Abu Bakr al Baghdadi, leader of IS. © Balkis Press/ABACA/Press Association Images

What the US knows about Islamic State’s money

The Director of the FBI recently warned that Islamic State (IS) recruiting material is becoming more widely available in the United States
June 17, 2015
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The Director of the FBI recently warned that Islamic State (IS) recruiting material is becoming more widely available in the United States. James Comey told reporters in May that “hundreds, maybe thousands,” of Americans have been exposed to such propaganda. The FBI’s counter-extremism strategy now includes tracking IS’s money. Prospect asked the FBI for comment on its current assessment of IS’s financial capabilities. The following answers were given to us by Andrew Keller of the Department of State’s European Bureau:

1. How much money does IS have? Data from IS-controlled territory is very difficult to obtain and measure. However, we estimate that IS has amassed hundreds of millions of dollars since 2014.

2. How is IS funded? IS is funded through its robbery of banks; extensive extortion rackets; commercial activities such as illicit trading in oil, antiquities, and other goods; kidnapping for ransom; and, external donations.

3. Are its revenues increasing or decreasing? We believe IS will not be able to repeat the financial gains that we saw in 2014 associated with its territorial advances in Iraq and Syria. Moreover, coalition airstrikes, law enforcement efforts from partners in the region, and international outreach to the financial sector have all made it more difficult for IS to generate revenue.

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4. Does IS use western financial services? The US government has worked extensively within the US and with our foreign partners to make it difficult for IS to access the international financial system. We remain concerned that IS may be able to access the financial system, particularly through money service businesses.

5. If we cut off its external sources of revenue, will IS collapse? We do not believe external sources account for the majority of IS’s revenue and existing assets. IS made hundreds of millions of dollars last year robbing banks in Iraq and Syria and continues to generate millions of dollars each month through its extortion of the local population. Given that the majority of IS’s revenues derive from the lands in which it operates, reducing the amount of territory under IS control will be the most effective way to disrupt IS’s financial and economic sustainment.

6. Is it being helped by any other countries? While we are concerned about IS’s illicit networks in countries outside Syria and Iraq, we do not believe that outside governments are supporting IS. However, within Syria, we believe IS sells crude oil and natural gas to the Assad regime in exchange for money and electricity. Not only does this reflect desperation on the part of the Assad regime, but it also underscores the regime’s hypocrisy in helping fund a group that terrorises its citizens. Assad is exacerbating sectarianism and extremism not only in Syria, but in the region.

Andrew Keller oversees terrorist financing and is the Department of State’s European Bureau’s Deputy Assistant Secretary. Questions by Jay Elwes, Deputy Editor, Prospect