Since 2012, the
Islamic State
An Islamic state is a State (polity), state that has a form of government based on sharia, Islamic law (sharia). As a term, it has been used to describe various historical Polity, polities and theories of governance in the Islamic world. As a t ...
(IS) has produced annual reports giving numerical information on its operations, somewhat in the style of corporate reports, seemingly in a bid to encourage potential donors.
In 2014, the
RAND Corporation
The RAND Corporation (from the phrase "research and development") is an American nonprofit global policy think tank created in 1948 by Douglas Aircraft Company to offer research and analysis to the United States Armed Forces. It is financed ...
analyzed ISIL's funding sources by studying Bharatpur documents — personal letters, expense reports and membership rosters — captured from the
Islamic State of Iraq
The Islamic State of Iraq (ISI; ar, دولة العراق الإسلامية '), commonly referred to as al-Qaeda in Iraq ( ar, القاعدة في العراق '), is a militant Salafist jihadist group that aimed to establish an Islamic sta ...
(which included al-Qaeda in Iraq) by
US forces in Iraq between 2005 and 2010.
It found that over this period, outside donations amounted to only 5% of the group's operating budgets, with the rest being raised within Iraq.
In the time period studied, cells were required to send up to 20% of the income generated from kidnapping, extortion rackets and other activities to the next level of the group's leadership. Higher-ranking commanders would then redistribute the funds to provincial or local cells which were in difficulties or which needed money to conduct attacks.
The records show that the Islamic State of Iraq depended on members from
Mosul
Mosul ( ar, الموصل, al-Mawṣil, ku, مووسڵ, translit=Mûsil, Turkish: ''Musul'', syr, ܡܘܨܠ, Māwṣil) is a major city in northern Iraq, serving as the capital of Nineveh Governorate. The city is considered the second large ...
for cash, which the leadership used to provide additional funds to struggling militants in
Diyala,
Salahuddin and
Baghdad
Baghdad (; ar, بَغْدَاد , ) is the capital of Iraq and the second-largest city in the Arab world after Cairo. It is located on the Tigris near the ruins of the ancient city of Babylon and the Sassanid Persian capital of Ctesiphon ...
.
In mid-2014, the
Iraqi National Intelligence Service
The Iraqi National Intelligence Service (INIS) is an intelligence agency of the Iraqi government that was created in April 2004 on the transitional authority of the Coalition Provisional Authority, following the American invasion of Iraq a year ...
obtained information from an ISIL operative which revealed that the organisation had assets worth US$2 billion,
making it the richest jihadist group in the world. About three-quarters of this sum is said to be represented by assets seized after the group
captured Mosul in June 2014; this includes possibly up to US$429 million looted from Mosul's central bank, along with additional millions and a large quantity of
gold bullion
A gold bar, also called gold bullion or gold ingot, is a quantity of refined metallic gold of any shape that is made by a bar producer meeting standard conditions of manufacture, labeling, and record keeping. Larger gold bars that are produced ...
stolen from a number of other banks in Mosul.
However, doubt was later cast on whether ISIL was able to retrieve anywhere near that sum from the central bank, and even on whether the bank robberies had actually occurred.
[ Accessible via Google.]
According to a 2015 study by the
Financial Action Task Force
The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, ''Groupe d'action financière'' (GAFI), is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat m ...
, ISIL's five primary sources of revenue are as follows (listed in order of significance):
* proceeds from the occupation of territory (including control of banks, oil and gas reservoirs, taxation (including
zakat
Zakat ( ar, زكاة; , "that which purifies", also Zakat al-mal , "zakat on wealth", or Zakah) is a form of almsgiving, often collected by the Muslim Ummah. It is considered in Islam as a religious obligation, and by Quranic ranking, is ne ...
), extortion, and theft of economic assets)
* taxation of the non muslim population (
jizya
Jizya ( ar, جِزْيَة / ) is a per capita yearly taxation historically levied in the form of financial charge on dhimmis, that is, permanent Kafir, non-Muslim subjects of a state governed by Sharia, Islamic law. The jizya tax has been unde ...
)
* kidnapping for ransom
* donations by or through non-profit organizations
* material support provided by foreign fighters
* fundraising through modern communication networks
Another 2015 analysis also contends that ISIL's financial strength is in a large part due to "fanatical spending discipline".
