Posts Tagged ‘Iraq’

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ISIS taxing each long-haul trucker $800

September 28, 2014

Taxes make up increasing share of ISIS’s wealth

Trucks passing through Islamic State of Iraq and Syria (ISIS) checkpoints on highways out of Iraq are being charged a tax of up to $800 per truck. Truckers are issued two tax stamps or receipts for their payments—one is shown at the next checkpoint as proof of payment, and the other is kept for the driver’s records. The taxes are in keeping with traditional Islamic tolls against merchants passing through the jurisdiction of an ‘ashir–a tax agent of an imam.

But ISIS hasn’t stopped there—they’re also collecting a tax on each bank withdrawal they authorize through ISIS-controlled banking committees in Mosul. If you’re an ordinary Mosul bank customer, you have to get permission from ISIS to withdraw your own money, and of course ISIS takes a cut along the way. ISIS probably justify their fees on the basis of reversing any “haram” interest that has accrued to depositors’ savings.

Thanks to Twitter user El Grillo for sending in both of the news items above.

The taxes suggest a deepening of ISIS’s territorial control, authority, expertise, and capacity to increase revenues domestically.  Forbes also reports that ISIS is taxing telecommunications networks and basic utilities.  Non-Muslims face the discriminatory jizya tax as well.

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Readers’ choice: news on ISIS’s cash

September 25, 2014

Thanks to readers and Twitter followers who have sent in links to several news developments over the last couple weeks about the Islamic State of Iraq and Syria’s (ISIS) finances:

  • An Islamic grade school principal in England was also an ISIS “banker” … more>>
    (tip of the hat to Giselle)
  • ISIS is smuggling oil into Turkey, and taking new recruits with them on their way back to the battlefront… more>>
    (hat tip to Sal)
  • Yes, ISIS is still making $3 million a day… more>>
    (h/t 1389)
  • Drag a hundred dollar bill through a Morocco trailer park to find your newest ISIS recruit… more>>
    (h/t GENUG)
  • The Rand Corporation argues that ISIS doesn’t receive foreign funding, and says it would be tough to cut off their funding… more>>
    (h/t Prof. Bloom)
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Hard dose of reality on funding moderates

September 12, 2014

During his Wednesday night speech, Pres. Obama called on Congress “to give us additional authorities and resources to train and equip these [Syrian opposition] fighters. In the fight against ISIL, we cannot rely on an Assad regime that terrorizes its own people — a regime that will never regain the legitimacy it has lost. Instead, we must strengthen the opposition as the best counterweight to extremists like ISIL.”

The hazards of funding Syrian fighters have been clear for years, and the resurgence of ISIS should eliminate any temptation to fall in love again with the myth that we can identify “safe” partners in Syria and ensure that the money and arms we give them stay exclusively within their hands.

An extremely important piece of analysis on this subject by Dr. Marc Lynch was published by the Washington Post last month. Lynch comes to it from a different perspective of questioning the likelihood of effectiveness, noting that, “external support for rebels almost always make wars longer, bloodier and harder to resolve.” Read it all:

Would arming Syria’s rebels have stopped the Islamic State?

Former secretary of state Hillary Rodham Clinton made news this weekend by suggesting that the rise of the Islamic State might have been prevented had the Obama administration moved to more aggressively arm Syrian rebels in 2012. Variants of this narrative have been repeated so often by so many different people in so many venues that it’s easy to forget how implausible this policy option really was.

It’s easy to understand why desperate Syrians facing the brutal regime of Bashar al-Assad hoped for Western support, especially by early 2012 as the conflict shifted inexorably from a civic uprising into an insurgency. It is less obvious that U.S. arms for the rebels would have actually helped them. Arming the rebels (including President Obama’s recent $500 million plan) was, from the start, a classic bureaucratic “Option C,” driven by a desire to be seen as doing something while understanding that there was no American appetite at all for more direct intervention. It also offered a way to get a first foot on the slippery slope; a wedge for demanding escalation of commitments down the road after it had failed.

