Reuters Insider - Treasury's Cohen: ISIL's wealth gain at unprecedented pace

Hurriyet Gazetecilik ve Matbaacilik

28/10/2014 07:35

Click the following link to watch video:                              
 https://insider.thomsonreuters.com/link.html?cn=share&cid=1318452&shareToken=MzowNDdmODRjNS01MTRhLTRmM2YtYTE4Ny1mN2RlMzFiZmQ5MmM%3D&playerName=ReutersNews 
                                                                       
 Source:             Thomson Reuters                                   
                                                                       
 Description:        Treasury's Under Secretary for Terrorism and      
                     Financial Intelligence David Cohen talks about    
                     U.S. strategy to undermine ISIL's financial       
                     foundation at Carnegie Endowment for Int'l Peace. 
 
 
(To access all exclusive Reuters Insider programming visit: http://insider.thomsonreuters.com) 
 
 Short Link:  http://reut.rs/1FIrDTc  
 
 
Transcript (May be auto-generated)

 -shutting down the flow of money to ISIL from outside sources and through 
smuggling networks running through neighboring countries. It has been estimated 
that ISIL currently produces over 50,000 barrels of oil per day, which one sold 
on the black market can provide between $1 million and $2 million per day of 
revenue. This money is in addition to the funds the group collects from 
activities such as extortion, kidnapping, and illegal surcharges. It should be 
no surprise that ISIL is now considered the wealthiest and most financially 
sophisticated terrorist organization. To discuss the US strategy to try to cut 
off these funds, we are honored to have David Cohen with us today. Mr. Cohen is 
the Undersecretary for Terrorism and Financial Intelligence at the Treasury 
Department where he leads the department in enforcing, reinforcement, regulatory
and intelligence functions aimed at identifying and disrupting financial support
to international terrorist organizations and other illicit actors posing a 
threat to national security. He will discuss the terrorist financing challenge 
posed by ISIL, the group's sources of revenue and the measures the Treasury 
Department and other US agencies are taking to address the threat. Following his
remarks, we will open the floor for questions from the audience. For those who 
want to join the conversation online, we will be live tweeting this event using 
the #disruptingISIL, one word. So please join me in welcoming Treasury 
Undersecretary David Cohen. Good morning. Thank you, Dr. Muasher for that kind 
introduction and to the Carnegie Endowment for hosting me here today. It's truly
an honor to have the opportunity to lend my voice to the ongoing dialogue 
fostered by Carnegie and its Middle East Studies program. Before I begin my 
remarks, I'd like to take a moment to note our sympathy and prayers are with the
people of Canada during this difficult time. We are still working on gathering 
all the information about the attacks yesterday and are working very extensively
with our Canadian counterparts. This is a tragic reminder of the need to remain 
vigilant in the face of terror. As President Obama has made clear to Prime 
Minister Harper, that our friends in Ottawa will have whatever support they need
from our national security teams here in the United States. I come this morning 
to discuss an especially pernicious expression of the endemic problem of violent
extremism, the terrorist group known as the Islamic State in Iraq and the 
Levant. In particular, I will describe the U.S. and international effort my team
at the Treasury Department is leading to undermine ISIL's financial strength, as
part of the comprehensive strategy to disrupt, degrade and ultimately defeat 
ISIL. Let me begin by briefly reviewing why we are so focused on ISIL. ISIL 
terrorists have slaughtered thousands of innocent people who did not subscribe 
to their warped ideology. 

