Sanctions on ISIS financiers 'vital tool' in combating terrorism

By Khalid al-Taie


Facing financial troubles as far back as June 2016, ISIS was collecting money from citizens in Mosul for the provision of security, water, electricity and other services during its control of the city. [Photo courtesy of Mosul Channel Facebook page]

The US Treasury's crackdown on terrorist financiers, supporters and entities, especially those associated with the "Islamic State of Iraq and Syria" (ISIS), is making strides in keeping terrorist groups weak and unable to organise attacks, Iraqi analysts say.

The enhanced counter-terrorism sanctions announced September 10th take aim at companies and individuals, including senior ISIS commanders, that were active in transferring funds to the group’s cells in Iraq and Syria and provided banking facilities for them.

Those targeted have also been complicit in planting and transporting explosives, recruiting fighters for the group and training them on how to use weapons, and plotting violent terrorist attacks around the world.

Putting pressure on ISIS

"The new sanctions are part of a large scale effort undertaken by the US Treasury to cut off the financial lifeline for terrorist groups, particularly ISIS," said Iraqi economist Faleh al-Zubaidi.


Iraq’s rapid response forces detain a man as they storm a house in the Tarmiyah district, north of Baghdad, searching for wanted ISIS suspects on July 21st, 2019. Military efforts as well as economic sanctions are effectively taking down terrorist elements in Iraq. [Ahmad al-Rubaye/AFP]

"Stripping these organisations of their financial might means they will soon become marginalised and unable to pay their members salaries or purchase weapons and logistical supplies, therefore resulting in their complete demise," he told Diyaruna.

"This pressure places ISIS and similar groups in an unenviable position since efforts to freeze the assets of their financiers and their bank transfers constitute a key obstacle for the activities of these groups," he said.

"This continuous stripping of the terrorists' financial assets gives us the ability to place them under our control and thwart their plans to recoup and reorganise their affairs," al-Zubaidi said.

Companies that serve ISIS

The new sanctions target a number of businesses that have helped ISIS produce or move currency, including the Saksouk Company for Exchange and Money Transfer, al-Khalidi Exchange, al-Hebo Jewellery Company and its owner Muhamad Ali al-Hebo, and al-Haram Foreign Exchange Co., among others.

These companies have "materially assisted, sponsored or provided financial, material or technological support for, or goods or services to, ISIS", according to the September 10th US Treasury announcement.

Saksouk handled fund transfers on behalf of Syria-based ISIS members in late 2018, the statement said.

Al-Khalidi Exchange served as a hawala financial exchange office as of 2017, the Treasury said.

Hawalas are an informal method of payment based on trust that is far more difficult to trace than bank transfers.

"All locations were run by two individuals who knowingly assisted ISIS members in financial transfers," the statement said. "Al-Khalidi’s office in Mayadin, Syria, also served as an internet café for ISIS members in addition to its function as a hawala money transfer office."

Al-Hebo Jewellery Company was "involved in an ISIS scheme to convert gold into cash to more efficiently and secretly send funds via hawalas in Turkey to ISIS sleeper cells in Iraq and Syria".

As of late 2016, Muhamad Ali al-Hebo "was involved in procuring precious metals to enable ISIS to produce its own ISIS coinage".

Finally, ISIS members in Syria received instruction to conduct all financial transactions with al-Haram Exchange as of April 2019, the Treasury said.

Sanctions 'vital tool to confront terrorism'

The US sanctions represent "fatal stabs to the heart of ISIS and extremist organisations", said Issam al-Fayli, a political science lecturer at al-Mustansiriyah University in Baghdad.

"From a practical viewpoint, these sanctions are a vital tool to confront terrorism that are no less effective than security and military activities," he told Diyaruna.

"During the height of its power, ISIS was able to raise large sums of money through smuggling oil and artefacts and collecting taxes," he said. "The group bankrolled its operations through agents, financiers and wealthy individuals during its heyday."

"However, with the military victories achieved against the group, this wealth has gradually slipped through the hands of the terrorists and has started to disappear thanks to precise targeting of smuggling lines and lost territory," al-Fayli said.

"The US Treasury today is taking strides towards tracing and shutting down funding sources associated with the terrorists and due to such exceptional efforts, the terrorist threat is on its way to being completely wiped out," he said.

"Iraq supports and strongly stands by Washington’s efforts in this direction through enforcing the sanctions and the exchange of intelligence," al-Fayli said.

"With international support, Iraq has succeeded in killing and arresting many prominent financiers of the terrorist group," he added.

Preventing terrorists' access to money

Imposing financial restrictions on terrorist groups is an important and effective tool, economist Saleh al-Hammash said.

These measures "are undeniably necessary to accelerate the demise of these groups and eliminate their evils", he told Diyaruna.

"The new sanctions list is complementary to a series of similar lists that were previously released and had strongly contributed towards preventing money from reaching the pockets of terrorist elements and restricting their access to the global financial system," he said.

"Preventing terrorists from accessing money is an effective measure to achieve stability not only in Iraq and the region but throughout the whole world," al-Hammash said.

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