There’s no way to know for sure what would have happened had the United States offered more support to Syrian rebels in the summer of 2012, of course. But there are pretty strong reasons for doubting that it would have been decisive. Even Sen. John McCain was pretty clear about this at the time, arguing that arming the rebels “alone will not be decisive” and that providing weapons in the absence of safe areas protected by U.S. airpower “may even just prolong [the conflict].” Clinton, despite the hyperventilating headlines, only suggested that providing such arms might have offered “some better insight into what was going on on the ground” and “helped in standing up a credible political opposition.” Thoughtful supporters of the policy proposed “managing the militarization” of the conflict and using a stronger Free Syrian Army as leverage to bring Assad to the bargaining table.

Would the United States providing more arms to the FSA have accomplished these goals? The academic literature is not encouraging. In general, external support for rebels almost always make wars longer, bloodier and harder to resolve (for more on this, see the proceedings of this Project on Middle East Political Science symposium in the free PDF download). Worse, as the University of Maryland’s David Cunningham has shown, Syria had most of the characteristics of the type of civil war in which external support for rebels is least effective. The University of Colorado’s Aysegul Aydin and Binghamton University’s Patrick Regan have suggested that external support for a rebel group could help when all the external powers backing a rebel group are on the same page and effectively cooperate in directing resources to a common end. Unfortunately, Syria was never that type of civil war.

Syria’s combination of a weak, fragmented collage of rebel organizations with a divided, competitive array of external sponsors was therefore the worst profile possible for effective external support. Clinton understands this. She effectively pinpoints the real problem when she notes that the rebels “were often armed in an indiscriminate way by other forces and we had no skin in the game that really enabled us to prevent this indiscriminate arming.” An effective strategy of arming the Syrian rebels would never have been easy, but to have any chance at all it would have required a unified approach by the rebels’ external backers, and a unified rebel organization to receive the aid. That would have meant staunching financial flows from its Gulf partners, or at least directing them in a coordinated fashion. Otherwise, U.S. aid to the FSA would be just another bucket of water in an ocean of cash and guns pouring into the conflict.

But such coordination was easier said than done. The Qatari-Saudi rivalry was playing out across the region, not only in Syria. Their intense struggles over the Muslim Brotherhood, Egypt and the overall course of the Arab uprisings were peaking during the 2012–13 window during which arming the rebels was being discussed. Their competition largely precluded any unified Gulf strategy. Turkey and Qatar channeled money and support to a variety of Islamist groups. Meanwhile, U.S.-Saudi relations were also at their nadir, before fears of jihadist blowback began to concentrate Saudi minds. Riyadh showed no more interest in following the United States’ lead in Syria than it did on Egypt or Iranian nuclear talks. External backers of the rebels didn’t even agree on whether the goal was to protect civilians, overthrow Assad, bring the regime to the table, or to wage a region-wide sectarian war against Iran. It is difficult to see Gulf capitals embroiled in these regional battles becoming more receptive to American guidance just because the United States had some “skin in the game.”

Meanwhile, huge private donations from the Gulf flowed toward mostly Islamist-oriented groups. These were massive public mobilization campaigns, mostly led by popular and ambitious Islamist figures who framed support for Syria along religious and sectarian lines in increasingly extreme ways. (Incidentally, the magnitude of those campaigns reveals the absurdity of recent claims that Arabs had ignored Syria’s war compared to Gaza.) Kuwait became the key arena for collecting money, as other Gulf states more tightly controlled private donations for Syria, but Islamists from across the region and especially Saudi Arabia continued to play a prominent role in the campaigns. Fears of jihadist blowback have led Gulf states to crack down on these private efforts, including Kuwait’s recent stripping of the citizenship of Nabil al-Awadhy, one of the most prominent of these Syria campaigners. But at the time Clinton’s plan was under discussion, those campaigns were peaking, with massive public support built around Islamic and sectarian identity.

That intra-state competition and popular mobilization is the regional context within which U.S. efforts to arm the FSA would have unfolded. The FSA was always more fiction than reality, with a structure on paper masking the reality of highly localized and fragmented fighting groups on the ground. Charles Lister’s comprehensive recent survey of the current Syrian military battlefield should quickly dispense with the simpler versions of the conflict. Syria’s civil war has long been a dizzying array of local battles, with loose and rapidly shifting alliances driven more by self-interest and the desires of their external patrons than ideology. Even at the height of the conflict between the Islamic State and its more secular rivals, local affiliates fought side by side in other theaters of the war. No one should be surprised that, as Hassan Hassan reports, some U.S.-backed and vetted groups have aligned with the Islamic State.

