Casey Presses Administration for More Action to Counter the Financial Networks that Support ISIS

Washington DC- Today, U.S. Senator Bob Casey (D-PA), a member of the National Security Working Group, announced that he has sent a letter to Secretaries Kerry and Lew pressing the Administration for more action to counter the financial networks that support ISIS. He urged Treasury to designate and levy new sanction on ISIS ‘middlemen’ who facilitate illicit smuggling of oil, antiquities, and other goods. Casey also urged the Administration to consider designating ISIS as a Transnational Criminal Organization (TCO), which could provide the Administration additional authorities in the effort to cut off the flow of money to ISIS. Despite operating largely outside the formal banking sector, reports including a 2015 analysis by the Financial Action Task Force (FATF), indicate that ISIS may be accessing banks near territory it controls. Additionally the Assad regime may be allowing Syrian banks in ISIS-controlled territory to continue business as usual. In his letter Casey also asked for an update on the progress the Iraqi government has made in preventing ISIS from accessing bank branches that are connected to the country’s financial system.  

Casey wrote, “ISIS’s wealth allows them pay competitive salaries for their fighters and to provide some basic services, including food and fuel, in the communities they control. This financial advantage is contributing to the flow of foreign fighters to ISIS’s ranks and may prolong the group’s existence. More must be done to address this element of the comprehensive strategy to combat ISIS.”

The full text of Casey’s letter can be seen below. A pdf is attached. 

Dear Secretary Kerry and Secretary Lew:

In August 2014, I sent you a letter stating, “Any strategy to roll back [ISIS’s] gains must include efforts to cut off their resources.”  I appreciate that soon after this letter, which Senator Rubio also signed, the President laid out a comprehensive strategy to degrade and ultimately defeat ISIS, which included efforts to counter their financial support. 

The Departments of State, Treasury, and Defense have taken important steps to address the main sources of ISIS’s wealth: illicit sale of oil and other resources from territory held in Iraq and Syria, robbery and extortion in communities they control, and kidnapping for ransom. Despite these efforts, ISIS still enjoys considerable wealth a year later. I write to ask for an update on the Administration’s efforts to counter ISIS’s financing, which I believe must remain an essential element of the strategy to combat ISIS.

ISIS’s wealth allows them pay competitive salaries for their fighters and to provide some basic services, including food and fuel, in the communities they control.  This financial advantage is contributing to the flow of foreign fighters to ISIS’s ranks and may prolong the group’s existence. More must be done to address this element of the strategy to combat ISIS.

I understand that one of the main challenges is that ISIS operates largely outside the formal banking sector.  However, a February 2015 report by the Financial Action Task Force (FATF) indicated that ISIS exploits many avenues into the international financial system, including by accessing bank branches in or near ISIS-controlled territory. For example, although the Assad regime claims to be fighting against terrorist groups like ISIS, they allow banks in ISIS-controlled areas of Syria to continue business as usual, in part because they stand to profit from it. FATF reported that the Government of Iraq had taken steps to cut off bank branches in ISIS-controlled territory, and I ask for your assessment of the progress made by the Iraqi government on this effort. 

Illicit oil smuggling remains one of ISIS’s most profitable forms of financing. In March, the European Union levied terrorist financing sanctions against a number of individuals, including a European businessman, who was alleged to be a middleman buying oil from ISIS on behalf of the Assad regime.  I urge you to devote additional resources to the effort to designate and levy U.S. sanctions against any individuals or entities acting as “middlemen” or facilitating the illicit sale of oil from ISIS, especially to the Assad regime. I ask that in your reply, you provide a list of which individuals and entities have been designated for this criminal activity thus far.

In our 2014 letter, Senator Rubio and I also urged you to consider designating ISIS a Transnational Criminal Organization (TCO), noting that in many ways, ISIS’s tactics of extortion, racketeering, and smuggling resemble those of a criminal gang.  Your response did not address this issue, and I ask again for your assessment of whether ISIS qualifies as a Transnational Criminal Organization and whether such a designation would provide additional authorities that would be useful to the Administration in targeting individuals or entities who are complicit in ISIS’s crimes.

In recent months, ISIS and criminal opportunists in the region have looted and pillaged some of Iraq and Syria’s most important archaeological sites and profited from the sale of these antiquities on the black market. House Foreign Affairs Committee leadership, Representatives Royce and Engel, recently secured the passage of the Protect and Preserve International Cultural Property Act through the House of Representatives. I support this legislation, which would provide emergency authority for the protection of cultural property stolen from Syria. As we consider this legislation, I ask for your assessment of whether any additional authorities are required to help curtail the illicit sale of antiquities from which ISIS could profit.

Partners in the region are critical to the effort to combat ISIS financing, but ISIS also leverages social media outlets to connect with non-traditional donors, including in the United States.  What steps has the U.S. Government taken to encourage social media outlets to crack down on terrorist fundraising over their platforms, and have the relevant companies cooperated with the Government’s efforts?

It is clear that ISIS garners financial support from many sectors and strategies, and that its activities are similar to those of a criminal network.  Military efforts to degrade ISIS should be coupled with efforts by the international coalition to root out this vicious terrorist group’s support networks. I respectfully request that you reply with your assessment of the progress the Administration and the international coalition have made already, and I stand ready to work with you to ensure the Administration has the resources and authorities needed to combat ISIS and its financial support networks.

Thank you for your leadership during this challenging time.

Sincerely,

Robert P. Casey, Jr.

United States Senator

###