Financial Crime World

UN: ISIS’ Economic Powerhouses Remain Strong in Post-Caliphate Iraq

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Despite being militarily defeated and officially ending its caliphate in 2019, the remnants of the Islamic State (ISIS) continue to exert significant economic influence in post-caliphate Iraq.

The Resilience of ISIS’ Financial Networks

A recent report by the Financial Action Task Force (FATF), a global anti-money laundering watchdog, highlights the resilience of ISIS’ financial networks. These networks were previously fueled by oil smuggling and illicit taxation. According to the FATF, decades-old smuggling routes that emerged during the imposition of sanctions and were extensively used following the US invasion in 2003 continue to be exploited by ISIS and other actors involved in the smuggling of oil and antiquities.

The Evolution of Criminal Networks

The report notes that these networks have evolved into sophisticated criminal organizations, using violence and intimidation to maintain their grip on the Iraqi economy. These groups are now involved in a wide range of illegal activities, including:

  • Oil smuggling
  • Antiquities trafficking
  • Drug trafficking
  • Smuggling of commodities
  • Illicit taxation

The Role of Iran-Backed Proxy Groups

In Iraq, Iran-backed proxy groups, such as Kata’ib Hezbollah (KH) and Asaib Ahl al-Haq (AAH), have been accused of using violence for political gain. While both factions have been designated terrorist organizations by the US, they have also gained legitimacy in some circles due to their involvement in fighting against ISIS.

The Complexity of the Situation

The Joint Counterterrorism Assessment Team (JCAT) has identified these groups as key players in Iraq’s organized crime scene. However, experts warn that the PMF’s actions are multifaceted and cannot be solely defined as terrorist activities. While they have been involved in violent acts aimed at generating psychological impact, they also provide essential services and security to Iraqi citizens.

Conclusion

The post-caliphate era has seen a significant shift in Iraq’s organized crime landscape, with Iran-backed groups emerging as key players in a complex web of criminal networks. As the country struggles to rebuild and recover from the devastating effects of ISIS’ rule, it is essential to understand the dynamics of organized crime in order to effectively combat its spread.

References

  • FATF (2015)
  • UN (2016)
  • Clarke et al. (2017)
  • Joint Counterterrorism Assessment Team (2017)
  • Lurie (2020)
  • Le Billon (2021)