They have persecuted religious minorities and threatened genocide. They enslave 
and rape women and girls. They have brutally murdered aid workers and 
journalists who had traveled to Syria just to bring a small measure of relief to
the Syrian people or to tell their story. And the vast majority of their victims
are Muslims, Sunni and Shia alike. As it sows chaos in communities across Iraq 
and Syria, ISIL threatens core U.S. interests. It threatens American personnel 
and facilities in Iraq. It threatens our regional allies, including Turkey, 
Jordan, and Lebanon, who are already strained by the ripple effects of the 
crisis in Syria. And because it is attracting so many foreign fighters, 
destabilizing an entire region, and securing a safe haven, ISIL, if left 
unchecked, could ultimately pose a direct threat to citizens of the United 
States and our allies outside of the Middle East. Put simply, a terrorist 
organization with territorial ambitions and a stated desire to kill innocent 
people abroad must be confronted. That is why, under the leadership of President
Obama, the international community has come together to stop this threat. The 
President has tapped General John Allen as Special Envoy to spearhead the 
establishment of a broad coalition – now some 60 partners strong, ranging from
the Middle East to Europe and beyond – behind a strategy to degrade ISIL's 
capabilities, roll back its recent gains, and ultimately defeat it. ISIL has 
grabbed the world's attention for its outlandish ambitions and astounding 
brutality, but also for another reason: its substantial wealth. ISIL's primary 
funding tactics enable it today to generate tens of millions of dollars per 
month. Those tactics include the sale of stolen oil, the ransoming of kidnap 
victims, theft and extortion from the people it currently dominates, and, to a 
lesser extent, donations from supporters outside of Syria and Iraq. So as part 
of the United States' broader strategy to degrade and defeat ISIL – a plan 
that includes a systemic campaign of air strikes; providing additional support 
for the Iraqi military and the moderate Syrian opposition; delivering 
desperately needed humanitarian assistance; taking measures to stem the flow of 
foreign fighters into and out Syria and Iraq; and contesting ISIL's twisted 
narrative – we at the Treasury Department are intensifying our focus on 
undermining ISIL's finances. This is a whole-of-government effort, and while we 
take the lead on the financial component of the strategy, we are working closely
with our counterparts in the State Department, the Department of Defense, law 
enforcement, and the intelligence community. And we are also linked up with 
international counterparts. Indeed, just last Friday, we hosted a meeting with 
the State Department that brought together over 20 countries and organizations 
to identify measures to financially isolate and undermine ISIL, as well as 
al-Nusrah Front and the illegitimate Assad regime. As with the rest of the 
campaign against ISIL, our efforts to combat its financing will take time. We 
have no silver bullet, no secret weapon to empty ISIL's coffers overnight. This 
will be a sustained fight, and we are in the early stages. But one thing is 
certain: so long as ISIL terrorizes the people of Iraq and Syria, imperils the 
broader Middle East, and threatens U.S. interests overseas and at home, we will 
remain committed to degrading its financial strength. In 2004, the office I lead
in the Treasury Department was created and charged with developing and deploying
financial tools to combat terrorist financing, reflecting the recognition that 
one way to forestall terrorist attacks is to deprive terrorist organizations of 
money. Through the application of powerful national and international sanctions,
close cooperation with foreign partners and the private sector, and enhancements
to international financial transparency, we have made it harder than ever for 
terrorist groups to raise, move, store, and use funds. In many respects, our 
campaign against ISIL's financial foundation will build on our work over the 
past ten years, and closely resemble our previous campaigns. But to some extent,
ISIL poses a different terrorist financing challenge. It has amassed wealth at 
an unprecedented pace, and its revenue sources have a different composition from
those of many other terrorist organizations. Unlike, for instance, core 
al-Qaeda, ISIL derives a relatively small share of its funds from deep-pocket 
