The Economy of the Islamic State and its Downfall
The economic income of the Islamic State (IS) from oil smuggling, tax collection in occupied territories and other financial income are being reduced by the intense efforts of the countries in Syria fighting against the so-called caliphate. The main effort is to cut oil smuggling that has been of great use to the Islamic state in military operations inside and outside Syria.
Although the situation of oil smuggling by the Islamic State was not new and it can be said that it was not unknown to the intelligence agencies for a long time, we begin to see the results of cutting funding sources by bombing supply lines and trucks coming from the oil fields under IS control.
Evidence of this, are reports that the Islamic State had made a 50% wage cut to its members, and some reports indicate that in some cases they would not be paying anything at all to the military as well as administrative branch of the Caliphate.
At the beginning of 2015 it was estimated that the profits from the sale of oil in the black market reached the 1.3 million dollars per day which allowed the Islamic State, to be the best funded terrorist group in the world. Revenues were generally achieved with the help of corrupt Syrian and Turkish officials, who allowed the sale of oil in a clandestine manner, always remembering that both countries are at war with the Islamic state.
We must also remember that much of the IS comes from forces of the former regime of Saddam Hussein, a regime that had a wealth of knowledge about the sale of oil on black markets, due to sanctions for Iraq's invasion of Kuwait in the 1990s .The embargo was present in the lives of Iraqis from August 1990 to May 2003 (Security Council Resolutions 661 and 668), whereby the sale of oil was a means of acquiring money outside the embargo widely used by The Baathist regime.
Another way of financing the group was the seizing of bank accounts in Iraq and Syrian cities taken in 2014, this could add up to about 500 million dollars. To a lesser extent one can also speak of small exchanges which served as a point of transaction and conversion of Dinars to Dollars and other Western currencies.
Exchange houses that were used to transfer funds and collecting them were mostly in Iraq. These exchange houses and financial services were sanctioned by the US Treasury Department in collaboration with the Iraqi government, one of the best known, Selselat al Thahab, which had been operating since 2007, also used a network of subsidiaries with different names to transfer money belonging to the various groups in Syria and make it look like money that was transferred inside different parts of the company.
Another exchange sanctioned by the United States Department of the Treasury, Hanifa Exchange, worked between Syria and Turkey facilitating the exchange of money to the groups that came and went of the European territory to realize operations, this house of change was considered Of great importance to the Islamic State for the purchase of weapons and ammunition from the group in 2014.
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