The United States Department of State’s
Rewards for Justice The Rewards for Justice Program (RFJ) is the counterterrorism and counterintelligence platform administered by the U.S. Department of State's Diplomatic Security Service agency. The Rewards For Justice program is seeking information leading to the ...
offers US$5 million for information leading to the disruption of the sale and/or trade of oil and antiquities by ISIS.
Oil revenues
![SyrianOilRefineryStrikesRADM Gbiebe Modular Oil Refinery (Sep](https://upload.wikimedia.org/wikipedia/commons/3/31/SyrianOilRefineryStrikesRADM_Gbiebe_Modular_Oil_Refinery_%28Sep._2014%29.jpg)
Exporting oil extracted from captured oilfields has brought in tens of millions of dollars for the Islamic State.
A
US Treasury
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and th ...
official estimated in 2014 that ISIL earned US$1 million a day from the export of oil, much of which was sold illegally in Turkey.
The same year, Dubai-based energy analysts put the combined oil revenue from ISIL's Iraqi-Syrian production as high as US$3 million per day. An accurate estimate of the Islamic State's true revenue from oil is difficult, as black market sales are difficult to trace.
In 2014, the majority of the group's funding came from the production and sale of energy; it controlled around 300 oil wells in Iraq alone. At its peak, it operated 350 oil wells in Iraq, but lost 45 to foreign airstrikes. It had captured 60% of Syria's total production capacity (about one fifth of its total capacity had been in operation). Despite controlling large amounts of oil reserves and production facilities, ISIL lacked the "resources and technical capacities" to effectively utilize them. ISIL earned US$2.5 million a day by selling 50,000–60,000 barrels of oil daily.
[ Foreign sales relied on a long-standing black market to export via Turkey. Many of the smugglers and corrupt Turkish border guards who helped ]Saddam Hussein
Saddam Hussein ( ; ar, صدام حسين, Ṣaddām Ḥusayn; 28 April 1937 – 30 December 2006) was an Iraqi politician who served as the fifth president of Iraq from 16 July 1979 until 9 April 2003. A leading member of the revolution ...
to evade sanctions also helped ISIL to export oil and import cash.
In 2015, after the fall of Tikrit, ISIL lost control of three large oil fields. Air strikes by the US-led coalition fighting ISIL and in the wake of the terror attacks in Paris, destroyed hundreds of trucks the Islamic State had been using to transport its oil. A study by the Center for Development and Strategy
The Center for Development and Strategy (CDS) is an environmental and economic American think tank and online publisher based in Buffalo, New York, in the United States. The center develops policy studies, risk briefs, and OpEds on political, econ ...
showed this was the preferred method of reducing ISIL's revenue, while minimizing total impact.
Other energy sales include selling electric power from captured power plants in northern Syria; some of this electricity was sold back to the Syrian government.
Sale of antiques and artifacts
Sales of artifacts may be the second largest source of funding for ISIL.[ More than a third of Iraq's important sites are under ISIL's control. It looted the 9th century BC grand palace of the Assyrian king ]Ashurnasirpal II
Ashur-nasir-pal II (transliteration: ''Aššur-nāṣir-apli'', meaning " Ashur is guardian of the heir") was king of Assyria from 883 to 859 BC.
Ashurnasirpal II succeeded his father, Tukulti-Ninurta II, in 883 BC. During his reign he embarked ...
at Kalhu (Nimrud
Nimrud (; syr, ܢܢܡܪܕ ar, النمرود) is an ancient Assyrian city located in Iraq, south of the city of Mosul, and south of the village of Selamiyah ( ar, السلامية), in the Nineveh Plains in Upper Mesopotamia. It was a majo ...
). Tablets, manuscripts and cuneiforms were sold, worth hundreds of millions of dollars. Stolen artifacts are smuggled into Turkey and Jordan. Abdulamir al-Hamdani, an archaeologist from Stony Brook University
Stony Brook University (SBU), officially the State University of New York at Stony Brook, is a public research university in Stony Brook, New York. Along with the University at Buffalo, it is one of the State University of New York system's ...
