Islamic State Finding New Funding In Iraq And Syria

Despite bombings and financial sanctions the Islamic State is still coming up with ways to bring in cash. The Wall Street Journal and Financial Times just documented IS’s deals with Iraqi money exchangers and Syrian oil traders to keep money flowing into the caliphate. It’s yet to be seen whether that’s enough to sustain itself, but it shows that it will still take a lot more to cut off the group’s sources of funding.

Erika Solomon from the Financial Times reported on how the Islamic State is offering bulk oil deals in an attempt to avoid coalition air strikes. IS is issuing 1,000 barrel petroleum licenses to oil traders in Syria. A Syrian trucker said that three businesses had been given these offerings that involve the al-Omar field. This was in direct response to coalition air strikes that have been hitting tanker trucks at oil fields and IS’s storage facilities. By making these large deals IS can be assured of sales and arrange times and places for deliveries to avoid a large number of trucks cuing up at the Omar field, which might invite an air strike. It also keeps their oil flowing to local markets in Syria and Iraq, which the group has come to rely upon. For the traders they can buy a large quantity of oil from IS instead of waiting for small purchases with everyone else.

The Wall Street Journal added another piece on money exchangers who continue to operate in IS controlled territory. These businesses play a crucial role in sustaining the caliphate as they deliver cash. At the center of this network is allegedly Abu Omar, a Mosul based businessman who also operates in Irbil, Sulaymaniya and Hit. After Mosul was taken in June 2014 he agreed to handle the organization’s money affairs. He and other exchanges reportedly bring in cash into the caliphate through three main routes. One is from Istanbul through Kurdistan to Mosul. Another is from Amman to Anbar and Baghdad, and the third is from Turkey’s Gaziantep to Raqqa, Syria. Allegedly Peshmerga and Hashd accept bribes to allow these businesses to delivery cash into IS areas. At the end of 2014, the U.S. warned the Central Bank of Iraq about these companies and how they were buying U.S. dollars at the Bank’s auctions to support IS. The Central Bank responded by handing out fines to banks and then banned 142 money exchangers in December 2014 from the auctions. The problem was that Iraq has no real regulators so all these businesses had to do was set up a front company and they could get right back into buying dollars. Baghdad cannot crackdown on the money exchanges or auctions for two main reasons. First, many of Iraq’s traders rely upon exchanges rather than banks to provide cash for their transactions, so they can’t be shut down without crippling the economy. Second, Iran, Syria, Iraqi organized crime rings, and the nation’s ruling parties are all involved in buying dollars from the Central Bank to either gain access to hard currency or to sell on the open market for a profit. That is a powerful group of actors, which banking officials do not want to confront. That means there will be no real reform of the auctions or effective measures taken against the exchanges to limit the Islamic State’s access to dollars and cash.

One of the defining features of the Islamic State is its resilience. Faced with powerful enemies the group is still working on counter moves. It is attempting to create new oil contracts to deal with air strikes. It has also continued to bring in cash through money exchangers, which keeps its economy going. Western reports have IS struggling. It has allegedly cut the salaries of its fighters, imposed fuel rationing, and is facing rising prices. As one of its key phrases says however, the group is enduring these setbacks and attempting to find ways to overcome them. They highlight the fact that the caliphate is being hurt, but there is still a long way to go before it is defeated.

SOURCES

Solomon, Erika, “Isis oil: deal with traders nets jihadist badly needed funds,” Financial Times, 2/26/16

Wall Street Journal, “Why ISIS’s secret banking network prospers despite air strikes,” 2/25/16

Musings On Iraq In The News

Al Mada republished my article on Iraq continuing to use the fake bomb detectors.

VIDEO: Iran-Iraq War Documentary

MIDDLE EAST INSTITUTE: Assessing Iran's Support for Regional Militias

Security In Iraq, Feb 15-21, 2016 (REVISED)

After a two year low in casualties the previous week, violence was back up to its normal level from February 15-21, 2016. The heaviest fighting continued in Anbar, while Baghdad was still the most dangerous province in the country. In Kirkuk and Ninewa the Islamic State also executed a large number of people, and there was an uptick in attacks upon the Peshmerga in the latter. This could be the face of violence in Iraq for the rest of the year with IS focusing upon terrorist attacks upon cities, and insurgent attacks in the rest of the country.

