-brokers in the Middle East, Africa and Asia, as well as couriers. In May the US Treasury announced targeted sanctions against a money service business and three of its operators in Turkey who played a key role in transferring Isis funds to Syria and Iraq. US officials said the company in Turkey had connected Isis with a network of international donors. “Isis continues to exploit formal financial systems despite the loss of its territorial caliphate in Iraq and Syria. Isis also has access to tens of millions of dollars in cash reserves disbursed across the region,” the US Treasury said.