The USis adapting its money- tracking tactics to choke off Islamic State’s lucrative oil- smuggling routes and restrict its use of Iraqi and Syrian banks, the Treasury Department’s top anti-terrorism official said.
“To disrupt the market in oil derived from ISIL-controlled fields, we will target for financial sanctions anyone who trades in ISIL’s stolen oil,” David Cohen, the Treasury’s undersecretary for terrorism and financial intelligence, said today in a speech in Washington.
Cohen, outlining how the Obama administration intends to combat Islamic State’s financing methods, said the group poses a different challenge because it has gained wealth “at an unprecedented pace” from funding sources unlike those of other terror organizations.
Islamic State obtains most of its revenue through local criminal and terrorist activities such as extortion, theft and looting, Cohen said. Unlike al-Qaeda, it doesn’t get much money from rich donors and therefore doesn’t depend on moving funds between countries.
“We are working closely with others in the US government to enhance the ability of our partners in the region to choke off cross-border oil-smuggling routes and to identify those involved in the smuggling networks,” Cohen said.
Cohen said the terrorist group raises tens of millions of dollars a month, including $1 million a day in oil sales, “up to several million” a month through an extortion racket and has pocketed at least $20 million in ransoms this year. He also said “it seems” the regime of Syrian President Bashar al-Assad, in a further show of its “depravity,” has made an agreement to purchase oil from Islamic State.
He described Islamic State’s oil operations as exploiting a “deeply rooted” black market. The group sells to smugglers who move the oil outside of Islamic State’s strongholds using a variety of methods, from big tankers to small containers.
As of last month, Islamic State was selling oil “at substantially discounted prices to a variety of middlemen, including some from Turkey” who then transport the oil to be resold, Cohen said. Some of the oil that comes from Islamic State territory has been sold to Kurds in Iraq and then resold to Turkey, he said.
While the group is “probably the best-funded terrorist organization we have confronted,” Cohen said its ambitions to hold territory “are a financial burden.”
“Attempting to govern the cities, towns and sprawling territory in Iraq and Syria where it currently operates, much less delivering some modicum of services to the millions of people it seeks to subjugate, is expensive,” he said. “ISIL cannot possibly meet the most basic needs of the people it seeks to rule.”
Cohen, speaking at the Carnegie Endowment for International Peace, said that by refusing to pay ransom to kidnappers, the US reduces the chances of having Americans taken hostage. He urged other countries to adopt the U.S. policy of not paying ransom.
Turkish President Recep Tayyip Erdogan today accused the U.S. of ignoring his country’s concerns by airdropping weapons to Kurds defending a Syrian town against Islamic State.
US support for Kurdish forces fighting in Kobani, a Syrian community on the Turkish border, has opened a new rift between the NATO allies, with Turkey concerned that arming Kurds with separatist aims could imperil its own security.
“The US is delivering the aid in spite of Turkey,” Erdogan said in televised remarks during a visit to Latvia, questioning why Kobani “is of strategic importance” to the U.S. “There are no civilians left in Kobani,” and some of the airdropped weapons were seized by Islamic State, he said.