The success of the Islamic State (IS) in sustaining its battles on more than one front in both Syria and Iraq, while fighting in several other countries, highlights that the group has multiple and significant sources of funding.
According to data, there are two funding sources: internal and external. The latter includes a wide variety of funding schemes, including through medical facilities, oil and human trafficking mafias. According to sources in Mosul, the money supplied internally is allocated to local and foreign fighters, to encourage them to join up and continue fighting. IS took control of Mosul in June and then expanded in August to control large swaths of the country.
Residents of Mosul say that the sale of oil extracted from wells controlled by the organization in both Iraq and Syria has provided a sustained source of funding. The organization also opened trade canals through Kurdish [territories in] Iraq and Turkey, with the help of Kurdish, Turkish and Iranian traders.
In addition to oil sales, a secondary source of funding stems from the imposition of royalties on residents in IS territories. Members of the organization collect 50,000 dinars [$41.60] from each family as service and protection fees. The amount doubles for families whose sons did not join IS. One of the prominent tribal figures in Nineveh province, Sheikh Mohammad Abu Thayyab, said, “The IS gangs imposed 50,000 dinars worth of royalties on every family if one of their sons did not join these terrorists.”
Sources in the city say that oil prices have skyrocketed. The price of gas tanks used for cooking has reached 75,000 dinars, [about $62] while coal oil is sold at 5,000 dinars a liter [$4.16]. Meanwhile, the price of food has quadrupled.
The third funding source was exposed by otolaryngologist Siruwan al-Mosuli. He said that lately he noticed unusual movement within medical facilities in Mosul. Arab and foreign surgeons were hired, but prohibited from mixing with local doctors. Information then leaked about organ selling. Surgeries take place within a hospital and organs are quickly transported through networks specialized in trafficking human organs. Mosuli said that the organs come from fallen fighters who were quickly transported to the hospital, injured people who were abandoned or individuals who were kidnapped.
He said that organ sales yield large profits. A specialized mafia is engaged in these operations, in addition to medical institutions working in other countries. Without coordination among these parties, such a trade cannot be sustained, he said. According to the Office of the High Commissioner for Human Rights (OHCHR), the organization sells bodies and organs of injured people they arrest.
The fourth source of funding is transforming the city of Nineveh, adjacent to Turkish borders, into a new center for drug trafficking. The Russian Federal Drug Control Service said IS was gaining significant revenues by smuggling and marketing Afghan heroin, which is sent from Iraq to Europe.
“The large-scale movement of Afghan heroin acts as an ongoing financial base, aiding the functioning of the Islamic State, which secures huge profits by providing half of the total heroin supplied to Europe via destabilized Iraq and some African countries,” the Russian body said in a statement.
For its part, the Times of London exposed a human trafficking network established by IS in Mosul, where women and children were sold for money. This also constitutes a funding source for the fighters. According to the newspaper, women and children of Yazidi, Christian and other minority backgrounds are also sold through a networking hub in Syria’s Raqqa.
A report by OHCHR confirmed that more than 25,000 women and children have been imprisoned, sexually violated and sold by IS.
The sixth funding source is human smuggling rings, especially for families who wish to emigrate to other countries. One family reached Turkey after reportedly paying $8,000 for each individual that escaped.
Livestock seized by IS during the occupation of Yazidi, Turkmen and Shiite villages has also been smuggled. According to Ali Abdel Razzak, the majority of the residents in these villages worked in large-scale livestock ranching. So far it has not been established how much IS members seized as spoils of war when the villagers fled.
When it comes to foreign funding, the organization has developed schemes that are difficult to uncover, despite intensive local and international monitoring. One such method, however, uses established trading routes. The organization has networks tasked with collecting donations from wealthy individuals under the pretext of supporting jihad. According to some sources in the trading industry, products are sold in the markets in IS at lower prices than within the countries of origin, a discrepancy that points toward money laundering.
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