Follow the Money: Thwarting Islamic State's Plans for a Comeback

The report suggests that the most important measures in Iraq and Syria to counter any attempted Islamic State resurgence will be domestic intelligence gathering and law enforcement. Authorities will need to identify businesses that have Islamic State investments, the locations of cash storage sites, and money exchange and transfer businesses that are cooperating with the Islamic State.

“The group has an international network of financial relationships. And even though donations have not provided a large share of Islamic State revenue, the group has raised money around the world. International cooperation will thus be needed to address these connections,” said Patrick B. Johnston, an author of the report and a senior political scientist at RAND.

It will also be important for law enforcement entities to protect affected populations in Iraq and Syria as reconstruction progresses, both in the sense of security and in ensuring that funds are not extorted. Authorities will also need to ensure that the Islamic State does not find other means of accessing reconstruction funds.

Finally, better government will help alleviate some of the problems that led to the formation of the group in the first place. This will be more difficult in Syria.

Key Findings
The Islamic State’s caliphate was never just territorial, but the group clearly desires to regain territory

·                  It was always a caliphate of the mind, a vision of an Islamic state that the modern group’s leaders imagined to have existed in history.

·                  Were it to exist in reality as its leaders envisioned, it would be a regional menace to its neighboring states and a nightmare primarily for the world’s Muslims.

·                  The group has withstood numerous challenges not only to its effectiveness but also to its very survival. It has remained a persistent threat throughout its history and various organizational incarnations — including those without unilateral control over territory.

While far less money is coming in to support its activities, the group’s operating expenses have greatly decreased

·                  With the loss of the territorial caliphate, there is no need to provide services to a populace.

·                  With a significantly lower operating budget, continued revenue-generating activities and the cash the Islamic State hoarded will provide it with adequate funds to survive as a clandestine terrorist movement with the ability to wage prolonged guerrilla warfare throughout Iraq and Syria.

As an insurgency, the group will also maintain a diversified revenue stream, including resorting to criminal activities to raise funds

·                  The group’s knack for fundraising through criminal activities will prove useful as its members seek to extort, kidnap, kill, steal, smuggle, and traffic to obtain the money they need to survive.

·                  Controlling territory would facilitate these activities but is far from a prerequisite.

Recommendations

·                  The most important measures in Iraq and Syria will be domestic intelligence gathering and law enforcement. Authorities will need to identify businesses that have Islamic State investments, the locations of cash storage sites, and money exchange and transfer businesses that are cooperating with the Islamic State.

·                  Ground operations to seize the money, although riskier than destroying caches through airstrikes, for example, would preserve the money for use by legitimate governing authorities in Iraq or Syria.

·                  The group has an international network of financial relationships. And even though donations have not provided a large share of Islamic State revenue, the group has raised money around the world. International cooperation will thus be needed to address these connections.

·                  It will also be important for law enforcement entities to protect affected populations in Iraq and Syria as reconstruction progresses, both in the sense of security and in ensuring that funds are not extorted. Authorities will also need to ensure that the Islamic State does not find other means of accessing reconstruction funds.

·                  Better government will help alleviate some of the problems that led to the formation of the group in the first place. This will be more difficult in Syria.

·                  Military action will still be required; sanctions, for instance, are unlikely to be enough.