U.S. Strikes Cut Into ISIS Oil Revenues, Treasury Official Says
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Version 0 of 1. The American military campaign against the Islamic State has begun to cut into the Sunni militant group’s substantial oil revenues, the top counterterrorism official at the Treasury Department said on Thursday, but starving its cash flow will be a slow process. “We have no silver bullet, no secret weapon to empty ISIL’s coffers overnight,” David S. Cohen, the Treasury under secretary for terrorism and financial intelligence, said in a speech at the Carnegie Endowment for International Peace in Washington, using an alternative name for the Islamic State. Aside from state-sponsored actors, Mr. Cohen said the group was “the best-funded terrorist organization we’ve confronted.” The group takes in tens of millions of dollars each month, including about $1 million a day through black-market sales of oil extracted from territory it controls, allowing it to amass wealth at an “unprecedented pace,” Mr. Cohen said. Describing an elaborate smuggling operation that uses well-worn routes and old local networks, Mr. Cohen said the Islamic State sold oil to a wide array of buyers, including Iraqi Kurds who resell it in Turkey, and the government of President Bashar al-Assad of Syria. Mr. Cohen said United States airstrikes against refineries the militants control had threatened the group’s supply network. “This will be a sustained fight, and we are in the early stages,” Mr. Cohen said. Mr. Cohen, known inside the White House as the Obama administration’s “financial Batman,” is the government’s point man on Islamic State finances. His comments were the first extensive public description of a below-the-radar-screen aspect of President Obama’s campaign against the Islamic State that American officials regard as just as crucial to weakening the group as airstrikes and other military measures. Still, Mr. Cohen acknowledged that financial warfare was ill suited to combat an organization whose power and wealth are derived in large part from the vast sections of territory it controls. Aside from oil sales, the group also runs extortion and protection schemes that allow it to survive without the kind of outside funding on which many terrorist groups depend. For now, Treasury is focusing on choking off the oil revenue through sanctions on those who benefit from it, and leaning on countries in the region to shut down cross-border smuggling routes that allow its transport — something Mr. Cohen said the Turkish and Iraqi Kurdish authorities had pledged to do. “The middlemen, traders, refiners, transport companies and anyone else that handles ISIL’s oil should know that we are hard at work identifying them, and that we have tools at hand to stop them,” Mr. Cohen said. Part of the goal is to make it more difficult for the authorities in the region to tacitly allow the oil sales to happen. “We now know, and they now know, that this oil begins with ISIL, begins with a terrorist organization, and that the trade in this oil fundamentally funds this terrorist organization,” Mr. Cohen said. “So what may have been a willingness to look the other way in the past is something that I think cannot continue going forward.” Mr. Cohen is also pushing to enlist other countries to join the United States in adopting a no-ransoms policy for kidnapped hostages. Kidnappings for ransom have netted the Islamic State at least $20 million this year alone, he said. Beyond cutting off its sources of money, Mr. Cohen said he was working to isolate the Islamic State from the broader financial system by enlisting the Iraqi authorities and financial institutions to prevent the group from using bank branches in Iraq, Syria and elsewhere. And he suggested that the Islamic State’s considerable cash flow may create a vulnerability for the group, forcing it to organize in ways that make it easier to find and financially blacklist crucial members. “In order to keep track of all its revenues and costs, ISIL depends on complex management networks, with C.F.O.-like figures at the top,” Mr. Cohen said. “As we identify the individuals that make up those networks, we will expose and designate them.” |