The Islamic State is far from bankrupt. The group may have lost the majority of its territory, but it likely anticipated this eventuality and prepared financially. The group is reported to have stashed millions across the region through investments in companies in Iraq, the purchase of gold in Turkey, and the transfer of millions to its affiliates. Iraqi experts estimate that the group managed to transfer around $400 million from Iraq/Syria. The funds were moved primarily through the hawala network, with the hawaladars using WhatsApp to communicate with each other.

Some of these funds ended up in Turkey, and are being ‘laundered’ (or rather, obscured) through investments, potentially in front companies.

When the group is able to control or influence territory, they are believed to raise money through criminal activities including kidnapping for ransom, extortion, robbery, theft, drug smuggling, and trafficking in antiquities, and may turn to extorting construction companies reconstructing Mosul and other devastated cities.

Analysis: It comes as no surprise that the Islamic State managed to prepare for its eventual downfall financially – the group demonstrated excellent financial management (for a terrorist group), and certainly had the ability to plan long-term. Sending funds to Turkey, however, is likely just the tip of the iceberg. From Turkey, funds could have been sent to a variety of other jurisdictions in preparation for longer-term investment, for attacks, to sustain networks and leadership, or to finance other nascent terrorist groups.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Category

ISIL, Terrorist Financing

Tags

, , , , , , ,