donors, and thus does not, today, depend principally on moving money across 
international borders. Instead, ISIL obtains the vast majority of its revenues 
through local criminal and terrorist activities. So, just as ISIL relies in part
on new models to fund itself, we too are adapting our tools and techniques to 
combat ISIL's financial activities. Before turning to the specific steps we are 
taking, let me take a moment to detail these sources of revenue. First, ISIL has
raised a significant amount of its money – many millions of dollars – from 
selling oil it extracts from fields in Syria and Iraq. Our best understanding is
that ISIL has tapped into a long-standing and deeply rooted black market 
connecting traders in and around the area. After extracting the oil, ISIL sells 
it to smugglers who, in turn, transport the oil outside of ISIL's strongholds. 
These smugglers move oil in a variety of ways, from relatively sizeable tankers 
to smaller containers. We also understand that ISIL controls oil refineries of 
various sizes and output capacities, and earns some revenue from the sale of 
refined petroleum products. So who, ultimately, is buying this oil? According to
our information, as of last month, ISIL was selling oil at substantially 
discounted prices to a variety of middlemen, including some from Turkey, who 
then transported the oil to be resold. It also appears that some of the oil 
emanating from territory where ISIL operates has been sold to Kurds in Iraq, and
then resold into Turkey. And in a further indication of the Assad regime's 
depravity, it seems the Syrian government has made an arrangement to purchase 
oil from ISIL. It is difficult to get precise revenue estimates on the value to 
ISIL of these transactions in light of the murky nature of the market, but we 
estimate that beginning in mid-June, ISIL has earned approximately $1 million a 
day from oil sales. There are good indications, however, that recent coalition 
military efforts have begun to impair ISIL's ability to generate revenue from 
oil smuggling. Airstrikes on ISIL oil refineries are threatening ISIL's supply 
networks and depriving it of fuel to sell or use itself. Moreover, our partners 
in the region, including Turkey and the Kurdistan Regional Government, are 
committed to preventing ISIL-derived oil from crossing their borders. Last week,
the International Energy Agency reported that ISIL's ability to produce, refine 
and smuggle oil had been significantly hampered. Second, ISIL also kidnaps 
innocent civilians to profit from ransoms paid to obtain their release. ISIL did
not pioneer kidnapping for ransom – it has been around for thousands of years.
And other terrorist organizations, including al Qaeda's affiliates in Yemen and 
north Africa, also rely on ransom payments as a key revenue source. As I have 
said before, kidnapping for ransom is one of the most significant terrorist 
financing threats today. For ISIL, these ransom payments are irregular, but each
one can be a significant boon. This spring, ISIL released captured journalists 
and other hostages from several European countries. In return, according to 
press reports, ISIL received several multi-million dollar payments. All in all, 
ISIL has taken at least $20 million in ransoms this year. Third, like its 
predecessor, al Qaeda in Iraq, ISIL raises money – up to several million 
dollars per month – through a sophisticated extortion racket. In Iraq and 
Syria, ISIL extracts payments from those who pass through, conduct business in, 
or simply seek to live in the territory where it operates. In the Iraqi city of 
Mosul, for instance, accounts have surfaced of ISIL terrorists going 
home-to-home, business-to-business, demanding cash at gunpoint. A grocery store 
owner who refused to pay was warned with a bomb outside his shop. Others who 
have not paid have seen their relatives kidnapped. Religious minorities have 
been forced to pay special tributes. We've also seen reports that when customers
make cash withdrawals from local banks where ISIL operates, ISIL has demanded as
much as 10% of the value. Make no mistake: This is not taxation in return for 
services or even for real protection. It is theft, pure and simple. The money 
ISIL pilfers is being exchanged not for a guarantee of safety but for the 
temporary absence of harm. Fourth, ISIL also profits from a range of other 
criminal activities. They rob banks. They lay waste to thousands of years of 
civilization in Iraq and Syria by looting and selling antiquities. 

