ISIS Earned at Least $20 Million from Kidnapping This Year

According to US Treasury Under Secretary David Cohen, the biggest source of money  for ISIS comes from smuggling oil. “Our best understanding is that ISIL, since about mid-June, has earned approximately $1 million a day through the sale of smuggled oil,” he said at a White House briefing,.

“We are looking very carefully at who the middlemen are who are involved in the sale of the oil that ISIL is smuggling,” he added. The U.S. has also launched airstrikes against several small oil refineries that the group has captured.

So far this year, the Islamic State has earned $20 million through kidnapping people and ransoming them. That adds up to another $2 million or so each month this year.

Kidnapping in the Middle East terror zones is nothing new. Cohen said earlier in 2012 at Chatham House, London, England:

The U.S. government estimates that terrorist organizations have collected approximately $120 million in ransom payments over the past eight years.

AQIM, the al-Qa’ida affiliate that has likely profited most from kidnapping for ransom, has collected tens of millions of dollars through KFR operations since 2008.  It raised significant funds from kidnapping for ransom operations in early 2012, and was holding nine hostages as of the middle of last month.

For its part, AQAP has collected millions of dollars through kidnapping operations since 2009, and was holding two hostages as of this past August.

And kidnapping for ransom is not confined to these al-Qa’ida affiliate

Tehrik-e Taliban Pakistan has raised several million dollars in ransoms in recent years.  And the Philippines-based Abu Sayyaf Group, which relies primarily on criminal activity for its funding, has obtained more than $2 million in ransom payments since 2008.

What’s worse, the size of the average ransom payment is increasing.  In 2010, the average ransom payment per hostage to AQIM was $4.5 million; in 2011, that figure was $5.4 million.

It is therefore not surprising that the size of ransom demands appears to be increasing, too, with AQIM reportedly demanding £70 million for the release of four French citizens taken hostage in Niger in September 2010.

Such demands may also be evolving beyond ransoms to protection money.  One al-Qa’ida affiliate was planning to extort substantial annual payments, amounting to millions of euros a year, from a European-based company, in exchange for a promise not to target that company’s interests in Africa.

-RW