Clearer focus needed in the battle to disrupt ISIS funding

JONATHAN WATSON

Near the end of 2015, the UN Security Council unanimously adopted a resolution designed to disrupt the ability of ISIS to fund itself. The move puts the organisation, also known as ISIL or Daesh, on the same level as terror network al-Qaida.

The resolution states that ‘any individual, group, undertaking, or entity supporting ISIL or al-Qaida’ will be subject to UN sanctions, including an asset freeze, travel ban and arms embargo. It also encourages the 193 UN Member States ‘to more actively submit’ names for inclusion on the sanctions list and expresses ‘increasing concern’ at the failure of some countries to implement previous sanctions resolutions. It is drafted under Chapter VII of the UN Charter, which can be militarily enforced.

However, despite its intention to tackle the financing of ISIS, the resolution is quite limited in that it focuses on sanctions and placing individuals or organisations dealing with ISIS on the sanctions committee list, says Javaid Rehman, a professor specialising in Islamic Law at Brunel University in London who was a member of the IBA’s Task Force on Terrorism. ‘The difficulty is that those engaged with ISIS do not conduct business in the official markets – ISIS is largely involved in smuggled and illegal trade,’ he says.

According to Rehman, there needs to be much tighter control of border areas where ISIS is able to sell oil and other goods. ‘Neighbouring states need to ensure that all forms of trade and illegal smuggling are prevented,’ he says. ‘I suspect there are local vested interests which allow such illegal trade, regardless of UN resolutions.’

Some of the regional powers opposed to Syria’s President Assad have indirectly continued to assist rebel forces, including ISIS, adds Rehman. ‘Even for western countries, including the UK and the US, the situation has its challenges. It must be determined and agreed by all states that the elimination of ISIS is a first priority, and not the removal of the Assad regime.’

Matthew Levitt, the Fromer-Wexler fellow and director of The Washington Institute’s Stein Program on Counterterrorism and Intelligence, explains that ISIS financing revenue comes primarily from the sale of illicit oil, kidnappings for ransom, and a wide array of criminal enterprises such as extortion, looting antiquities and stealing livestock.‘There have been some notable cases of deep pocket donors from the [Persian] Gulf, but these have been more the exception than the norm,’ he says.

Jimmy Gurulé, professor of law at the University of Notre Dame and a former US Treasury Department official specialising in terrorist financing, feels that December’s UN resolution tries to address too many of these issues at once. ‘It says the international community should be doing everything it possibly can to deal with every source of funding for ISIS. It lacks focus,’ he argues.

Gurulé believes a greater sense of urgency and a clearer understanding of priorities is needed before funding can be effectively disrupted. ‘The top priority should be cutting off funding from the sale of oil for ISIS,’ he explains. ‘We know they are doing it and we can even see the trucks being used to transport the oil across the border between Syria and Turkey.’

Even if the international community did nothing other than put a substantial dent in ISIS’s ability to sell oil, that would significantly undermine the group’s ability to finance its military operations in Iraq, Syria, Lebanon, Libya, Yemen and elsewhere. ‘The foreign companies purchasing the oil, as well as those helping ISIS refine, produce and distribute it, should be a key target for sanctions,’ says Gurulé.

Estimates suggest the sale of illicit oil is generating $1m a day for the organisation. ‘How is that money being transferred?’ asks Gurulé. ‘It can’t all be in a cardboard box in the back of a truck. That money has to be entering the financial services system at some point. How is that happening? What are banks doing to ensure that account holders – the people they are doing business with – are not directly or indirectly affiliated with ISIS?’

Tighter financial controls could also hinder ISIS’s ability to operate beyond the territory it currently occupies. French finance minister Michel Sapin, for example, has suggested that regulations should be introduced that stop anonymous transactions, arguing this would help prevent more attacks like those carried out in Paris last November. ‘It is likely that such measures will be undertaken,’ says Rehman. ‘Unfortunately, they will come at a cost; there is a danger of undermining good, convenient business ethics, as well as human rights and civil liberties.’

ISIS may be well-funded, but it is very expensive to run. That’s according to James Henry, a senior fellow at the Columbia Center on Sustainable Investment and member of the New York Bar who has been working with Professor Thomas Pogge, chair of the IBA Task Force on Illicit Financial Flows, Poverty and Human Rights. ‘It does not really cost much to be an al-Qaida type operation,’ he says. ‘The expensive part is replenishing these military facilities. ISIS seems to have a whole lot of captured weaponry, and it is somehow resupplying itself.’

Henry believes that disrupting ISIS communications is also an essential part of preventing the group from functioning effectively. ‘These people are all over Twitter,’ he says. ‘They do get bumped off the system periodically, but they resurface almost immediately with slightly different usernames. The social media site is a very sophisticated source of information and means of communication for them. We should think more about monitoring this, and not just about bank accounts.’

Disrupting satellite internet connections is another measure that could be taken. ‘ISIS members get internet access via satellite in places like Mosul in northern Iraq,’ says Henry. ‘Companies involved in this include western firms, so why haven’t we cut them off?’