They steal livestock and crops from farmers. And despicably, they sell abducted 
girls and women as sex slaves. Finally, as I mentioned earlier, ISIL derives 
some funding from wealthy donors. Even though ISIL currently does not rely 
heavily on external donor networks, it maintains important links to financiers 
in the Gulf, as a spate of Treasury designations last month made clear. ISIL's 
revenue streams are, to be sure, diverse and deep. With the important exception 
of some state-sponsored terrorist organizations, ISIL is probably the 
best-funded terrorist organization we have confronted. Nonetheless, 
understanding that this effort will take time, dedication, and broad 
collaboration, we are well-positioned to degrade ISIL's financial strength. Our 
strategy involves three mutually supportive elements. First, we are working to 
disrupt ISIL's revenue streams in order to deny it money in the first place. 
Second, we aim to limit what ISIL can do with the funds it collects by 
restricting its access to the international financial system. And finally, we 
will continue to impose sanctions on ISIL's senior leadership and financial 
facilitators to disrupt their ability to operate. Let me elaborate. The first 
element of our strategy is working to cut off ISIL's main sources of funding, in
particular its revenue from oil sales, ransom payments, extortion and crime, and
support from foreign donors. To disrupt the market in oil derived from 
ISIL-controlled fields, we will target for financial sanctions anyone who trades
in ISIL's stolen oil. It is true, of course, that ISIL's oil moves in illicit 
networks that are largely outside the formal economy, where individuals are less
vulnerable to financial pressure. But at some point, that oil is acquired by 
someone who operates in the legitimate economy and who makes use of the 
financial system. He has a bank account. His business may be financed, his 
trucks may be insured, his facilities may be licensed. All that makes ISIL oil 
facilitators vulnerable. The middlemen, traders, refiners, transport companies, 
and anyone else that handles ISIL's oil should know that we are hard at work 
identifying them, and that we have tools at hand to stop them. We not only can 
cut them off from the U.S. financial system and freeze their assets, but we can 
also make it very difficult for them to find a bank anywhere that will touch 
their money or process their transactions. In combating ISIL's fundraising 
through oil sales, we will leverage the well-established reluctance of banks 
around the world to facilitate the financing of terrorism. Beyond financial 
sanctions, we are working closely with others in the U.S. government to enhance 
the ability of our partners in the region to choke off cross-border oil 
smuggling routes and to identify those involved in the smuggling networks. The 
Turkish and Iraqi Kurdish authorities have both made commitments to combat 
whatever oil smuggling occurs in their territory. And, of course, as I mentioned
earlier, our military colleagues are playing a significant role in degrading 
this source of funding through airstrikes on oil-related targets. Next, to 
prevent ISIL from raising funds through ransoms, we are redoubling our efforts 
to translate the emerging international consensus against the payment of ransoms
to terrorist groups into a more widely adopted practice. It has been U.S. policy
for many years to refuse the payment of ransoms or make other concessions to 
hostage-takers. This policy rests on the sound premise – confirmed by 
experience – that an explicit and consistently applied no-concessions policy 
reduces the frequency of kidnappings by eliminating the underlying incentive to 
take hostages in the first place. In the context of hostage-taking by 
terrorists, this policy has even greater force. We know that terrorist 
organizations – ISIL included – use ransom money to fund the full range of 
their violent activities. Refusing to pay ransoms to terrorists, therefore, not 
only makes it less likely that Americans will be taken hostage, but it also 
deprives terrorists of funding critical to their deadly aspirations and 
operations. We maintain this policy not because we are cold-hearted. To the 
contrary, at the President's direction, we use all of our military, 
intelligence, law enforcement, and diplomatic capabilities to secure the release
of American hostages. The attempt made this summer by U.S. forces to rescue 
hostages being held by ISIL reflects this commitment. But, very simply, if we 
are to protect our citizens and avoid bankrolling our adversary, every country 
must adopt and implement a no-ransoms policy. This norm is beginning to take 
shape. Last year, the G-8 unequivocally rejected the payment of ransoms to 
terrorists, and this year, members of the UN Security Council have twice adopted
resolutions reaffirming their shared commitment to seek the safe release of 
hostages without making monetary or political concessions. Going forward, as we 
seek to prevent kidnappings from occurring and remain dedicated to freeing those
taken, we will continue to urge partner nations to subscribe to a no-ransoms 
policy. At the same time, we will look to use our counter-terrorism sanctions 
authorities against those who demand or receive ransoms on behalf of terrorist 
organizations. We are also concerned about external donor networks. To prevent 
ISIL from raising funds from donors abroad, we will continue to identify its 
financial supporters and target them for sanctions. We have long focused on 
disrupting the funding networks of ISIL and its predecessor AQI. In fact, we 
have applied sanctions against more than two dozen individuals associated with 
AQI or ISIL over the past 10 or so years. And we will continue to target those 
who would exploit the suffering of innocent people in Syria and Iraq to raise 
money for their extremist agendas, whether in support of ISIL or any other 
terrorist group. In the months ahead, we plan to accelerate our efforts to 
identify targets for sanctions and take actions against them through our 
counter-terrorism authorities. In September, President Obama led the United 
Nations Security Council in unanimously passing a binding resolution to stem the
flow of foreign terrorist fighters into – and out of – Iraq and Syria. 
Security Council Resolution 2178 aims specifically to prevent and suppress the 
flow of foreign fighters and money to ISIL and al-Nusrah Front, and we are 
working with others to implement it swiftly. And we are working especially 
closely with our friends in the Gulf – who are stalwart partners in the 
anti-ISIL coalition – to ensure that they all have the tools in place to 
combat terrorist financing and that they all use those tools effectively. We 
appreciate the close collaboration and strong steps taken by the Emiratis and 
the Saudis to combat ISIL financing. Even though ISIL does not currently rely 
heavily on the traditional donor model for terrorist financing, that is no 
