Petrodollars grabbed by the “Islamic State” have played a key role in helping the extremist organization grab territories.
Since its rise, IS has taken possession of many oilfields in Syria and Iraq. In the areas it controls, IS has monopolized the production of petroleum to become the sole purveyor in the region. Oil resources have become a major strategic weapon in its hands, making it “the most wealthy and powerful terrorist organization.” Therefore, a financial anti-terrorist war is needed. It may not be bloody but it is no less fierce and arduous.
Between August 2014 and October 2015, international allied forces led by the United States carried out more than 10,000 air raids on IS targets but only 196 of them were targeted at the terrorist group’s petroleum facilities. Since November, the US and Russia intensified bombings of its oil installations and tank trucks to cut its oil income.
Recently, the US-led joint force launched the Tide II action to carry out precision bombing of IS’s major energy assets, including oilfields, refineries and tank trucks. An air raid at the end of last month killed Abu Saleh, “finance minister” of IS, who was also the highest-ranking official of the organization’s financial website management. He was the third IS “financial guru” to have been killed in recent months. Their killing dealt a heavy blow to IS’s ability to raise money and manage finance.
In a military action in eastern Syria in May, US special forces killed Abu Saif, known as IS’s “Petro-Emir”, and seized a host of documents showing IS’s oil transactions. The documents demonstrated IS’s fine management of the oil resources with detailed accounts of each oil well’s income and production costs. IS sets different prices for oils sold to different regions based on the quantity they demand in order to reap the largest possible profit. Its secret police monitors the operation of all oil wells to prevent stealing and misappropriation of the income.
The US Treasury estimated that IS earns a profit of $500 million annually by smuggling petroleum. Some foreign media also reported that IS makes a daily $1.5 million from selling oil. It has to be noted that all those deals had to be done within the international financial system.
A study by Philippe Le Corre, a French Foreign Ministry staffer in the Brookings Institution’s American and European Affairs Research Center, indicates that IS currently has total assets of $2 trillion backed by an annual income of $2.9 billion. The figures far exceed the criteria for the definition of a terrorist organization. The fact may suggest that IS is trying to enter mainstream economic fields through banking systems or industrial sectors such as energy resources and bulk commodities. In this sense, the potential danger and destructive force of IS may have far exceeded the previous estimation.
World Bank Chief Financial Officer Bertrand Badre said IS gets its money from eight sources, namely illegal production of petroleum and natural gas, plundering of financial institutions, money laundering, hostage ransoms, wanton taxes, smuggling of cultural relics and antiques, farm products and “foreign aid”. Among these criminal acts, illegal excavation and trade of petroleum and natural gas, plundering of financial institutions and money laundering have seriously interfered with the world’s energy and financial systems and may even disrupt all nations’ basic state elements. Therefore, an effective cooperation among all nations to throttle terrorists’ means of fund-raising is urgently needed in the global war against terrorism.
Tracing the origin of their funds is the basis for finding effective methods to cut off the terrorist groups’ source of income as well as a basic means for cracking down on terror activities, organized crimes and cross-border crimes. On Nov. 18, Russian President Vladimir Putin announced the establishment of a special committee for investigating terrorists’ financing. On Nov. 20, the UN Security Council passed a resolution urging an all-round implementation of the its previous anti-terrorist resolutions and calling on all nations to take joint moves to cut off terrorists’ channels for financing and cross-border flow of money.
Recently the US government set up a special working group to coordinate actions of international intelligence agencies, financial administrations and police forces to trace terrorist groups’ online financing sources and cut off their ways of raising and transferring money.
All the above-mentioned moves indicate that the need for a worldwide financial warfare against terrorism has reached the “critical point” and an IS-targeted “financial anti-terrorist war” is formally launched.
To win this war, the following moves should be taken:
First, intensified strikes should be launched to destroy IS’s infrastructure and oil production and supply facilities so as to annihilate its source of income.
Second, the world financial system should develop a strong scrutinizing ability to quickly and precisely locate terrorists’ financing channels. There should be an efficient risk-identifying mechanism to find terrorists’ traces of raising funds and laundering money. For instance, individuals, companies and countries which have oil deals with IS should be examined.
Third, new methods should be created for financial monitoring. Different from al-Qaeda, IS uses more covert and more destructive methods to invade international financial systems. This forces them to innovate more effective means to monitor money flow.
Fourth, the international community should realize that terrorism is the common enemy of the whole human race and thus should take coordinated moves to resolutely fight terrorism. There should be no double standards in identifying terrorists.
Meanwhile, major political forces in the Middle East should strive for a political solution of the Syrian issue and help countries in the region achieve stability, democracy and economic development. Only by improving the region’s political ecology can there be no soil for the growth of IS and only by accomplish this can there be lasting peace in the world.