, has said that ISIL is "looting... the very roots of humanity, artefacts from the oldest civilizations in the world".[ It is difficult to accurately measure the revenue from artifacts, as they are primarily sold on the black market, but ''National Geographic'' estimates it may be in the tens of millions USD. As well as selling artifacts themselves, ISIL taxes traffickers smuggling them across ISIL's territory.
]
Taxation and extortion
ISIL extracts wealth through taxation and extortion.[ Regarding taxation, Christians and foreigners are at times required to pay a tax known as ]jizya
Jizya ( ar, جِزْيَة / ) is a per capita yearly taxation historically levied in the form of financial charge on dhimmis, that is, permanent Kafir, non-Muslim subjects of a state governed by Sharia, Islamic law. The jizya tax has been unde ...
. The rate of jizya is determined by the income of the person, and it also serves as a protection contract involving harsh restrictions on non-Muslims. This tax has a historical foundation in the Quran and the original caliphate as a way to bring non-Muslims under the control of the spreading Empire.
The Islamic State has issued several taxes in an effort to control the assets acquired by its fighters in battle. According to the Quran, one-fifth of the ''ghanima'', or the spoils of war taken by Islamic State's fighters, must be given to the state, and IS is believed to be collecting this tax, known as ''khums
In Islam, khums ( ar, خُمْس , literally 'one fifth') refers to the required religious obligation of any Muslims to pay 20% of their acquired wealth from certain sources toward specified causes. It is treated differently in Shia and Sun ...
'', in Mosul. All fighters for Islamic State also pay tax on property taken as spoils of war. As well as these spoils of war, property taken peacefully, known as ''fay, is subject to a 20 percent tax. These taxes serve the dual purpose of bringing in revenue for the state while maintaining strict control over its fighters.
While frowned upon, professions other than fighting jihad are necessary for the running of the state. Those who take up these professions must pay ''zakat
Zakat ( ar, زكاة; , "that which purifies", also Zakat al-mal , "zakat on wealth", or Zakah) is a form of almsgiving, often collected by the Muslim Ummah. It is considered in Islam as a religious obligation, and by Quranic ranking, is ne ...
'', usually a 2.5% tax on an individual's total assets. Islamic State has also put in place the ushr'' tariff on imports and exports from their territory. All of these taxes imposed by Islamic State have some form of Quranic or historical basis except for the fay', giving the administration freedom of interpretation that could explain its higher rate.
In addition, the group routinely practices extortion
Extortion is the practice of obtaining benefit through coercion. In most jurisdictions it is likely to constitute a criminal offence; the bulk of this article deals with such cases. Robbery is the simplest and most common form of extortion, ...
, by demanding money from truck drivers and threatening to blow up businesses, for example. Robbing banks and gold shops has been another source of income. The Iraq government indirectly finances ISIL, as it continues to pay the salaries of the thousands of government employees who continue to work in areas controlled by ISIL, which then confiscates as much as half of those Iraqi government employees' pay. Policemen, teachers, and soldiers who had worked for religiously inappropriate regimes are reportedly allowed to continue work if they pay for a repentance ID card that has to be annually renewed.[
]
Illegal drug trade
According to Victor Ivanov
Viktor Petrovich Ivanov (russian: Виктор Петрович Иванов, born May 12, 1950) is a Russian politician and businessman, former KGB officer, who served in the KGB Directorate of Leningrad and its successors in 1977–1994. He w ...
, head of the Russian anti-drug agency, Islamic State, like Boko Haram
Boko Haram, officially known as ''Jamā'at Ahl as-Sunnah lid-Da'wah wa'l-Jihād'' ( ar, جماعة أهل السنة للدعوة والجهاد, lit=Group of the People of Sunnah for Dawah and Jihad), is an Islamic terrorist organization ...
, makes money through trafficking Afghan heroin
Heroin, also known as diacetylmorphine and diamorphine among other names, is a potent opioid mainly used as a recreational drug for its euphoric effects. Medical grade diamorphine is used as a pure hydrochloride salt. Various white and brow ...
through its territory. The annual value of this business may be up to $1 billion. Political scientist Colin P. Clarke of the RAND Corporation
The RAND Corporation (from the phrase "research and development") is an American nonprofit global policy think tank created in 1948 by Douglas Aircraft Company to offer research and analysis to the United States Armed Forces. It is financed ...
