Joby Warrick<\/p>\n
THE militant Islamic State group starts the new year with a drastically depleted bank account, counterterrorism officials say, following months of intensified efforts to deprive the militants of oil profits and other revenue used to finance military operations and terrorists attacks abroad.<\/p>\n
Coalition aircraft in the past 15 months have destroyed more than 1,200 tanker trucks \u2014 including 168 vehicles struck in a single air raid in Syria in early December \u2014 while also using new weapons and tactics to inflict lasting damage on the terrorists\u2019 remaining oil fields, US and Middle Eastern officials say.<\/p>\n
The military strikes are being paired with new measures intended to shut down financial networks used by the IS to procure supplies and pay its fighters, the officials say. Two weeks ago, the US and Iraqi governments announced the first coordinated effort to punish Iraqi and Syrian financial services companies used by the terrorists to conduct business.<\/p>\n
The campaign has slashed profits from oil sales, traditionally the biggest revenue source for the IS, US officials say, and deepened the economic pain for a terrorist organisation that until recently was regarded as the world\u2019s wealthiest.<\/p>\n
One sign of the financial strain, the officials say, is a shrinking payroll: After cutting salaries by 50 per cent a few months ago, the IS now appears to be struggling to pay its workers and fighters at all.<\/p>\n
\u201cWe are destroying ISIL\u2019s economic base,\u201d Brett McGurk, President Barack Obama\u2019s administration\u2019s special envoy to the 67-nation coalition arrayed against the IS, said at a news briefing recently, using one of the common acronyms for the militants. Just a year ago, the militants were luring foreign fighters with promises of generous pay checqus, but today \u201cthat is not happening\u201d, he said.<\/p>\n
\u201cTheir fighters are not getting paid,\u201d McGurk said, \u201cand we have multiple indications of that.\u201d<\/p>\n
Coalition planes have been bombing the group\u2019s oil fields and tanker fleet for more than two years, but the most notable successes in recent months have come from military operations that targeted individual oil wells, including well casings and other underground infrastructure, according to US and Middle Eastern officials familiar with the new strategy.<\/p>\n
The tactics make it all but impossible for the IS to repair the wells or extract oil through makeshift techniques, the officials said.<\/p>\n
Oil revenue now tiny fraction<\/strong><\/p>\n Previous air strikes crippled IS\u2019s oil-producing capacity, but the militants consistently found ways to pump and refine oil in smaller batches using primitive methods, said a senior US counterterrorism official. Now, even the small-scale operations are struggling, he said.<\/p>\n \u201cWe can take them back to the 19th century, but people were still able to extract oil in the 19th century \u2014 it bubbles up to the ground and they find a way to bottle it and sell it to someone,\u201d the official said. The new approach involves inflicting \u201cthe maximum amount of damage with the right weapons so it will not be easy or quick for them to repair,\u201d the official said.<\/p>\n The improved targeting comes against a backdrop of ongoing air strikes on tanker trucks used to haul oil and refined products such as gasoline and diesel. The bombing campaign, dubbed Operation Tidal Wave II, initially focused on large tanker convoys before the IS leaders switched tactics and began relying on smaller vehicles, often travelling alone and hidden or camouflaged by day to elude detection.<\/p>\n Yet on Dec 8, US warplanes spotted and destroyed a caravan of 168 tankers near the terrorist-held Syrian city of Palmyra, in the largest raid of its kind since the conflict began. The US pilots dropped leaflets warning the drivers \u2014 typically civilians and local conscripts \u2014 of the impending attack before A-10 \u201cWarthog\u201d jets swooped in to strafe the convoy.<\/p>\n \u201cWhile the Palmyra raid was exceptionally large, the attacks themselves are a regular occurrence,\u201d said Daniel Glaser, the Treasury Department\u2019s assistant secretary for terrorist financing. \u201cThis has been an ongoing campaign over the past year to target those tanker trucks.\u201d<\/p>\n As the result of such raids, oil revenue for the IS is now a tiny fraction of the estimated $1.3 million per day the group was earning in early 2015, US and Middle Eastern officials said. Still, small truckloads of oil, mostly from the Syrian side of the militants\u2019 self-proclaimed caliphate, continue to find their way to the black market, aided at times by corrupt officials in Syria and Turkey, two countries that are officially at war with the IS, the officials said.<\/p>\n \u201cISIL is still selling oil to [Syrian President Bashar] al-Assad,\u201d said a Middle Eastern official familiar with operations against the IS, who spoke on the condition of anonymity to discuss sensitive intelligence. \u201cIt\u2019s an important revenue source, and we see Assad\u2019s people continuing to facilitate.\u201d<\/p>\n Destroying the IS\u2019s financial underpinnings has been a primary objective for the US-led coalition since 2014, although progress at times has been halting.<\/p>\n Unlike Al Qaeda, the IS is largely self-financed, deriving most of its income from oil sales and criminal enterprises, as well as from money taken through taxes and fees extracted from local residents and businesses in the territories it occupies.<\/p>\n The terrorist group also benefited initially from the vast hard-currency holdings it confiscated when it seized banks in Iraqi and Syrian cities in 2014. The cash windfall \u2014 at least $500 million initially, according to US estimates \u2014 has largely vanished, in part because of US air raids that targeted the bunkers where the money was stored.<\/p>\n Cost of signature terrorist strikes<\/strong><\/p>\n A more challenging target for US and Iraqi officials has been the network of small, loosely regulated exchange houses traditionally used by Iraqis and Syrians to wire funds and exchange local dinars for Western currency. US Treasury officials have been working with Iraqi counterparts for more than a year to identify and shut down key exchange houses used by the IS to make purchases, collect oil receipts and pay its fighters and employees.<\/p>\n In the coordinated action by US and Iraqi officials in early December, Baghdad banned one Iraqi exchange house from accessing Iraq\u2019s financial system and froze the company\u2019s assets. Treasury officials simultaneously slapped sanctions on the firm, identified as Selselat al-Thabab Money Exchange, and on a Syrian businessman accused of acting as a banker and financier for the IS in that country.<\/p>\n \u201cISIL relies heavily on exchange houses and transfer companies to move and gain access to funds,\u201d said Treasury\u2019s Glaser, \u201cand these designations represent the opening of another front in our effort to combat ISIL\u2019s tentacles into the formal financial system.\u201d<\/p>\n Keeping up the pressure on the group\u2019s financial networks is particularly critical at a time when the IS is suffering military defeats and territorial losses in Iraq and Syria, counterterrorism officials said.<\/p>\n Even in a depleted condition, the Islamic militants\u2019 financial assets are judged to be more than sufficient for carrying out terrorist operations abroad. Indeed, the IS\u2019s signature terrorist strikes \u2014 including the attacks in Paris on Nov 13, 2015, that killed 130 people \u2014 are believed to have cost no more than a few thousand dollars each.<\/p>\n \u201cYes, we\u2019re hurting them financially,\u201d the Middle Eastern official said. \u201cBut I\u2019m not yet seeing such impacts on their covert activities.\u201d<\/p>\n By arrangement with The Washington Post<\/em><\/p>\n Published in Dawn January 3rd, 2017<\/em><\/p>\n<\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Joby Warrick THE militant Islamic State group starts the new year with a drastically depleted bank account, counterterrorism officials say, following months of intensified efforts to deprive the militants of oil profits and other revenue used to finance military operations and terrorists attacks abroad. 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