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ISIS: Well born on oil and social distress

The Islamic State is a well-funded terrorist group that has only grown. Where do they get their funding from? What can be done?


A variety of causes, both local and global, have led to the rise of the Islamic State (IS), which has ravaged Syria and Iraq over the past year. The organization is considered, among other things, as a result of the situation in Iraq following the war in 2003; the Syrian civil war that many would call a deputy war; the constant supply and availability of weapons and weak opponents.

The Financial Action Task Force (FATF), the OECD's money laundering group, released in February 2015 with a report on the financing of IS. The report is based on information obtained from a variety of sources, and analyzes how IS generates and uses the funds at its disposal – which is crucial for the international community to be able to shake up funding for the organization. It is also evident that IS is growing.

Oil sales. The factors that have led to the terror group's sudden emergence are, as I said, many and complex. While Iraq has failed to recover from the enormous destruction in 2003, Syria has been paralyzed by the fact that the United States has trained, armed and financed various rebel groups in its attempt to overthrow Assad, and thus make a regime change.

The result has been staggering. In both Iraq and Syria, several have been killed, and there are a record number of refugees and internally displaced persons. In addition, we see enormous destruction of cultural monuments and places of historical interest. Lately there have been great battles over Palmyra, a ruin city from ancient times and an important archaeological site in Syria. UNESCO Director General Irina Bokova has already warned that IS is destroying Iraq's cultural heritage in what she chooses to call a cultural genocide.

More than 310 people have been killed in Syria, according to the Syrian Observatory for Human Rights, since the uprising. This at the same time, according to Amnesty International, the war in Syria has displaced over 000 million people, of whom 11 million have fled internally in Syria, while 7,6 million have fled across the borders of Syria's neighboring countries. Lebanon, Jordan, Iraq, Egypt and Turkey have opened the doors to 4 percent of all refugees from Syria.

Several have raised the question of how IS in such a short time has managed to grow as powerful as what they have done – and where they get their finances from. The group apparently emerged from nowhere, and began attacking one city after another in quick succession. IS has now, after taking control of the city of Tadmur including Palmyra in Homs, conquered over 50 percent of Syria. They thus have control over the main part of Syria's gas and oil fields.

In October last year, Secretary of State David Cohen of the US Treasury Department, which is responsible for mapping terrorist financing, stated that "there is no doubt that IS is one of the best-funded terrorist organizations we have ever fought."

A seizure of 160 memorials in northern Iraq in June 2014 has shed some light on how IS works. At that time, they made big money on sales from oil fields in eastern Syria, which the organization had taken control of as early as 2012, as well as on the smuggling of all types of raw materials, including antiques, stolen from the Syrian government.

It seems that the organization is not dependent on external financing, but is based on income from oil sales, smuggling of archaeological finds, extortion, ransom, robbery or taxation of people in occupied territories. With the conquest of Mosul, the second largest city in Iraq, the group is said to have gained control of large assets. Settlement in occupied territories is subject to tax on up to 25 per cent of the income. Cash thefts from state-owned banks in the occupied territories are believed to have brought in the equivalent of 500 million US dollars in 2014 – but it is also estimated that IS has earned significant sums on oil extraction in the time since they took control of the areas.

Turkey has become known as a "Gateway to Jihad".

Oil sales are one of the main sources of income. According to a report by the US Treasury Department from October 2014, IS has earned about one million dollars a day on oil sales. At this time, IS controlled an area with the potential to produce more than 300 barrels of oil per day. According to the international analysis company IHS, which claimed that ISIL only produced 000 barrels, IS only sold oil for about two million dollars a day. In addition, IS also has a certain refinery capacity.

The oil produced in the oil fields controlled by IS is sold on the open market via intermediaries – several of whom are based in Turkey – and smuggled out. Also under Saddam Hussein, when Iraq was subject to UN sanctions, significant amounts of oil were smuggled out of this area. There are many indications that these are parts of the same smuggling networks that are now being used. The oil is traded on the black markets in Syria and Iraq.

Slaves. Art objects are shipped to Europe and sold. It is estimated that IS has earned $ 200 million a year on this activity. UNESCO has asked the UN Security Council to control the sale of antiques, as was done in the aftermath of the war in Iraq in 2003, and is working with Interpol and other agencies to prevent looted items from being sold. The problem is that this is an almost impossible task, since there is no proper legislation that stops illegal objects from being laundered and thus made legal. Such legislation is not desirable among today's ruling elites.

It is not only Syrians and Iraqis who are now losing their cultural heritage. The rest of the world has also suffered an invaluable loss. Not only do we allow our own cultural heritage to be destroyed, but also the legacy of future generations. According to Newsweek on 6 November 2014, the sale of cultural objects is the second largest source of IS 'funding. More than a third of Iraq's most important sites are under IS control. Various billions, manuscripts, and cuneiform writings worth hundreds of millions of dollars have been sold. Stolen items are smuggled into Turkey and Jordan.