The idea that these rebel groups could be vetted for moderation and entrusted with advanced weaponry made absolutely no sense given the realities of the conflict in Syria. These local groups frequently shifted sides and formed alliances of convenience as needed. As MIT’s Fotini Christia has documented in cases from Afghanistan to Bosnia, and the University of Virginia’s Jonah Shulhofer-Wohl has detailed in Syria, rebel groups that lack a legitimate and effective over-arching institutional structure almost always display these kinds of rapidly shifting alliances and “blue on blue” violence. A “moderate, vetted opposition” means little when alliances are this fluid and organizational structures so weak.

The murkiness of the “terrorist group” line in this context is apparent in these changing alliances and conflicts. For instance, the United States recently designated two key Kuwaiti Islamists as terror financiers, accusing them of channeling funds to Jubhat al-Nusra and the Islamic State. But both were better known as backers of Ahrar al-Sham, a large Salafist organization that then worked within the Saudi-backed Islamic Front. And as recently as June, when they were allegedly funding the Islamic State and al-Nusra, one of them was holding events with FSA commander Riad al-Assad. These complexities, so deeply familiar to everyone who studies the conflict, deeply undermine the assumptions underlying plans resting on identifying and supporting “moderate rebels.”

Many have argued that the United States might have changed all of this by offering more support for the FSA. But based upon his outstanding recent book “Networks of Rebellion,” the University of Chicago’s Paul Staniland urges caution. Initial organizational weaknesses have long-lasting implications. “Pumping material support” into them, he observes, “might buy some limited cooperation from factions that need help, but is unlikely to trigger deep organizational change. This means that foreign backing for undisciplined groups will not do much.” Syria’s famously fractured and ineffective opposition would not likely have been miraculously improved through a greater infusion of U.S. money or guns.

In short, then, discussion of U.S. support for Syria’s rebels overstates the extent to which such aid would matter given the diverse sources of support available. U.S. arms would have joined a crowded market and competed within an increasingly Islamist and sectarian environment…

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ISIS stealing everything but the kitchen sink

August 25, 2014

Ninevite officials allege that the Islamic State of Iraq and Syria have stolen utility infrastructure, furniture, city cars and lorries in a coordinated heist. It’s not so hard to believe; ISIS has stolen just about everything else, including oil wells, dams, and military equipment.

What’s interesting is that the looted municipal and residential property has been transported to Syria. One may have originally suspected that international sanctions against Syria would make it more difficult to re-sell the pilfered items in Syria than in the relatively open Iraqi economy. Apparently not.

Thanks to Brian for sending this in from Al-Shorfa on Aug. 14:

Ninawa tribes accuse ISIL of theft, smuggling

The Ninawa tribal council said Thursday (August 14th) the “Islamic State of Iraq and the Levant” (ISIL) has stolen public and private property from Iraqis and smuggled it to Syria.

“ISIL recently stole electric cords, light poles, electric appliances, office furniture, municipal vehicles and trucks from Mosul and transported them to Syria,” said Ninawa tribal council deputy head Ibrahim al-Hassan.

ISIL fighters also stole the contents of dozens of residential buildings and tourist complexes and sent them to Syria to be sold to smuggling gangs, he said.

The magnitude of the operations indicates they were part of a targeted plan, al-Hassan told Al-Shorfa.

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Why it was right to refuse James Foley’s ransom

August 22, 2014

ISIS demanded a $132 million ransom a week prior to their beheading of American journalist James Foley. The New York Times reports that the U.S. declined to pay.

Several commentators including David Rohde of Reuters and James Traub of Foreign Policy have taken the opportunity to question the so-called “U.S. and U.K.” policy against paying ransoms.

Actually, refusing to pay ransoms to terrorists isn’t just an idiosyncrasy of American and British policy; it is international law. UN Resolution 1904 forbids the payment of ransoms. Furthermore, an agreement by the G8 in 2013 pledged to refrain from paying ransoms.

The critics of the “U.S.” no-ransom policy omit this information either out of laziness or bias.  True, some European governments pay ransoms under the table, which is very damaging to international security, but that is in violation of international accords and their own publicly stated policies.

Transferring funds of any kind from the U.S. to ISIS would also constitute material support for a foreign terrorist organization under U.S. Code 2339B.