There were 130 reported attacks the third week of February. That was up from the 119 recorded the week before, which was the lowest amount since 2013. That dip was a pause in operations by the Islamic State after it launched a huge number of counter attacks after it lost Ramadi. Now security appears to be back to what it was before that.

Baghdad had the most recorded incidents with 58. After that there were 19 in Anbar, 17 in Ninewa, 15 in Kirkuk, 8 in Diyala, 7 in Salahaddin, and 6 in Babil.

225 people were killed during the week and another 239 wounded. The dead consisted of 1 Sahwa, 1 Hashd al-Shaabi, 9 Peshmerga, and 29 members of the Iraqi Security Forces (ISF), and 185 civilians. The injured included 2 Sahwa, 5 Hashd, 12 Peshmerga, 15 ISF, and 221 civilians.

Anbar remained the major conflict zone in Iraq. There was fighting outside Ramadi and Fallujah, and in the Haditha district. IS reportedly launched 2 car bombs, 4 motorcycle bombs, 9 suicide bombers, and 16 suicide car bombs, all of which but one suicide car bombs were killed or destroyed. There were also stories on two air strikes on Amiriya Fallujah and Fallujah that led to two civilian deaths and 15 injured.

The security forces were still pushing forward into Ramadi’s suburbs along with offensives in Garma and the Fallujah area. Hamidiya to the east was declared cleared, but fighting continued there past the end of the week. Operations were also launched against Jazeera to the east and Albu Obeid in the north, and in three towns around Garma, and the city itself. The Iraqi forces were also trying to clear the Saqlawiya area just to the west of Fallujah. The securing of the Ramadi areas appears to be very successful right now. On the other hand, the fight for Garma and Fallujah has been going on for months now with no real sign of progress. Several towns in the Ramadi district were still said to be under IS control however. Dissent is appearing as well. There were a few days of fighting in Fallujah, and there were reports of clashes in Hit too. The latter might be the focus of the next major offensive.

As the Islamic State loses the ability to hold onto territory it has refocused upon carrying out terrorist attacks upon the capital. Most of those occur in the south where there were 18 incidents, 16 of which were likely the work of the militants including one sticky bomb, and 11 IEDs. What has been a major change in IS tactics, is that it is not relying upon car bombs as much anymore. Before there was almost one such bombing a week. Now those are rather rare with the last one occurring more than a month ago. The Islamic State however is not the only threat in Baghdad, as there are vigilantes, Hashd and criminals operating throughout the governorate. For example, there were 4 kidnappings and 7 major robberies reported during the week. Also 13 bodies were discovered dumped in the streets. Three American contractors that were abducted were also released. An Iraqi intelligence official told the New York Times that a Shiite armed group was suspected, which was another sign of the growing lawlessness in the province.

Security Incidents In Baghdad, Feb 15-21, 2016

Center: 7 – 1 Robbery, 1 Kidnapping, 1 Kidnapping/Shooting, 1 Shooting, 2 Robberies/Shootings, 1 IED

East: 15 – 1 Grenade, 1 Kidnapping, 1 Sticky Bomb, 1 Stabbing, 2 Robberies, 4 IEDs, 5 Shootings

Outer East: 2 – 1 Sticky Bomb, 1 IED

North: 6: 1 Robbery, 1 Sticky Bomb, 2 Shootings, 2 IEDs

Outer North: 4 – 1 Stabbing, 1 IED, 2 Shootings

South: 8 – 1 Shooting, 7 IEDs

Outer South: 10 – 1 Kidnapping/Shooting, 1 Robbery, 1 Sticky Bomb, 3 Shootings, 4 IEDs

West: 4 – 1 Sticky bomb, 3 IEDs

Outer West: 3 – 1 Mortar, 2 IEDs

Southern Iraq is facing a similar situation. Many ISF units were pulled out of the region to fight the insurgency leaving a vacuum. That has led to growing tribal conflicts and criminal activity. The government launched a major security operation in Basra, but fighting between clans continued there and in other provinces afterward.

During the week the United Nations accused the Hashd of kidnapping and killing one of its workers in Diyala’s Baquba. The man was kidnapped in April 2015, but his identity was not confirmed until February.

