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How Do Jihadists Get their Finances?

By Dr. Haytham Mouzahem for Islamist Gate –

It was not surprising what the New York Times revealed on August 20, 2014 that ISIS had pressed the United States to provide 100 million Euros (about $132 million) as ransom for the release of the American journalist James Foley before killing him. But the United States – unlike several European countries that have funneled millions to the terror group to spare the lives of their citizens — refused to pay.

Collecting ransoms by kidnapping Western hostages represents one of the most important means of funding  ISIS, in addition to the other funds by levies and oil and arms smuggling.

While Al-Qaeda’s network was first funded by wealthy donors, “kidnapping for ransom has become today’s most significant source of terrorist financing,” said David S. Cohen, the Treasury Department’s Under-Secretary for terrorism and financial intelligence.

According to the New York Times of July 30, 2014,  Al-Qaeda has increasingly funded its terror operations thanks to at least $125 million in ransom paid since 2008, largely by European governments to free western hostages. The payments reached $66 million in 2013 alone.

The New York Times listed more than $90 million paid to Al-Qaeda in the Islamic Maghreb since 2008 — by Switzerland, Spain, Austria, and a state-controlled French company as well as two payments from undetermined sources. While Al-Qaeda in the Arabian Peninsula reportedly received nearly $30 million in two payments, one from Qatar and Oman, the other of undetermined origin.

Many Iraqi official sources and witnesses in the areas controlled by ISIS said the terrorist group has imposed some kind of royalty payment or tax, for freeing the soldiers and policemen. They asked each one to pay one million Iraqi dinars.  They have also claimed that ISIS has forced the public sector employees in Kirkuk, Mosul, Nineveh, and Diyala to pay about 40% of their salaries to the group, in order to fund its militants and to recruit fresh fighters.

The governor of Diyala province, Muthana al-Tamimi, has told Iraqi press that most of the recent farm fires were punishments of the owners due to their refusal to pay “royalties” to ISIS.

According to sources in Fallujah, ISIS imposes about 500,000 dinars on each fuel tank that enters the city, west of Baghdad.

In Syria, the areas occupied by ISIS, as al-Riqqa, Deir al-Zour, alBab, and Manbej witness daily violations. The terrorist group has imposed a tax of  15,000 Syrian pounds on the shops in Manbej, under the pretext of building a mosque, although the city is full of mosques.

Experts has estimated the ISIS income from the oil fields in Both Syria and Iraq between one million and two million dollars per day and about 730 million dollars annually. This is enough for the group to fund its operations in Iraq and other neighboring areas.

Oil experts said that the ISIS is smuggling the oil of both Iraq and Syria through Turkey border, as well as selling the fuel inside the areas they control to the Syrian regime of Bashar Assad.

Reports have estimated the ISIS wealth following its control of Mosul city and other areas in North and West of Iraq, of more than $2 billion. But such reports cannot be independently verified.

The US has said that the terror group’s annual revenues go “well beyond” those of al Qaeda of Osama bin Laden during its heyday in the late 1990s and early 2000s,.

It noted that ISIS “requires drivers to pay ‘road taxes’ in territories it controls. It’s like the Mafia. When it sees an opportunity to make money, it jumps in with both feet.”

But intelligence experts believe that the group is burning through money nearly as quickly, fighting a two-front war in Syria and Iraq and trying to govern the self-declared “caliphate” it has recently established.

In June, the group raided Mosul’s central bank and other smaller banks in the Nineveh province in Iraq. Initial reports said the group had made off with as much as $400 million in currency and gold.

In addition to ISIS self-generated funds, Al-Qaeda affiliates are also believed to be still relying on donations from wealthy Gulf state patrons, in Saudi Arabia, Qatar and Kuwait. They supported the Syrian branch of Al Qaeda called the Al Nusrah Front, and other extremist Sunni groups fighting against the Syrian regime.

The outgoing Iraqi Prime Minister Nouri Al-Maliki has been publically accusing Saudi Arabia and Qatar of funding the IS in the past many months. However, those allegations can’t be proved since the most funding is secret and came through individual donations. The U.S. treasury is well aware of this activity and has expressed concern about the flow of private financing.

However, some has accused Qatar’s government of funding the ISIS. The German Development Minister Gerd Mueller suggested on August 21 that Qatar might have played a role in funding the Islamic State group. He added In a television interview with public broadcaster ZDF, that it was important to examine who was financing the group, and that “the key word is Qatar.”

But Qatari Foreign Minister Khalid bin Mohammed al-Attiyah denied this allegation and said in a statement: “Qatar does not support extremist groups, including ISIS, in any way”.

Ironically, if you want to transfer $3000 to a relative or friend, the authorities would investigate and know the purpose of funding and the relationship between the sender and receiver. One can wonder how hundreds of millions dollars have been transferred to the terrorist group in Iraq and Syria, without the surveillance of the governments.

As it has since Sept. 11, 2001, the U.S. Treasury Department is taking steps to cut extremists off from their foreign financiers. For instance, on August 6, Treasury announced it was imposing sanctions on three key terrorist financiers, including ‘Abd al-Rahman Khalaf ‘Ubayd Juday’ al-‘Anizi — an individual who allegedly has helped ISIS transfer funds from Kuwait to Syria and has helped pay for foreign fighters traveling from Syria to Iraq.

 

Dr. Haytham Mouzahem

*Dr. Haytham Mouzahem, Director of Beirut Center for Middle East Studies. He is a Lebanese scholar, analyst and researcher specializing in Middle Eastern and Islamic affairs. He holds a PhD in Philosophy and Islamic Studies, as well as BA in Journalism. He is a columnist, a political commentator, a regular contributor to Al-monitor, the Atlantic Post, Al Hayat, Al-balad. His work has appeared in many Arab renown academic publications.

 

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