Bank loans, 'government salaries' – All about Islamic State funding network

According to FATF report, ISIS represents a new form of terrorist organisation where funding is central and critical to its activities.

Bank loans, 'government salaries' – All about Islamic State funding network

New Delhi: As the global powers are struggling hard to curb the world's most dreaded terrorist group, Islamic State of Iraq and the Levant, also known as the Islamic State of Iraq and Syria is innovating to derive its finances.

Besides bank loans, human trafficking, illegal sale of oil and gas, extortion from agriculturists, salary payments to Iraqi government employees and some other means are being adopted by the ISIS to fund its activities.

According to Financial Action Task Force (FATF) report, ISIS represents a new form of terrorist organisation where funding is central and critical to its activities.

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The FATF says Islamic State earns revenue primarily from five sources, listed in order of magnitude:

  • Illicit proceeds from occupation of territory, such as bank looting, extortion, control of oil fields and refineries, and robbery of economic assets and illicit taxation of goods and cash that transit territory where ISIS operates.
  • Kidnapping for ransom.
  • Donations including by or through non-profit organisations.
  • Material support such as support associated with Foreign Terrorist Fighters (FTFs).
  • Fundraising through modern communication networks. These revenue streams are inconsistent and shift based on the availability of economic resources and the progress of coalition military efforts against ISIL.

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IS has derived a significant portion of its wealth from controlling the bank branches in Iraq where it operates. In its perceived role as the local governing body, ISIL treats state-owned and private banks differently. The cash at state-owned banks are ISIL “property” while the cash at private banks largely remains in the vaults, to be taxed by ISIL upon customer withdrawals.

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The US estimates that ISIL has generated, or has had access to the equivalent of at least a half billion US Dollars (USD) in cash alone as it has taken control of state-owned bank branches located in the Ninevah, Al-Anbar, Salah Din, and Kirkuk provinces in Iraq over the latter half of 2014.