U.S. Treasury says Turkey still logistical hub for ISIS financing

The Islamic State (ISIS) continues to rely on “logistical hubs” inside Turkey for its finances, the U.S. Treasury said in a report this month.

ISIS “often gathered and sent funds to intermediaries in Turkey who smuggle the cash into Syria or send the funds to hawalas operating in the camp”, the Treasury said.

Ankara’s commitment to combatting ISIS has been a point of discussion for some time. While Turkish officials claim that Turkey has done more than any other country to combat the threat posed by the group, many observers disagree. "ISIS continued to use money services businesses, including hawalas, to move funds in and out of Iraq and Syria, often relying on logistical hubs in Turkey and in other financial centers," the report said in the most recent assessment of the ISIS finances.

When the United States launched a raid into Syria’s northwestern Idlib province to assassinate ISIS leader Abu Bakr al-Baghdadi in October 2019, the newly appointed National Security Council's Middle East and North Africa coordinator Brett McGurk wrote an op-ed for the Washington Post, pointing out that al-Baghdadi’s hideout was near a large Turkish military post, and that Ankara had “some explaining to do”. Former President Donald Trump thanked the Syrian Kurds “for certain support they were able to give” in that same operation.

The Kurdish-dominated Syrian Democratic Forces (SDF) have been praised for their efforts to eradicate ISIS. Meanwhile, Turkish forces have been fighting against the SDF in northern Syria since 2016.

ISIS “probably has as much as $100 million available in cash reserves dispersed across the region,” wrote Audit Director Gregory Sullivan in the Treasury's report, published on Jan. 4. However, he added, the U.S. government didn’t know the amount of money ISIS distributed.

Ambassador McGurk, during a televised interview in January 2019, said U.S. officials spent most of their time in Ankara, because “most of the material coming to fuel the ISIS machine, frankly, was coming from across the border from Turkey into Syria … It was very frustrating because Turkey didn't take much action on the border.”

The Treasury also indicated that ISIS supporters increasingly used cryptocurrencies, while still relying on “traditional methods of transferring funds into Iraq and Syria. ISIS members in Iraq transferred funds to ISIS members in northeastern Syria, including in Internally Displaced Persons camps, such as al-Hawl”.

The report was submitted in response to inquiries from the U.S. Department of Defence’s Lead Inspector General. It said ISIS continued to raise funds through extortion of oil smuggling networks in eastern Syria, kidnapping for ransom, targeting civilian businesses and populations, looting, and possibly the operation of front companies. ISIS also continued to use networks of couriers to smuggle cash between Iraq and Syria, the Treasury said.

Thomas Joscelyn of the Foundation for Defense of Democracies wrote about the Treasury's report this week. He also spoke of U.S efforts to combat the Taliban in Afghanistan and how the Trump administration sold a Feb. 29, 2020, agreement with the group as a victory for America’s counterterrorism efforts. Despite supposed assurances that the Taliban would break with al Qaeda, however, the Treasury Department’s analysts found that the two remained closely allied, he said.

The report said that al Qaeda had been “gaining strength in Afghanistan while continuing to operate with the Taliban under the Taliban’s protection” in 2020.