Ransom for kidnapped is another source of income. The United States estimates the revenue from this business at over $ 20 million in 2014. Many believe that slavery was abolished in the 1800th century, but in the Arab-dominated world, slavery is not just commonplace – it is growing rapidly. In Iraq, women and children from Yezidis and Assyrians are taken as booty and sold in slave markets.

Indirect support. At the same time, a lot of attention is paid to the group's use of social networking sites to raise money. IS is known for its propaganda via social media – which includes online videos of massacres and beheadings of soldiers, civilians, journalists and aid workers, as well as the destruction of cultural heritage sites.

US support for rebel groups and terrorists in Syria seems to have been important. Among other things, the US government has been accused of indirectly supporting IS in the Syrian civil war by arming its allies and fighting their enemies. Countries such as the United States, Turkey and Saudi Arabia have trained several members of the Free Syrian Army (FSA), which will later join IS. The German magazine Der Spiegel reported in 2013 that the US military was training Syrian rebels in Jordan.

In an interview in March 2014, Saudi Arabia and Qatar were accused by Iraqi Shiite Prime Minister Nouri al-Maliki of supporting IS. Some news agencies, including NBC, BBC and The New York Times, have written about Saudis and private donors in Qatar who have donated to the group, as well as the support Saudi Arabia and Qatar have given to Muslim fundamentalists around the world – but at the same time claim that it there is no evidence of direct state support for IS from any of them.

Renowned journalist Robert Fisk wrote in his column in The Independent on June 12, 2014 that IS and other terrorist groups are funded by Saudis and oligarchs from Kuwait, while Aaron Klein at the World Net Daily (WND) on June 17 the same year claimed that members of IS had been trained by US instructors in a secret base in Jordan, and Saudi Arabia is one of the main forces behind the armament and financing of IS. As is well known, the "moderate" dictatorship in Saudi Arabia is second only to Israel, the United States' best ally in the Middle East.

Turkish gate? Turkey has been accused of supporting or collaborating with IS, especially by Syrian Kurds, but also by Western journalists such as Patrick Cockburn and David L. Phillips at Columbia University, who have compiled a list of accusations claiming that Turkey has helped IS with everything from military cooperation and weapons supplies to logistical support, financing and medical assistance. IS members have received treatment in Turkish and Israeli hospitals.

Several IS members and leaders, as well as Turkish police and officers, claim that Turkey supports IS. In the Washington Post on August 12, 2014, an IS commander stated that most of the members who joined in the beginning came via Turkey – which can also be said about equipment and supplies. At the same time, Turkey has been criticized for allowing individuals to join IS in Syria. IS members have passed through Turkey to fight in Syria, and the country has become known as a "Gateway to Jihad". This at the same time as Kurds who have traveled to support the Kurds' resistance have been stopped.

The Turkish opposition party The Republican People's Party (CHP) and several Turkish media have repeatedly accused the Turkish ruling Party of Justice and Development (AKP) of arming and funding IS – something the AKP has denied. The Kurdish online newspaper Kurdistan24 claimed in July 2014 that the AKP will assist IS with an area in Istanbul that can be used as a training camp. In addition, Sanliurfa in Turkey is located near Raqqa, which IS calls the capital of its caliphate. This has made the city a hub for IS leaders. They come to this Turkish city to rest, visit family and secure supplies.

There are many indications that IS is expanding due to great social hardship and destroyed local communities in the wake of neoliberal shock therapy.

Grows. The aforementioned FATF report from February this year refers to several sources of income. Information gathered from various sources and countries – such as Saudi Arabia, Turkey and the United States – demonstrates that IS's largest revenues come from the areas it occupies. However, the report also refers to other financing methods IS depends on to carry out its terrorist acts. This has led to various countries establishing stricter regulations to find and accuse terrorist financing activities in line with the recommendations of the FATF.

The report refers to new and ongoing measures, including how states can actively identify individuals and organizations that should be added to the UN Al Qaeda sanctions list, share information and intelligence that can stop the various financial channels leading to IS, stop IS's oil revenues and petroleum products, as well as uncover attempts to collect to IS through social media.

The fact is that the terrorist group – despite the fact that there are 50 countries in the US-led coalition that will fight them – has only grown, got better weapons and acquired better equipment. This indicates that new instruments are needed. At the same time, there are many indications that IS is in several ways functioning as part of the US plan to overthrow Assad – which was also the triggering factor for the conflict in 2011.

All indications are that IS is expanding due to great social distress and ruined communities in the wake of neoliberal shock therapy. This is not solved with weapons. Although it is necessary to protect the population, that is not what is happening now. Protection is best provided with a broad peacekeeping effort with a clear UN mandate. The region can no longer cope with colonization, repression, bombs and killings. We must put an end to the financing, arming and training of rebels – including IS.

Papazian is a regular contributor to Ny Tid.

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