ISIL Now World’s Wealthiest Terror Group

WASHINGTON (Dispatches) -- The ISIL has fast become one of the world's wealthiest terror groups, generating tens of millions of dollars a month from black market oil sales, ransoms and extortion, officials said.

Date: 24 October 2014 - 22:03

News ID: ۶۶۲۸

It earns $1 million a day alone by selling crude oil from fields captured when the group swept across Iraq and Syria earlier this year, said David Cohen, Treasury undersecretary for terrorism and financial intelligence.
Because the group has "amassed wealth at an unprecedented pace" from different sources than most terror groups, it presents a particular challenge to the U.S. working to choke off money flows.
"We have no silver bullet, no secret weapon to empty ISIL’s coffers overnight. This will be a sustained fight, and we are in the early stages," Cohen said, outlining what he called a three-pronged effort.
ISIL is now "considered the world's wealthiest and most financially sophisticated terrorist organization", said Marwan Muasher, vice president at the Carnegie Endowment for International Peace.
Unlike Al-Qaeda, ISIL does not attract most of its funds from deep-pocketed rich donors, often in Persian Gulf countries, or from state sponsors.
Yet "with the important exception of some state-sponsored terrorist organizations, ISIL is probably the best-funded terrorist organization we have confronted", Cohen said, warning its revenue sources were "deep and diverse".
Oil sales alone from captured refineries are allowing the militants to produce some 50,000 barrels a day sold "at substantially discounted prices to a variety of middlemen, including from Turkey" who then resell it.
Oil has also been sold to Kurds in Iraq, and Cohen said the administration was looking carefully at the middlemen involved in the smuggling.
"At some point there is someone in that chain of transactions who is involved in the legitimate or quasi-legitimate economy. They have a bank account. Their trucks may be insured," he said.
The group has also pocketed about $20 million this year from kidnappings, particularly of journalists and European hostages.
And it demands money from local businesses in cities and towns through "a sophisticated extortion racket" plunders antiquities and sells off women and girls as sex slaves.
Cohen vowed the U.S. would hit hard against those found buying illegal oil. Sanctions would follow, he said, and it would not just be a question of cutting them off from the U.S. banking system.
"We can also make it very difficult for them to find a bank anywhere that will touch their money or process their transactions," Cohen said.
Washington is also working with its allies to adopt the hard line taken by the U.S., and refuse to pay ransoms to free kidnap victims.
Much of the U.S. focus has been on Persian Gulf countries, which in the past have come under fire for allowing the financing of terror groups.
Significant progress has been made in countries like Saudi Arabia and the United Arab Emirates, Cohen said, both nations he has visited in the push against ISIL.
But in Qatar and Kuwait, seen in the past as "permissive jurisdictions for terrorist financing... there is more work to be done".
Despite the group's wealth, however, it still does not have enough money to pay for basic services to Iraqis in territory it has captured, and could face local opposition, Cohen said.
"A terrorist organization’s financial strength turns on its ability to continue to tap into funding streams, its ability to use the funds that it has, and also its expenses," he told reporters later at the White House.
Iraq had earmarked some $2 billion for the local services in the provinces now under ISIL's control. The militants have nowhere near enough funds to meet the shortfall, Cohen said.
These figures are not even counting more than $400 million ISIL militants looted from the Iraqi central bank in Mosul.
Like most terrorists, ISIL started out dependent on the largesse of a handful of supporters, and the group continues to run a surprisingly successful campaign soliciting donations through social media. Large donations have been reported out of Saudi Arabia, Qatar, and Kuwait.
But as those nations try to close the spigot on the direct donations, it matters less and less for ISIL, which as a de facto nation state now has natural resources to exploit and millions of civilians to tax to pay for its assorted military adventures. As the U.S. and others have shown in the past, that’s a strategy that can keep wars going for quite some time.