Well funded and dangerous: assessing the Islamic State’s financing operations
| Date | 02 May 2017 |
| Pages | 159-171 |
| DOI | https://doi.org/10.1108/JMLC-07-2016-0026 |
| Published date | 02 May 2017 |
| Author | Michael Tierney |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Well funded and dangerous:
assessing the Islamic State’s
nancing operations
Michael Tierney
Innisl, Canada
Abstract
Purpose –Theexisting literature on Islamic State of Iraq and Syria (ISIS) has thus far focused on the group’s
contemporary or previous nancing activities. However, there has not been an analysis of the ways in which
ISIS’ funding is likely to change moving forward now that it has come under international scrutiny. The
purpose of this paper is to assess the ways in which ISIS’ funding is likely to evolve in the future and to also
suggest methods for combating its nancing activities.
Design/methodology/approach –The paper is theoretical in nature. By assessing the existing literature
on terrorist nancing, it is apparent that terrorist organizations alter their funding sources and methods after
coming under intense international scrutiny. Therefore, two hypotheses are put forth for the future of ISIS’
funding activities: the group will become more effective at building social support among its local population,
thereby consolidating is funding sources and methods within Syria and Iraq; and the group will increasingly
branch out, searching for sources from a transnational network, as its base in Syria and Iraq begins to
deteriorate.
Findings –Community support is essential for sustaining a terrorist network. As a result, it is likely that
ISIS will increasingly seek funding from a transnational network as its base of support in Iraq and Syria
begins to deteriorate. There is also a distinct third possibility that the group will be able to consolidate its base
while also moving abroad for nancial support. This third option presents the most complicated outcome for
the international community in its ght against ISIS.
Originality/value –This study lls a gap in the literature on terrorist nancing, particularly with regards
to ISIS, to assist the international community in its ght against the group both now and moving into the
future.
Keywords Terrorism, ISIS, Terrorist nancing, Counter terrorism, Islamic state
Paper type Research paper
Introduction
Preventing the nancing of terrorism has been a central theme of counter terrorism policies
since the 9/11 attacks on the USA. However, the actual identication and blockage of funds
which go towards maintaining terrorist organizations and their operations has proven
difcult. Scholars and practitioners alike have admitted that the odds of detecting terrorist
nancing are relatively small given the fragmentation of many contemporary terrorist
groups (The Economist, 2005). Moreover, terrorists and their nanciers have become
procient at eluding detection through new funding practices and by maintaining discreet
but robust sources of funding to survive (Kaplan, 2006). Yet, understanding the nancing of
terrorism both generally and in the context of specic groups is important. Researchers note
that only by understanding terrorist nancing can effective practices be adopted for
combating terrorism in general (Jonsson and Cornell, 2007;Freeman, 2012;Peters, 2012).
Further, terrorist groups require funding to operate, not only to conduct attacks but also to
support their members and to maintain the day-to-day activities of their organizations
(Freeman, 2012;Jonsson, 2010). Therefore, increased scrutiny is needed on the subject of
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Islamic State’s
nancing
operations
159
Journalof Money Laundering
Control
Vol.20 No. 2, 2017
pp.159-171
©Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2016-0026
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