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How The Islamic State Makes Its Money

Caption:A section of an oil refinery is guarded as it is brought on a lorry to the Kawergosk Refinery, some 20 kilometres east of Arbil, the capital of the autonomous Kurdish region of northern Iraq, on July 14, 2014. The International Energy Agency (IEA) said on July 11, that an offensive by jihadists in northern Iraq had cut output by 260,000 barrels a day in June to 3.17 million, after fighting forced the closure of the country's biggest refinery and slashed production from the giant Kirkuk field. (Photo credit should read SAFIN HAMED/AFP/Getty Images)
A section of an oil refinery is guarded as it is brought on a lorry to the Kawergosk Refinery, some 20 kilometres east of Arbil

Causing terror around the world is quite expensive. All of these weapons,  employee salaries, international travel, propaganda videos, clothing—all of these cost money. David Coen, the Treasury Department’s Undersecretary for Terrorism and Financial Intelligence, described the Islamic State last October as “probably the best-funded terrorist organization we have confronted” — deep pockets that have allowed the group to carry out deadly attacks in Iraq, Syria and other countries.

So, how exactly does the Islamic State get its money?

The Islamic State’s methods for financing deviates from other leading terrorist organizations. Thus, making it difficult for the U.S. and other countries to shut down. For the most part, many terrorist groups finance themselves through wealthy donors. In contrary, the Islamic State has its control over a territory that is approximately the size of the United Kingdom and home to millions of people to develop diversified revenue channels that make it more resilient to U.S. offensives.

But truly, it is all about oil and extortion. The group controls oil fields and refineries across Iraq and Syria. Fighters either smuggled crude oil across the border for cash and other goods, or refine it themselves to use or sell.  Furthermore, the territories it occupies, Islamic State loots government owned bank by taking assets outright. For the people who live in these occupied territories, they are taxed on everything—from access to their own bank accounts to the crops they harvest. The terror groups also steal money from employees that are still paid by the Iraqi government. They also raid cultural sites to self artifacts on the black market. Then, there’s kidnapping….

Image made from a militant video posted on YouTube on April 3, a militant hammers away at a face on a wall in Hatra, a large fortified city recognized as a UNESCO World Heritage site.

The Islamic State has made between $20-45 million dollars from ransom payments.

American officials are keeping a close eye on any money coming from private donors and non-profits . Usually, U.S. efforts to cut off funding for terrorists focus on tracking and stopping the flow of funds through the international system. Since 9/11, U.S. other countries, and international organizations such as the International Monetary Fund and the United Nations have set up initiatives to detect and stop the flow of funds to terrorists. Leaders of the Group of 20 issued a statement on Sunday calling for better coordination to cut off funding channels to terrorist organizations, including exchanging information and freezing terrorist assets. The coalitions fighting against the Islamic State suggests air strikes against oil facilities as well as declining oil prices, which in result are hurting the Islamic State’s revenue stream. 

President Obama warns us that the fight is far from over. “This a difficult mission, and it will remain difficult for some time.”

It is surprising to learn that terrorist organizations like the Islamic State has complex financial methods to carry out its deadly functions, with our globalized world it is far more easier for terrorist groups to carry out these deadly attacks. The power of technology and the flow of information is truly terrifying during these times of uncertainty. I believe this is a topic that is very well connected to Global Corporate Citizenship because it is important to be aware that even the most evil of organizations like the Islamic State, are composed of complex finance methods that many people, including myself, were  unaware of. As global citizens, each of us have the obligation to be aware and be well informed about current events through trusted resources so that our minds would avoid generalization of peoples and not be manipulated by popular media.

Works Cited :

(Photo credit should read SAFIN HAMED/AFP/Getty Images)


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