Kirkuk saw an increase in incidents. That was due to the Islamic State executing people in Hawija and Riyad. The militants still hold the southern section of the governorate, and have been cracking down on the population there. During the week 36 people were said to have been killed by the group. The main reason given in the press was that they were attempting to flee the Islamists and were caught.

In Ninewa, IS executed 21 people, while attacking Kurdish positions. Unlike in Kirkuk the killing of civilians in this province does not appear to be part of a new crackdown, but rather business as usual for IS. There executions are carried out for violating the group’s religious rules, suspicion of cooperating with the security forces, etc. Outside of Mosul the militants carried out 11 attacks upon the Peshmerga. That was far above the normal number, but they were all turned back.

There was very little violence in Salahaddin, which was a dramatic change from the status quo. There were only 7 reported incidents during the week, the fewest since Musings On Iraq began collecting data in January 2013.

From February 15-21 there was only one successful car bombs reported in Iraq. 19 were destroyed, 17 in Anbar and 2 in Ninewa. Anbar’s Amriya Fallujah was where one car bomb got through defenses and hit the security forces on February 20. IS had launched one attack upon positions there with car bombs and an infantry assault that was turned back. IS came back again, and this time one suicide bomber got through and killed 13 members of the security forces. Official numbers on car bombs are usually greatly exaggerate the number of car bombs they face each week, but there has definitely been a decided increase in their occurrence in the last few weeks. The main reason appears that IS has given up on its counter attacks following its loss of Ramadi, and so there has been a temporary lull in car bombings.

Violence In Iraq By Week 2015-16

Date	Incidents	Dead	Wounded
JAN	911	2,656	3,032 + 150
FEB	730	2,345	2,366
MAR	820	2,665	2,529
APR	751	2,753	2,621
MAY	674	2,565 + 1,499	1,952 + 646
JUN	708	2,153 + 405	2,174
JUL	688	2,716	3,198 + 4,024
AUG	684	2,440 + 760	1,777
SEP	649	1,731	1,668 + 3,003
OCT	589	1,144	1,555
NOV	530	1,174	1,455 + 124 + 1,322
DEC	553	1,155	1,252 + 5,920
Jan 1-7	150	808	421
Jan 8-14	140	436	417
Jan 15-21	135	275	227
Jan 22-28	132	392	322
Jan 29-31	41	81	334
JAN	598	1,992	1,721
Feb 1-7	146	575	313
Feb 8-14	119	146	323
Feb 15-21	129	212	239

Security By Province Feb 15-21, 2016

Province	Jan
Anbar	18 Incidents 56 Killed: 1 Hashd, 3 ISF, 52 Civilians 21 Wounded: 2 ISF, 5 Hashd, 14 Civilians 11 Shootings 2 IEDs 4 Motorcycle Bombs Destroyed 9 Suicide Bombers Killed 15 Suicide Car Bombs Destroyed 2 Car Bombs Destroyed
Babil	6 Incidents 5 Killed: 1 ISF, 4 Civilians 26 Wounded: 5 ISF, 21 Civilians 1 Shooting 5 IEDs
Baghdad	58 Incidents 60 Killed: 6 ISF, 54 Civilians 159 Wounded: 7 ISF, 152 Civilians 23 Shootings 19 IEDs 5 Sticky Bombs 1 Grenade 1 Mortar
Diyala	8 Incidents 6 Killed: 2 ISF, 4 Civilians 1 Wounded: 1 ISF 2 Shootings 1 IED 2 Sticky Bombs 1 Bicycle Bomb Disarmed
Kirkuk	15 Incidents 46 Killed: 3 ISF, 43 Civilians 2 Wounded: 2 Civilians 7 Shootings 3 IEDs 1 Rocket
Ninewa	17 Incidents 30 Killed: 9 Peshmerga, 21 Civilians 12 Wounded: 12 Peshmerga 6 Shootings 2 IEDs 1 Mortar 2 Rockets 4 Suicide Bombers Killed 2 Car Bombs Destroyed
Salahaddin	7 Incidents 9 Killed: 1 ISF, 1 Sahwa, 7 Civilians 19 Wounded: 2 Sahwa, 17 Civilians 5 Shootings 2 IEDs

