A UK Parliamentary committee has found there to be “historical evidence of instances of financial donations to Daesh from within Gulf States”. A report published on July 12 by the Foreign affairs Committee stated that “family donations are being made to Daesh, through the unregulated Alternative Value Transfer Systems”. The Foreign Affairs Committee established a sub-Committee in January 2016, as part of its inquiry into the UK’s role in the economic war against Daesh.
According to MP Tobias Ellwood, who provided evidence to the inquiry, there was a time before 2014 and soon after the group first caught international attention, when they may have been “perceived as a defender of Sunni Muslims in the wars in Iraq and Syria”. During this time, the group would have attracted donations from “sympathetic Sunnis” with the “wealthiest states in the region – the Sunni monarchies of the Gulf – being the subject of particular concern”.
The head of the UK’s Daesh task force, Dan Chugg, said, “It was certainly a problem in the early days of the Daesh organisation that there was funding coming in from Gulf countries and other places.”
Chugg went on to say, “It is difficult with some of these countries to know exactly what is Government funding and what is not when you are dealing with royal families, wealthy princes and those kind of things.”
It was only in March 2015 that the Interior Ministry of Saudi Arabia passed laws making it illegal for Saudi residents to provide support to Daesh. In contrast, the UK designated ISIL (Daesh) as a terrorist organisation in June 2014. Despite falling behind other states in the “economic war” against Daesh, Saudi Arabia, along with the US and Italy is co-chairing the Counter-ISIL Finance Group.
No precise figures can be generated, according to the inquiry, but the sale of crude oil and extortion are believed to be Daesh’s most important streams of revenue. According to the Foreign Office, 40% of the group’s revenue is gained from oil sales, and a further 40% from “extortion, taxation and the local cash economy”. It is believed that Daesh has looted up to $1 billion from the populations and banks under its control.
A document obtained from the group provided information on Daesh’s revenue in the Syrian province of Deir ez-Zour over the course of a month. The document showed a surplus, with Daesh making in revenue $3 million more than it spent. Money from oil and gas made up 27% of its revenue, according to the document, and 25% came from taxes. The largest proportion of the revenue (44%) came from confiscations of items such as houses, cars and land.
Despite getting hold of some evidence, the sub-committee pointed to the difficulty of fully understanding the financial infrastructure of the group as it is continually evolving. Furthermore, not a lot is known about the group’s affiliate in Libya. This is particularly problematic as a “holistic understanding of ISIL is vital to the effective global defeat of the group”.
So far coalition airstrikes have targeted oil wells and people who are believed to be key financial operatives for Daesh in an attempt to undermine the group’s financial stability. The report warns of the negative implications of these actions, such as the damage to infrastructure in towns and cities under Daesh control, and the endangerment of civilians.
The report provides recommendations for improving UK intelligence gathering on Daesh, but maintains that the recapturing of territory is the ultimate goal, and the most effective means to undermine the group’s finances. The UK has trained more than 3300 Peshmerga [Kurdish] and over 7200 Iraqi Security Force soldiers, and these personnel, supported by Coalition airpower, have been involved in regaining territory in Ramadi and Sinjar. The recent re-capture of Mosul in Iraq and Raqqa in Syria has been an important victory against the group.