Financing Terror: Follow the Money Trail

​Understanding how terrorist organizations receive funding is an essential step in targeting them more effectively. While there are standard trends, it’s vital to look at the specifics of each organization to understand how they finance their activities and work with governments in the region to curb terrorists’ efforts whenever possible. To achieve this end and educate lawmakers the Foundation for Defense of Democracies, (FDD), created the Terror Finance Briefing Book which explains how individual terrorist groups fund their operations. Read more about the FDD CEO here.
 
The Islamic State of Iraq and the Levant (ISIL)
 
ISIL, also known as the Islamic State of Iraq and Syria (ISIS), is one of the best funded terrorist organizations in the world and they aren’t reliant on any outside income. Instead, they derive the majority of their finances from exploiting resources in the region they control, such as petroleum, taxes levied against the local population, extortion, illegal drug production, and money stolen directly from banks. In 2016 ISIL had revenue north of $500 million. The year before that, they likely earned between $1 and $2 billion. The majority of the organization’s expenses cover supplying and paying its large force, as well as maintaining a defense against the local governments and Western coalition forces. Due to the raging war and a severe loss of land-holdings ISIL members experienced a severe cut to wages. In the coming years, it is likely ISIL will become more dependent on external donors to finance its operations.
 
Hezbollah
 
Mark Dubowitz of FDD has stated that Hezbollah spends a great deal of revenue on its fighting forces in Lebanon and Syria, and on dispensing social services in southern Lebanon. Hezbollah stays afloat thanks to ongoing support from Iran, which has contributed billions since the group’s formation. The group has a vast network of illegal businesses around the world. For this reason, it's often referred to as a cartel as much as a terrorist group. Hezbollah has laundered money and run front companies on six continents.
 
Al-Qaeda's Branch in Syria - HTS
 
Hayat Tahrir al-Sham (HTS), is the Al-Qaeda contingent in Syria and generates tens of millions of dollars per year. The group is reliant on maintaining its image as an alternative to ISIL. To meet this goal they pay for sharia courts, provide healthcare, electricity, water, and subsidized food. HTS also runs several charitable operations to appease to the locals and solicit donations. The biggest cost to the group, however, is soldiers’ salaries and military equipment, which is primarily financed through ransom, foreign donations, and the exploitation of resources from the land it controls. Recently HST lost a great deal of oil-rich land to ISIL and has been more dependent on kidnapping to make up for the lost revenue.
 
The Islamic State in West Africa (ISWA)
 
The Islamic State in West Africa (ISWA), is not as well financed as many other organizations but has a significant advantage in its mobility and low-cost operations and largely operates in a poorly governed territory. By exploiting vulnerable populations for resources, the group generated at least $10 million a year until 2015. They have historically taken advantage of the region’s unpoliced borders to carry out raids against villages for food and livestock, but their funding has recently declined and as a result, they have struggled to pay their fighters’ salaries. A key strength of ISWA’s resilience is their lack of reliance on the banking sector. The group has managed to rely on the hawala system to move money and accept donations without being tracked.
 
Each organization is different and will require different solutions to stay ahead of. Whether it’s through sanctions of financial institutions or cracking down on the illicit operations that provide financing to terrorist organizations it’s important that policymakers have the tools necessary to tackle the job. To stay up to date, hear interviews, see news clips, and view other resources check out Mark Dubowitz of FDD on YouTube.