, writing after the end of the 2016–2017 Battle of Mosul in July 2017, stated that with ISIL's territorial losses causing declines in the organization's revenue from taxation of the local populations it once controlled, as well as from extortion from oil, gas, phosphate, and cement production, that the group would likely seek new revenue streams from drug trafficking.
Agriculture
The acreage between Tigris and Euphrates has produced half of Syria's annual wheat crop and a third of Iraq's. It is able to produce crops worth possibly US$200 million per year if properly managed, and the UN Food and Agricultural Organization believes that 40% of Iraq's wheat-producing land is under ISIL control.["Financing of the Terrorist Organisation Islamic State in Iraq and the Levant (ISIL)," 15.][ It is believed that ISIL confiscates wheat and barley crops as ]zakat
Zakat ( ar, زكاة; , "that which purifies", also Zakat al-mal , "zakat on wealth", or Zakah) is a form of almsgiving, often collected by the Muslim Ummah. It is considered in Islam as a religious obligation, and by Quranic ranking, is ne ...
, as well as farming equipment that is then rented back to farmers. The organization maintains strict control over the production and distribution of crops, effectively setting prices.
Donations from Arab States of the Persian Gulf
The State of Qatar has long been accused of acting as a conduit for the flow of funds to the Islamic State of Iraq and the Levant. While there is no proof that the Qatari government is behind the movement of funds from the gas-rich nation to ISIL, it has been criticized for not doing enough to stem the flow of financing. Private donors within Qatar, sympathetic to the aims of radical groups such as al-Nusra Front
Al-Nusra Front or Jabhat al-Nusra ( ar, جبهة النصرة لأهل الشام, Jabhat an-Nuṣrah li-Ahl ish-Sham lit. ''Front of the Supporters of the People of Syria/the Levant''), known as Jabhat Fatah al-Sham ( ar, جبهة فتح ال ...
and ISIL, are believed to be channelling their resources to support these organisations. According to the U.S. Treasury Department
The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and th ...
, a number of terrorist financiers have been operating in Qatar. Qatari citizen Abd al Rahman al Nuaymi has served as an interlocutor between Qatari donors and leaders of al-Qaeda in Iraq
Al-Qaeda in Iraq (AQI; ar, القاعدة في العراق, al-Qā'idah fī al-ʿIrāq) or Al-Qaeda in Mesopotamia ( ar, القاعدة في بلاد الرافدين, al-Qā'idah fī Bilād ar-Rāfidayn), officially known as ''Tanzim Qaidat a ...
(AQI). Nuaymi reportedly oversaw the transfer of US$2 million per month to AQI over a period of time. Nuaymi is also one of several of Qatar-based al-Qaeda financiers sanctioned by the U.S.Treasury in recent years. According to some reports, U.S. officials believe that the largest portion of private donations supporting ISIS and al-Qaeda-linked groups now comes from Qatar rather than Saudi Arabia.
In August 2014, a German minister Gerd Müller
Gerhard "Gerd" Müller (; 3 November 1945 – 15 August 2021) was a German professional footballer. A striker renowned for his clinical finishing, especially in and around the six-yard box, he is widely regarded as one of the greatest goalsco ...
accused Qatar of having links to ISIL, stating "You have to ask who is arming, who is financing ISIS (ISIL) troops. The keyword there is Qatar". Qatari foreign minister Khalid bin Mohammad Al Attiyah
Khalid bin Mohammad Al Attiyah ( ar, خالد بن محمد العطية; born 9 March 1967) is a Qatari politician who was minister of foreign affairs from June 2013 to January 2016. He has been minister of state for defense since January 2016.
...
stated: "Qatar does not support extremist groups, including SIL
SIL, Sil and sil may refer to:
Organizations
* Servis Industries Limited, Pakistan
* Smithsonian Institution Libraries
* SIL International, formerly Summer Institute of Linguistics
* Apex Silver Mines (former American Stock Exchange ticker symb ...
in any way. We are repelled by their views, their violent methods and their ambitions."
Website ''The Daily Beast
''The Daily Beast'' is an American news website focused on politics, media, and pop culture. It was founded in 2008.
