Intel: US squeezes Islamic State’s cash flow with new sanctions

al-monitor An Iraqi fighter with the Popular Mobilization Units inspects the site of an Islamic State attack a day earlier on a unit of the paramilitary force in Mukaishefah, about 180 kilometers (110 miles) north of the capital, Baghdad, on May 3, 2020. Photo by Photo by AHMAD AL-RUBAYE/AFP via Getty Images.

Topics covered

deir ez-zor, treasury, afghanistan, syrian conflict, islamic state, terrorism financing, mike pompeo

Jul 15, 2020

The United States and six other countries imposed fresh sanctions today on half a dozen targets accused of helping fund the operations of the Islamic State (IS or ISIS), including by funneling hundreds of thousands of dollars to the group’s leaders in Iraq and Syria. 

The economic pressure helps “bring the US and our partners one step closer to disrupting terrorist financing networks around the world,” US Secretary of State Mike Pompeo said. “The actions taken today serve as a further warning to individuals and businesses who provide financial support or material assistance to terrorist organizations."

The designations were announced by the seven-nation Terrorist Financing Targeting Center, which consists of the United States, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and has targeted a range of terrorist activity since its inception in 2017. 

Included in the sanctions are three Syrian money-services businesses the US Treasury Department said “played a vital role in transferring funds to support Syria-based ISIS fighters and have provided hundreds of thousands of dollars of liquidity to ISIS leadership.”

Senior IS member Abd-al-Rahman Ali Husayn al-Ahmad al-Rawi was sanctioned by the United States and its partners for his apparent role overseeing the group’s money transfers into and out of Syria. Also named was an Afghanistan-based charity and its director, whom the US government accused of conducting transfers to Islamic State Khorasan, the terrorist group’s Afghan faction, “under the auspices of charitable giving.”  

Why it matters: The sanctions are the latest effort at squeezing the financial lifelines for what once was the best-funded terrorist group in history. IS was at its peak raking in hundreds of millions of dollars per year in black market oil sales, and pulling in additional funds from looting banks, kidnapping for ransom and extortion.  

Since the defeat of its so-called caliphate more than a year ago, the group is no longer in a position to levy taxes on the local population or generate revenue from the oil fields it once controlled. Still, experts say IS has held on to large sums of money, which it uses to finance ongoing insurgent activities. 

What’s next: The new round of penalties comes as IS continues to wage what the Pentagon describes as a “low-level insurgency” in Syria and Iraq since the fall of Baghouz, its last stronghold, in March 2019. 

Hiding out in the mountainous and desert areas of Iraq, remnants of the group have staged a number of recent assassinations and ambushes on locals and Iraqi security forces. IS militants have also returned to insurgent tactics in neighboring Syria, particularly in the country’s eastern eastern provinces of Deir ez-Zor, Hasakah and Raqqa.

Know more: Elizabeth Hagedorn has the story on the man the US government believes is the current leader of IS, Amir Muhammad Sa’id Abdal-Rahman al-Mawla. Jared Szuba reports on what lies ahead for US troops stationed in Iraq.

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