reason to relax our efforts in this area. Particularly as we make progress in 
disrupting ISIL's current sources of income, and as ISIL gains additional 
prominence in the global terrorist movement, we must be prepared for the 
possibility that wealthy extremists will increasingly seek to fund it. As for 
disrupting the revenue that ISIL generates from extortion and other local 
criminal activities, we recognize that Treasury's tools are not particularly 
well-suited to the task. We can and we will identify and designate the 
individuals who oversee ISIL's extortion networks, calling attention to those 
who are brutalizing the people of Iraq and Syria. But our experience combating 
AQI's extortion networks, which ISIL mimics, drives home the point that shutting
down the revenue flow from ISIL's extortion networks ultimately will require 
breaking its hold on territory. Other lines of effort in the anti-ISIL coalition
are focused on this crucial objective. Nonetheless, even where Treasury's 
financial tools cannot cut off certain revenue streams, we still have a crucial 
role to play, and that brings me to the second key element of our strategy. As 
we work to disrupt ISIL's sources of income, we are focused on restricting 
ISIL's access to the international financial system in order to impair its 
ability to collect funds from abroad, and to move, store, and use the funds it 
acquires locally. ISIL's ability to make the most effective use of money that it
raises depends on its access to the banking system in Syria, Iraq, and 
internationally. Operating entirely in cash is both cumbersome and risky – 
cash is bulky, vulnerable to theft, and requires complicated logistics to 
transport. Moreover, ISIL will have a hard time funding external operations, 
including facilitating the movement of foreign fighters, without access to the 
international financial system. To that end, we are working to limit ISIL's 
ability to transact through the Iraqi, Syrian, and international banking 
systems. Scores of bank branches are located in territories where ISIL operates.
Through cooperation with the Iraqi authorities, bank headquarters, and the 
international financial community, we aim to prevent ISIL from using those bank 
branches. The private sector is also playing a key role in this element of our 
strategy. Bank Secrecy Act reports filed with the Treasury by financial 
institutions provide the U.S. Government with valuable insight into financial 
activity in areas where ISIL operates. We carefully review these reports for 
indications of ISIL financing and quickly disseminate information to the 
appropriate authorities. The third element of our strategy draws on our 
time-tested approach to countering the financing of terrorism – that is, we 
will continue to dismantle ISIL's financial foundation through targeting for 
designations its leadership, supporters, and financial facilitators. Running a 
terrorist organization – especially one that, like ISIL, spans hundreds of 
miles – is both costly and bureaucratically challenging. In order to keep 
track of all its revenues and costs, ISIL depends on complex management 
networks, with CFO-like figures at the top. As we identify the individuals that 
make up those networks, we will expose and designate them. We've seen from our 
fight against al-Qaeda and other terrorist organizations that sanctioning top 
officials hampers their ability to raise and handle funds. Doing so against ISIL
will make it harder for ISIL to conduct commercial and financial activity, and 
also clearly identifies for the international community who stands behind this 
evil organization. We have already stepped up our designations of ISIL 
officials, both those based in Iraq and Syria and their financial supporters 
outside the area. Most recently, on September 24, Treasury sanctioned two 
high-profile individuals associated with ISIL – a financial facilitator who 
arranged for a $2 million donation from the Gulf, and a senior military 
commander. Both were based in Syria, soliciting donations, procuring military 
equipment, and recruiting foreign fighters to ISIL's areas. These designations 
will not, on their own, stop these individuals from operating, but they – and 
the designations to come – will frustrate ISIL's ability to attract money and 
fighters. Before concluding, I'd like to make one final point about our campaign
against ISIL's financial foundation. We should not confuse funding with 
financial strength. While ISIL today is well-funded, a terrorist group's overall
financial strength turns not just on its income, but also on its expenses and, 
importantly, the degree to which it can dedicate its resources to violent 
purposes. And in that regard, ISIL operates within certain real constraints. 
ISIL's territorial ambitions are a financial burden. Attempting to govern the 
cities, towns and sprawling territory in Iraq and Syria where it currently 
operates, much less delivering some modicum of services to the millions of 
people it seeks to subjugate, is expensive. By way of comparison only – since 
no one expects ISIL to deliver the same level of services as the legitimate 
Iraqi government – the official Iraqi budget this year for the provinces where
ISIL currently operates is well over $2 billion. That far outstrips ISIL's 
revenue, and does not include the price-tag for the territory it seeks to 
dominate in Syria. What this means is that ISIL cannot possibly meet the most 
basic needs of the people it seeks to rule. In fact, we are already seeing 
reports of water and electricity shortages in Mosul as ISIL fails to deliver. As
we make progress in diminishing ISIL's revenues and its freedom to use them, we 
will further exploit this vulnerability. The consequences of ISIL's inability to
meet the cost of governing, by the way, were articulated very well in a recent 
report by Mona Alami in Sada, Carnegie's online journal for its Middle East 
program. With time, patience, and close international cooperation, the steps I 
have outlined today will help undermine ISIL's financial foundation. I must 
stress again, however, that the campaign against ISIL's finances will require 
more than just financial tools. This is primarily because, given that ISIL is 
enriching itself locally, cutting off one key source of funds will require 
dislodging it from territory in which it operates. But more broadly, even as 
this vital military campaign progresses, we recognize that the only solutions to
the conflicts in Iraq and Syria are political in nature. The hateful ideology 
propagated by ISIL must be countered by tolerant, economically vibrant societies
and governments that rule in an inclusive manner. These are long term goals that
the United States is deeply committed to fostering. So while we work toward 
lasting solutions, Treasury will continue to deploy innovative strategies to 
disrupt ISIL's financing. Together with our partners in the U.S. government and 
across the globe, we will degrade and ultimately defeat ISIL. Thank you. Thank 
you very much, Undersecretary Cohen. 