It has been characterized as a "high-end tabloid" by Noah Shachtman, the site's editor-in-chief from 2018 to 2021. In a 20 ...
'' in June 2014 accused wealthy donors in Saudi Arabia
Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the A ...
and Qatar
Qatar (, ; ar, قطر, Qaṭar ; local vernacular pronunciation: ), officially the State of Qatar,) is a country in Western Asia. It occupies the Qatar Peninsula on the northeastern coast of the Arabian Peninsula in the Middle East; it sh ...
of having funded ISIL in the past. Iran
Iran, officially the Islamic Republic of Iran, and also called Persia, is a country located in Western Asia. It is bordered by Iraq and Turkey to the west, by Azerbaijan and Armenia to the northwest, by the Caspian Sea and Turkmeni ...
and Iraq
Iraq,; ku, عێراق, translit=Êraq officially the Republic of Iraq, '; ku, کۆماری عێراق, translit=Komarî Êraq is a country in Western Asia. It is bordered by Turkey to Iraq–Turkey border, the north, Iran to Iran–Iraq ...
i Prime Minister Nouri al-Maliki
Nouri Kamil Muhammad-Hasan al-Maliki ( ar, نوري المالكي; born 20 June 1950), also known as Jawad al-Maliki (), is secretary-general of the Islamic Dawa Party and was the prime minister of Iraq from 2006 to 2014 and the vice president ...
have accused the governments of Saudi Arabia and Qatar of funding the group. Ahead of the pro-Iraq, anti-ISIL conference held in Paris on 15 September 2014, France's foreign minister acknowledged that a number of countries at the table had "very probably" financed ISIL's advances. According to ''The Atlantic
''The Atlantic'' is an American magazine and multi-platform publisher. It features articles in the fields of politics, foreign affairs, business and the economy, culture and the arts, technology, and science.
It was founded in 1857 in Boston, ...
'', ISIL may have been a major part of Saudi Arabian Bandar bin Sultan
Bandar bin Sultan Al Saud (born 2 March 1949) is a retired Saudi Arabian diplomat, military officer, and government official who served as Saudi Arabia's ambassador to the United States from 1983 to 2005. He is a member of the House of Saud. From ...
's covert-ops strategy in Syria.
There are sources, however, that stress that there is no evidence that ISIL has direct support from the Saudi government, and that such support would contradict the Saudi state's other actions regarding the group. Saudi Arabia considers ISIL an enemy that has carried out attacks on their soil. They have worked openly with the United States in the arming other rebel groups the US hopes will fight ISIL and retake territory in Syria and Iraq. Saudi Arabia has also developed its own counter-propaganda efforts in response to ISIL's recruitment.
Unregistered charity organisations act as fronts to pass funds to ISIL; they disguise fundings for ISIL's operations as donations for "humanitarian charity". As they use aliases on Facebook's WhatsApp
WhatsApp (also called WhatsApp Messenger) is an internationally available freeware, cross-platform, centralized instant messaging (IM) and voice-over-IP (VoIP) service owned by American company Meta Platforms (formerly Facebook). It allows us ...
and Kik, the involved individuals and organisations are difficult to trace. Saudi Arabia therefore has imposed a blanket ban on unauthorised donations destined for Syria in order to stop such funding.[
]Julian Assange
Julian Paul Assange ( ; Hawkins; born 3 July 1971) is an Australian editor, publisher, and activist who founded WikiLeaks in 2006. WikiLeaks came to international attention in 2010 when it published a series of leaks provided by U.S. Army inte ...
claimed in an interview that Hillary Clinton
Hillary Diane Rodham Clinton ( Rodham; born October 26, 1947) is an American politician, diplomat, and former lawyer who served as the 67th United States Secretary of State for President Barack Obama from 2009 to 2013, as a United States sen ...
's Clinton Foundation
The Clinton Foundation (founded in 2001 as the William J. Clinton Presidential Foundation, and renamed in 2013 as the Bill, Hillary & Chelsea Clinton Foundation) is a nonprofit organization under section 501(c)(3) of the U.S. tax code. It was e ...
and ISIL both receive funding from the same sources in the Middle East.
References
{{Islamic State of Iraq and the Levant
Economy of the Middle East
Islamic State of Iraq and the Levant activities