CATF Reports Dec. 27, 2016, 10:00am


The United Nations Security Council convened over December 12th–13th, 2016 for a joint special meeting titled “Depriving Terrorist Groups from Accessing, Raising and Moving Funds: Practices and Lessons Learned”, focusing on a variety of counter terror financing issues. Up for discussion was how to curb terrorist networks’ - ISIS in particular - continued ability to raise capital through illicit enterprises such as trafficking of drugs, human parts and Syrian artefacts, extortion, kidnapping for ransom and crowdfunding, to name just a few. The niche oil trade that ISIS has carved out for itself was raised as a compelling international issue, since it continues to be one of the group’s primary sources of financing. Although its oil trade has been weakened by recent U.S.-led coalition endeavors, much work remains to immobilize this channel of income. An interesting new proffer raised during Session II of the meeting, specifically covering the financing of foreign terrorist fighters (FTFs), FTF returnees and dormant cells, was the development of a centralized oil sample database to more effectively discern the path of ISIS’ oil trade.

In its oil heyday, experts estimated that ISIS produced about 50,000 barrels daily, earning close to $2.9 billion in annual income from its oil and gas infrastructures alone. As of May 2016, “the United States estimated its revenue had been roughly halved to $250 million a year from the territory it controls in Iraq and Syria”. ISIS still controls a large part of Syria’s oil fields, primarily in the Deir Ezzor province, but has encountered greater blows in Iraq, where its oil smuggling has been reduced by 90% after losing access to three out of five of its previous oilfields.

During the UN meeting, Philippe de Koster, President of Belgium’s Financial Intelligence Processing arm or CTIF-CFI (Cellule de Traitement des Informations Financieres) proposed a compelling initiative to begin tracking illicit oil trades through identification of oil samples. He noted that each oil field has a unique chemical footprint which can indicate the original source of the oil. He posited that gathering key oil samples from fields located in conflict zones and integrating them into a centralized database may be valuable. Not only would it help pinpoint the path of travel of ISIS oil, but potentially any countries complying with or participating in the trade as well.

De Koster threw Interpol’s hat into the ring to offer guidance into this initiative, as the organization assimilated a similar task force in January 2010 and subsequent database in July 2011 known as the Global Database on Maritime Piracy. As originally outlined by Pierre St. Hilarie, Assistant Director of the Maritime Piracy Task Force, the agenda was “to collect and centralize this information for use by the law enforcement community” and to aid in piracy investigations. In November 2016, the UN Security Council cited that the piracy threat had lessened, albeit still significant, and in its statement lauded Interpol's contributions in "disrupting the piracy enterprise". The U.S. State Department also spoke to its value as a centralized information-sharing tool during a 2012 meeting discussing counter-piracy.

Additionally, de Koster pointed out the potential opportunity to capitalize on existing European programs to combat illegal immigration. The EUNAVFOR Med Operation Sophia,  a military operation launched by the EU in May 2015 to address migrant smugglers and traffickers in the Southern Central Mediterranean, sets a particularly important precedent. De Koster speculated that oil samples could be obtained through existing inspections of vessels transporting oil. Notably, in October 2015 the operation advanced into its second stage, which “entails boarding, search, seizure and diversion, on the high seas, of vessels suspected of being used for human smuggling or trafficking”. Operation Sophia is still evolving, and is not without its inherent challenges, but thus far it has received positive support from 24 contributing EU member states. By the numbers, it has arrested 87 traffickers and smugglers and removed 296 vessels from criminal organizations availability since its inception.

As illustrated, a database would strengthen capabilities to combat ISIS’ oil trade, and with input from the Interpol and EU initiatives mentioned, potentially shed light on radicals traveling amongst migrants that may be participating in the trade. Additionally, Europol, the EU’s law enforcement agency, recently stated in its December 2016 report titled “Changes in Modus Operandi of Islamic State (IS) Revisited that “it is in the interests of IS (Islamic State) to inflame the migration crisis to polarize the EU population and turn sections of it against those seeking asylum…a real and imminent danger is the possibility of elements of the (Sunni Muslim) Syrian refugee diaspora becoming vulnerable to radicalization once in Europe and being specifically targeted by Islamic extremist recruiters”.

The creation of a database would only help gain insight on how to further handicap ISIS’ oil trade, which could supplement the U.S.-led coalition that has directed over 16,100 air strikes on its oil infrastructure in Iraq and Syria since August 2014. The average oil production level in each Syrian province following air strikes appears to have shrunk by almost half the previous amount, according to Newsweek. Falling oil prices have added further insult to injury, as ISIS has been forced to trade its oil at a steep discount. Also, a successful strike last May killed “oil emir”, Abu Sayyaf, allowing U.S. officials to gather documents containing vital information about the organization’s oil enterprise to pass along to the Pentagon.

While there is still much progress to be made, current efforts to curb ISIS oil trade have proved successful, and the implementation of new technological efforts will only help weaken ISIS’ capabilities. However, the true merit lies in expeditious development of such a database in order to adequately aid the military offensive against the organization going forward.

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