How Daesh grows richer from sales of Syria's treasures

When the self-described Daesh publicly beheaded a Syrian archaeologist last week for refusing to reveal the whereabouts of hidden treasures in the ancient city of Palmyra, it was a measure of how important the illicit sale of antiquities has become to the cash-hungry and predominantly self-financed organisation.
But it was not a sign of financial desperation.
The extremist group that controls more than a third of both Syria and Iraq is awash in cash, experts in terrorist financing say.
The following all add up to bountiful Daesh coffers, they say, potentially for years to come: extortion and "taxation" of the populations it controls; illicit oil sales; ransom; seizure of bank deposits in the lands it has conquered - as much as $1 billion when it captured Mosul, Iraq, a year ago; and now the sale of small antiquities on a voracious international market.
When the Obama administration last year announced its strategy to "degrade and ultimately destroy" IS, it identified the group's finances as one of five areas the new anti-IS coalition would focus on.
But what the beheading of Khaled Al Asaad and the fresh attention it brought to illicit antiquities sales told experts is that Daesh remains adept at diversifying its financial resources - and is managing to adjust to the squeezes that the outside world has put on some of its revenue streams.
"We know from experience that Daesh is not likely to just sit there and watch itself wither on the vine. It has shown it can adapt, and it has lots of opportunities," says Matthew Levitt, a senior fellow and expert in counterterrorism and intelligence at the Washington Institute for Near East Policy.
"Antiquities is an example of that," says Levitt, who has followed the group's financing since he was a Treasury Department official a decade ago looking at the finances of Al Qaeda in Iraq, Daesh's precursor. "For a long time they were not focusing on this stuff," he adds, "and now it's become very important to them."
Indeed, the trafficking of antiquities may have become the second-most-important source of revenue for the group, according to the Congressional Research Service.
What sets Daesh apart from a terrorist group like Al Qaeda - and what is key to its becoming the wealthiest terrorist organisation in history, experts say - is its hold on large swathes of territory with revenue-producing resources (oil, agriculture) and taxable populations.
"People are baffled at how Daesh can make so much money and keep up its revenue streams, but the key is that it is not like Al Qaeda that was always on the run and dependent on deep-pocketed donors somewhere far away," says Colin Clarke, an expert in terrorist and insurgent financing at the RAND Corp. in Pittsburgh. "It's the control of territory and its resources, including people, that is really critical."
Yet as successful as Daesh has been at exploiting the financial resources of the territories it controls, experts and intelligence officials point out that all is not rosy on the extremist group's ledger sheets.
Oil revenues, once estimated at as much as $1 million a day, are down, in some cases considerably - primarily as a result of airstrikes by the anti-Daesh coalition. The United States has taken out many of the mobile oil-refining units that the group deployed to turn crude oil from seized oil fields into marketable products to sell outside its territories.
And some of the other income sources like extortion and ransom that the group has relied on in Syria and Iraq are what officials following the group's finances call "mature" - meaning that those sources are close to tapped out and cannot be relied upon long-term.
Coalition leaders are expected to take up the problem of antiquities smuggling and sales, say some officials following the coalition's actions, especially given the heightened attention to the issue. Syrian antiquities are showing up on the London antiques market with growing frequency, with individual items fetching up to $1 million, according to reports.
The US Congress is also zeroing in on the role of antiquities in replenishing Daesh coffers. Recently a bipartisan group of senators proposed legislation, modeled on a bill already passed in the House, that would give the administration the authority it needs to be able to restrict the importation of artifacts smuggled out of Syria.
The one bright spot that officials working to counter Daesh finances see is that much of the group's revenue sources within the territories it controls are not renewable. What that means, they say, is that unless Daesh is able to conquer new territories, the terrorist group's finances are likely to deteriorate.
- Christian Science Monitor