The U.S. and Russia will ask the U.N. Security Council on Friday to add the self-proclaimed Islamic State to a resolution aimed at choking off al Qaeda’s financing.
The “historic” meeting will be the first to include finance ministers and led by U.S. Treasury Secretary Jacob Lew, said Adam Szubin, director of the U.S. economic sanctions programs and nominee to be Treasury under secretary for terrorism.
“The goal of the meeting is to bolster our international efforts to get at ISIL’s sources of revenue, to isolate them from the international financial system and to counter financing of terrorism, more broadly, even beyond ISIL,” said Szubin, using the administration’s preferred acronym for the Sunni terrorist group.
In addition to allowing nations to sanction individuals, businesses and governments that associate with the Islamic State, the joint proposal would add a provision asking the international community to “fully criminalize the financing of terrorism and terrorist fighters for any purpose, even in the absence of a link to a specific terrorist act,” Szubin said on Wednesday.
“And further, we’re going to be calling on countries to expand and intensify information sharing, both across governments, within governments and with the private sector,” he added.
The partnership with Russia in proffering the resolution is “a reflection of the unity of purpose that we see here,” Szubin said. The U.S. has vocally opposed Russia’s military involvement in Syria and its support for Syrian dictator Bashar Assad, and has led international sanctions against Russia for its aggression toward Ukraine.
Szubin said tracking and sanctioning the Islamic State’s money is harder compared to other terrorist groups, such as al Qaeda, because the former group is more self-contained.
Given that militants actually control chunks of Iraq and Syria, they have a built-in revenue stream from the land and inhabitants they terrorize, Szubin said. As part of being a governing “caliphate,” they can “tax” and extort money from those under their thumb, he said.
That’s also a weakness for the radical Islamic group, he said. “ISIL requires large and steady streams of income to pay salaries, procure weapons, maintain infrastructure and a semblance of governance; and ISIL needs access to the international financial system,” he said.
“They need to be able to move money, whether that’s with respect to importing oil infrastructure … whether it’s with respect to procuring weapons or communications equipment, or whether it’s with respect to moving money to their offshore affiliates,” he said.
“We’ve targeted both ISIL’s ability to generate funds and its ability to use and transfer funds through the international financial system,” he said.
The U.S. government has not found that legitimate financial institutions wittingly help the group that beheads captives and institutionalizes rape as a governing tactic, Szubin said.
“We do not see that financial institutions are receptive to ISIL money flows,” he said. “It’s about finding those flows; and that’s where we need to” collaborate.
To that end, the information-sharing provision that the U.S. and Russia are proposing to add to the resolution is key, Szubin said.
“It’s about when banks see a suspicious transaction, are they flagging that for financial authorities?” he asked “And if they are, and that system is working well, is that information then accessible to law enforcement and can it be married with travel data, can be married with intelligence data so that we can have the best possible chance of disrupting the next attack?”
Even though following their money trail is difficult, it is not impossible, Szubin said of the zealots who run the “caliphate.”
“But ISIL does need access to the international financial system,” he said. “It likes to present itself to the world as being self-reliant; and it isn’t. And as they’re trying to move money, including to affiliates … those are potential vulnerabilities for us to be able to track funds and to be able to disrupt the funds.”
The White House sent Szubin to explain the proposal to reporters partly because he is the expert, but also to underscore the administration’s drumbeat that Senate Republicans need to confirm him as under secretary.
