One Step Ahead: Daesh Abuses Global Finance Using Easy Local Rules

© REUTERS / Dado RuvicIslamic State flag is seen in this picture illustration taken February 18, 2016
Islamic State flag is seen in this picture illustration taken February 18, 2016 - Sputnik International
No, Daesh does not make $33,602.15 per hour gaming forex markets thanks to one easy trick, but the group's abuse of the existing international financial system has left it able to effectively ignore UN Security Council sanctions.

Although rumours of the Daesh terrorist group making millions from timely foreign exchange transactions appear to be unsubstantiated, poor banking system controls in Iraq and Jordan have allowed the group to operate despite official bans, terrorist finance analyst Christine Duhaime told Radio Sputnik.

Chatham House associate fellow David Butter previously told a UK Parliamentary panel that Daesh makes as much as $25 million per month through currency trading in Iraq. This does not appear to be true, according to Duhaime, although Daesh has made it more difficult to track its finances because the group began planning its financial operations before its activities became a major issue.

"The thing we've known but don't talk about for some reason is that [Daesh] uses banks, they definitely sued our banking system, they've wired money in and out, and in fact, in the territory where they are is a bank that is effectively controlled by them," Duhaime told Radio Sputnik.

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Iraq has already banned 142 exchange houses in order to prevent Daesh transactions, but the measure may not be enough, according to Duhaime. In the Middle East's banking system, many exchanges are made in cash and countries including Turkey and Jordan maintain loose anti-terrorist financing regulations.

In addition, Daesh is said to be printing counterfeit passports, which would give the group additional abilities to continue financing its activities even if a strict "Know Your Customer" regime is enforced, according to Duhaime.

Dhuhaime also pointed to Iran as a successful example of a Middle Eastern country that is fully implementing measures to prevent the financing of terrorist groups, with every new account monitored by the country's central bank in a highly centralized system.

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