Not only is America prohibited from paying ransoms under international law, agreements, and domestic law, but it would also be foolish to pay ransoms to terrorist groups. Funding an enemy group that the U.S. Air Force is simultaneously carrying out missions against would be, to put it mildly, illogical. Paying ransoms to ISIS would also aid the enemy of Iraq–a nation that U.S. troops fought alongside with to protect from insurgent terrorism.

Moreover, paying ransoms only serves to increase the likelihood that Americans and other Westerners living or traveling in the Middle East will be kidnapped. Payments also drive up the price of the ransoms demanded.

Critics would have you believe that it’s time for “a debate” about paying ransoms. The debate came and went when Resolution 1904 passed the UN. The would-be ransom payers lost the debate back then.

In summary, abductions are tragic but they will be more commonplace if we started complying with ransom demands.

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Money and the Islamic State of Iraq and Syria

August 11, 2014

In 2007, the Islamic State of Iraq was seen as “the richest of the insurgency groups” in Iraq with $1 billion to 1.5 billion “collected in revenue by the group through foreign donations, enforced taxation and confiscation of the property and funds of Iraqis.” But the U.S. surge and ISI missteps significantly damaged the jihadist group’s ability to raise funds.

Seven years and three names later, ISIS amassed a $2 billion comeback and took control of large swathes of territory in northern Iraq including Mosul and 35 percent of Syria.

ISIS’s financial recovery has been marked by a slight shift away from reliance on local extortion networks (although those are still in effect), improved organizational and financial management by ISIS leader and self-proclaimed caliph Abu Bakr al-Baghdadi, and the departure of U.S. troops in 2011.

The most important elements of ISIS’s funding are sadaqa (voluntary donations) from Arab donors in the Gulf; sales and tolls collected on sales of oil from fields under its control; and increasingly through money made by controlling key infrastructure.

Here’s a rundown of ISIS’s main funding channels:

Sadaqa from private donors

Fundraising is aided by contemporary marketing methods

Oil

  • ISIS controls 60 percent of Syrian oil including the lucrative Omar field
  • In Iraq, ISIS controls Butmah and Ain Zalah oil fields, the refinery in Baiji, and oil and gas resources in Ajeel in northern Iraq
  • ISIS sells or collects a portion on black market sales to Turkey, Iran, and in Syria itself
  • Revenue estimates for ISIS range from $1 million to $3 million daily

Dams

  • In addition to oil, control of key infrastructure such as the dams in Mosul, Fallujah, and Tabqa present increasingly significant revenue potential for ISIS.
  • Professor Ariel Ahram notes this is already occurring at Tabqa, where ISIS is involved in selling electricity.
  • New York Times reporter Tim Arango says that possession of the Mosul dam can enable ISIS to “use it as a method of finance” through extortion schemes to continue their operations.

Other sources

  • Isis has seized arms from Iraqi depots, including U.S. weapons given to Iraqi forces, plus weapons smuggled from Turkey and Croatia
  • The collection of ransom money has sustained ISIS throughout its existence
  • Antiquities smuggling

Incidently, little is being done by the Gulf states to curtail the flow of donations to ISIS because they either want an independent Sunni state carved out of Iraq or to replace Iraq’s Shia-led government with Sunnis. Washington should designate Saudi Arabia and Qatar as state sponsors of terrorism, but it won’t because of diplomatic considerations.

Without interdicting the donations and the contraband oil, U.S. airstrikes will have limited effect on ISIS’s coffers.

This piece is also published at Terror Finance Blog.

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Ex-MI6 chief cites ISIS’s Saudi, Qatari donors

August 5, 2014

Iranian cartoon about Saudi funding of jihad

Richard Dearlove, the former head of the British spy agency MI6, made these comments last month about support for the Islamic State of Iraq by Saudi and Qatari donors:

They [Sunnis in the Middle East] are deeply attracted towards any militancy that can effectively challenge Shia-dom. How much Saudi and Qatari money – now I’m not suggesting direct government funding, but I am suggesting maybe a blind eye being turned – is being channeled towards ISIS, and reaching it? For ISIS to be able to surge into the Sunni areas of Iraq in the way that it’s done recently has to be the consequence of substantial and sustained funding. Such things simply do not happen spontaneously.

Indeed. As Money Jihad has previously observed, ISIS didn’t wake up one day and luck their way into seizing Mosul.  Video clips of Mr. Dearlove’s remarks are available on the Media Research Center’s website here.

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