Special to WorldTribune.com
Islamic State of Iraq and Levant (ISIL) is making up to $25 million per month by gaming Mideast foreign exchange markets.
The ISIL scheme takes advantage of the hawala system, which is an honor system in Middle East exchanges that operates outside of traditional banking.
According to forex analyst David Butter, a policy fellow at Chatham House, the terror organization takes Iraqi dinars from civil servant pension funds held in banks in Mosul, a city under ISIL’s control, transfers those funds to Jordanian banks, routes them back into Iraq through the former ISIL-held city of Ramadi, and then “back into the Baghdad system” via the hawala system.
“So when the Iraqi Government does its regular foreign currency auctions, the ISIL money is inserted into that system and they can make a margin on the differences between the various exchange rates there and send it back into their areas through hawala operatives. This is the way money moves in the Middle East,” said Butter.
“The Iraqi central bank foreign currency auction systems are an area that needs to be investigated strongly,” said Butter, who added that “credible estimates” show that ISIL is able to bring in $20 to $25 million a month through the forex scheme.