CYIL vol. 8 (2017)

JELENA DINIC CYIL 8 ȍ2017Ȏ the need to prepare their activities deep underground, far from the public eye and intelligence services, use the process of money laundering with the ultimate goal of hiding the purpose for which the money will be used. The epicenter of the financial system and the safe deposit of ISIL money is located in the northern Iraqi city of Mosul, while its regional budgets are managed at the local level, in accordance with the needs of the province. 20 Most of the budget is allocated for the salaries of soldiers, the level of which depends on the number of persons within the martyr’s families who depend on his income, the geographical location of fighting and their nationality. The Islamic State of Iraq and the Levant annually spends about one million dollars on ammunition and ordnance, while it spends an allocation of tens of millions of dollars for the secret police, religious police and other soldiers in charge of intelligence activities. 21 Multi- millions of dollars are set aside for advertising activity. In addition to printed advertising materials, special attention is paid to the high-level production of videos and propaganda. Control of the banking system is an important element of ISIL finances. After the conquest of Mosul in June 2014, ISIL took control of the Central Bank and more than one hundred branches of private and state banks. 22 It is important to mention that the major role of the Hawala system is that it allows the terrorists of ISIL to transfer money without administrative traces and thus in a very short period of time provide cash funds for the execution of terrorist attacks. The mentioned money transfer system is based on trust, discretion and the absence of physical evidence of the transfer of money performed, which makes this system extremely favorable to the financial “gymnastics” of terrorists. Mechanisms of “ISIL” money laundering The modalities of the money laundering of ISIL depend on the utilization functions of the money that needs to be washed. 23 Organizations with a charitable (humanitarian) character and exchange offices are usually used for the purpose of money laundering and concealment of the same purposes for the needs of ISIL. 24 Exchange offices in Jordan and Turkey (particularly in the vicinity of Istanbul’s Grand Bazaar) have become an important link in the money transfers to the territory controlled by ISIL and from those territories on to the countries where jihadists are preparing terrorist attacks. Based on the report of the US State Department, Turkey’s economic expansion and geographic proximity to Syria and Iraq are conducive to the development of illegal flows of money, because of the possibility of money transfers through the porous and poorly controlled border with Syria. 25 The aforementioned report states that ISIL terrorists transfer money in cash through the Turkish-Syrian border, buying valuable cars, gold and real estate, stressing the need for stronger supervision of the non-governmental sector, which is often used as a cover for money laundering. The Turkish 20 “ ISIS Financing ” (Center for the Analysis of Terrorism. 2016) p. 18. 21 Ibid. 22 Ibid. 23 COKER, Margaret, How Islamic State’secret banking network prospers [2016]. http://www.wsj.com/articles/how- islamic-states-secret-banking-network-prospers-1456332138 Accessed 01 July 2016. 24 Ibid. 25 U.S. says Turkey must do more to stop Islamic State oil trade [2016] http://ekurd.net/us-turkey-stop-islamic-oil- trade-2016-03-03 Accessed 05 July 2016. 6.

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