Thursday, August 28, 2014

Islamic State Fills Coffers From Illicit Economy in Syria, Iraq

Group Pirates Oil, Exacts Tribute From Locals, Making It Among World's Richest in Terror

By Nour Malas and Maria Abi-Habib, WSJ
Aug. 27, 2014 5:37 p.m. ET

The Islamic State runs a self-sustaining economy across territory it controls in Syria and Iraq, pirating oil while exacting tribute from a population of at least eight million, Arab and Western officials said, making it one of the world's richest terror groups and an unprecedented threat.

That illicit economy presents a new picture of Islamic State's financial underpinnings. The group was once thought to depend on funding from Arab Gulf donors and donations from the broader Muslim world. Now, Islamic State—the former branch of al Qaeda that has swallowed parts of Iraq and Syria—is a largely self-financed organization.

Money from outside donors "pales in comparison to their self-funding through criminal and terrorist activities," a U.S. State Department official said, adding that those activities generate millions of dollars a month.

For Western and Arab nations that are striving to stop Islamic State, the group's local funding sources pose a conundrum: A clampdown on economic activity that helps fund the group, counterterrorism officials and experts said, could cause a humanitarian crisis in the already stressed areas it controls.

(More here.)

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