Car Bombs In Iraq, February 2016

Date	Location	Dead	Wounded
Feb 1	Tal Kasaiba, Salahaddin Jeraishi & Niamiya, Anbar – 9 destroyed Alas and Ajeel, Salahaddin – 4 destroyed		2
Feb 2	Albu Diab, Anbar Albu Diab, Jeraishi, Garma, Sjar, Thar Thar, Anbar – 10 destroyed	18
Feb 3	Albu Soda, Anbar – 4 destroyed Kudila, Ninewa – 4 destroyed West of Samarra, Salahaddin – 1 destroyed
Feb 4	Outside Fallujah, Anbar – 12 destroyed Kudila, Ninewa – 3 destroyed
Feb 5	Baghdadi, Anbar – 1 destroyed Alas, Salahaddin – 1 destroyed
Feb 6	Ain al-Assad, Fallujah, Ramadi, Anbar Husaiba, Jubba, Thar Thar, Anbar- 8 destroyed Kudila, Ninewa – 3 destroyed Hamrin, Salahaddin – 2 destroyed	46	16
Feb 7	Albu Shajal, Jeraishi, west of Ramadi, Anbar – 7 destroyed Mukashifa, Salahaddin – 1 destroyed
Totals	5 -  70 destroyed	64	18
Feb 8	Garma, Anbar – 2 destroyed
Feb 9
Feb 10	Huzairan, Kirkuk Awasel, Anbar – 3 destroyed	2	6
Feb 11	Kubaisa & Wafaa, Anbar – 5 destroyed
Feb 12	Garma, Anbar – 1 destroyed
Feb 13
Feb 14
Totals	1 – 11 Destroyed	2	6
Feb 15	70 Kilo, Anbar – 2 destroyed
Feb 16	Gwar & Rwala, Ninewa – 2 destroyed
Feb 17
Feb 18	Saqlawiya, Anbar – 4 destroyed
Feb 19
Feb 20	Amiriya Fallujah, Anbar Amiriya Fallujah, Anbar – 4 destroyed	13
Feb 21	35 Kilo & south of Fallujah, Anbar – 7 destroyed
Totals	1 – 19 Destroyed	13	-

SOURCES

Adel, Loaa, "Amiriyat Fallujah: 8 people killed, wounded by mistake in aerial bombardment," Iraqi News, 2/20/16

- "Anbar Operations foil ISIS attack on Amiriyat Fallujah," Iraqi News, 2/20/16

- “Tribal conflict renewed armed clashes north of Basra,” Iraqi News, 2/16/16

Agence France Presse, "UN says abducted employee was murdered in Iraq," 2/16/16

Ahulul Bayt News Agency, "40 ISIS militants including suicide bombers killed in Baiji, Iraq, " 2/21/16

Arango, Tim, “3 Americans Kidnapped in Baghdad Are Released,” New York Times, 2/16/16

Bas News, "Iraqi Jet Accidentally Hits residential Building," 2/21/16

- "Peshmerga Forces Repel Two IS Offensives near Mosul," 2/17/16

Buratha News, "Cleared vital area north of Fallujah, killing dozens of Daash terrorists," 2/15/16

Al Maalomah, "Security forward thwart Daash attack with suicide car bombs in attack on southern Fallujah," 2/21/16

Al Mada, “Daash faces a revolution in Hit and have first collision with tribes in Fallujah,” 2/18/16

- "Thwart suicide attack targeting security forces with four car bombs north of Fallujah," 2/18/16

Mamoun, Abdelhak, "17 ISIS militants killed in cleansing battles in northern Ramadi," Iraqi News, 2/21/16

- "Joint forces begin military operation to free Karmat Fallujah," Iraqi News, 2/15/16

- "Security forces advance into Karmat Fallujah, kill dozens of ISIS fighters," Iraqi News, 2/19/16

Al Masalah, "Repel a Daash attack west of Ramadi," 2/15/16

Morris, Loveday, “With Islamic State under pressure, Iraqi forces hope to reclaim city of Hit,” Washington Post, 2/19/16

NINA, "Dozens Of Terrorists Killed East Of Ramadi," 2/16/16

Sarhan, Amre, "Anbar Operations announces liberating Hamediyah east of Ramadi," Iraqi News, 2/19/16

Xinua, "Iraqi security forces gain ground near Ramadi," 2/20/16