FINANCING OF THE TERRORIST ORGANISATION ISLAMIC STATE IN IRAQ AND THE LEVANT (ISIL)
18
2015
payments amount to as much as the equivalent of several billion USD per year, meaning that ISIL
could potentially profit hundreds of millions of USD annually from taxing these salary payments.
2. KIDNAPPING FOR RANSOM
ISIL has reportedly kidnapped hundreds of individuals, including local Iraqis, Syrians and members
of ethnic minorities, as well as Westerners, and East Asians located in the region. With some of
these kidnapped victims, ISIL used them to extract ransom payments, while others are brutally
murdered to send a political message.
44
In certain cases, ISIL has purchased Western hostages from
moderate rebels at border exchanges. Over the past year, ISIL has raised substantial revenue
through ransom payments for kidnapped victims, with FATF members providing estimates that
range from 20 million USD to 45 million USD.
45
Exact figures with respect to how much ISIL has
earned from ransom payments are difficult to assess and often intentionally kept secret since
ransom payments often originate from private companies that wish to conceal the transaction, or
are otherwise paid in cash, making the transactions difficult for financial institutions to identify.
In 2010 the FATF conducted a study on Kidnapping for Ransom (KFR) which provides unique
insight into the significance of revenue generated from KFR for a number of terrorist groups and
criminal organisations and the role of the regulated financial sector.
46
Several UNSCRs, including
2133 (2014) and 2170 (2014), call on all Member States to prevent terrorists from benefitting,
directly or indirectly from ransom payments.
47
In addition, UNSC resolution 2161 (2014) confirms
that the prohibition on providing funds to individuals and entities on the Al-Qaida Sanctions List,
including ISIL, also applies to the payment of ransoms to individuals, groups, undertakings or
entities on the list, regardless of how or by whom the ransom is paid.
48
As such, resolution 2161
applies to both direct payments and indirect payments through multiple intermediaries, of ransoms
to groups or individuals on the Al-Qaida Sanctions List. These restrictions apply not only to the
ultimate payer of the ransom, but also to the parties that may mediate such transfers, including
insurance companies, consultancies, and any other financial facilitators.
3. DONATIONS INCLUDING BY OR THROUGH NON-PROFIT ORGANISATIONS
(NPOS)
The overall quantitative value of external donations to ISIL is minimal relative to its other revenue
sources, but ISIL has received some funding from wealthy private regional donors. On September
24, 2014, an ISIL official who received a 2 million USD donation emanating from the Gulf was listed
and sanctioned by the US Department of the Treasury. ISIL has also turned to enabled contributions
44
See Monitoring Team Report on ISIL and ANF, at 24; see Salman, R., & Holmes (2014).
45
US Department of Treasury (2015).
46
FATF (2011).
47
UNSCR 2133 (2014), OP3; UNSCR 2170 (2014), OP 17.
48
UNSCR 2161 (2014), OP7
FINANCING OF THE TERRORIST ORGANISATION ISLAMIC STATE IN IRAQ AND THE LEVANT (ISIL)
2015
19
for financial backing to support its military campaign (see section on Funding through modern
communication networks
).
49
Foreign donor support could increase in importance for ISIL as other sources of revenue diminish.
There is also a risk that US-listed individuals and groups that have recently pledged allegiance to
ISIL, including one faction of the Philippines-based Abu Sayyaf Group and Egypt-based Ansar Bayt
al-Maqdis (ABM), may also develop stronger organisational ties that could lead to the provision of
funding from one group to ISIL or vice versa.
50
Funds from these groups may be remitted through
the international financial system.
Some delegations identified terrorist financing risks regarding wire transfers from charitable
foundations to conflict zones or areas where ISIL operates. Other risks identified include the
presence of NPOs raising funds for recipients in a third country which are or are suspected to be
part of an organisation structure that engages in violent or paramilitary activities. These risks are
enhanced when the source of the funds and purpose of the transaction is not known or cannot be
verified. These instances include transactions not listing any reference or using generic terms such
as “other”, “services” and “goods”. In some cases, public appeals for donations have not correlated
with the organisations’ stated purpose (e.g. educational, health care or humanitarian relief).
Case Study 1:
Distance adoptions-related donations performed by a FTF
The account at an Italian bank of an organisation based in Northern Italy promoting charitable
activities (e.g., distance adoptions) in Syria received cash deposits and wire transfers (mostly
involving small amounts) sent by numerous individuals and entities in located in Italy and Europe.
Once credited, funds were sent to Turkey, where they would be withdrawn for their final legitimate
use (most descriptions associated with the transactions referred mainly to “adoptions” ).
At a later stage, with reference to a limited number of transfers, investigations revealed that one of
the donors was a member of an extremist group located in the North of Italy aimed at recruiting
people to engage in violent extremism. Financial analysis eventually showed that this individual,
who subsequently died fighting in Syria, used the organisation as unwitting conduit for fund
transfers possibly connected to his terrorist activity.
Source: Italy
Some delegations have noted the movement of money among charitable organisations and principal
officers purportedly serving the needs of Syrian refuges. The movement of these funds may be
linked to an organisation's inability to transfer funds internationally, or who are relying on partner
organisations to move funds on their behalf. However, such movement can give the appearance that
charities may be attempting to obscure the source of their funds before they are transferred
overseas. Charitable donations moved via physical cross-border transportation may also pose TF
risks. On one occasion an EU member state’s police liaison in Ankara requested that Turkish
authorities stop and search three trucks that were expected to leave for Turkey, under the suspicion
49
Monitoring Team Report on ISIL and ANF, at 25.
50
Fadel, L. (2014).