Let me start the discussion with a couple of questions and then we'll open it up
to the audience. You just came from a trip to Qatar and Saudi Arabia. Both 
members of the Anti-ISIL coalition and both countries where individuals continue
to donate money to ISIL. What was your message to them and how do you assess the
state of fundraising in the Gulf for such organizations? That's right, I just 
last week was in Saudi Arabia and in Qatar. Look, the Gulf is enormously 
important in the anti-ISIL coalition for a whole host of reasons including the 
counterfinancing aspect of this. And I think we have made no secret over the 
years of our concerns with financing for terrorist organizations coming out of 
the Gulf. And I think we have made some significant progress in the Gulf but 
there's obviously more work to be done. I think if you go through sort of each 
critical country individually, if you look at Saudi Arabia for instance, my 
meetings there were very, very good. The Saudis are I think deeply committed to 
ensuring to the best of their ability that no money goes to ISIL or al-Qaeda on 
a loser front. They have really over the last number of years made enormous 
strides in combating terrorist financing and I'm confident are completely 
committed to insuring that ISIL is not able to raise funds in the kingdom. In 
the UAE, I think, - I didn't visit the UAE on this most recent trip but I'm a 
frequent visitor - they also are steadfastly committed to preventing funding for
ISIL from all loser fronts. We have a very good close relationship with the 
Emirates in combating terrorist financing. In fact, we have just initiated a 
bilateral terrorist financing task force with the Emirates where we're going to 
work together even more closely on combating terrorist financing. I think that's
a very positive development in what I think reflects an ongoing commitment by 
the Emirates to combat terrorist financing. With respect to Qatar and Kuwait, I 
didn't make it to Kuwait on this most recent trip although General Allen who is 
spearheading this overall effort is I think just embarking on a tour that will 
include Kuwait as well as Qatar. I have in the past noted that both Qatar and 
Kuwait are permissive jurisdictions for terrorist financing and have raised some
specific concerns with respect to all loser fronts and to some extent ISIL. And 
I think both countries have more work to do. In Qatar where I was last week, I 
had very good meetings with senior leadership where we discussed how best to 
address this problem. The Qataris, the the Amir recently promulgated a new law 
regarding charitable activity in Qatar as a way to try and ensure that the 
charitable sector is not used as a mechanism to fund terrorist organizations. 
But there are US and UN-designated terrorist financiers in Qatar that have not 
been acted against under Qatari law. As Khalifa al-Subaiy and more recently Abd 
al-Rahman al-Nu'aymi who was re-designated last December, the-UN designated I 
think in August are both residents in Qatar. With respect to Kuwait, there are 
also home to a number of US and UN-designated terrorist financiers. They also 
have the laws and institutions in place to combat terrorists financing in 
Kuwait. Now one of the things that we are particularly concerned about and two 
of the recent designees Hajaj al-Ajami and -- both were raising funds through 
social media, through Twitter appeals in particular. And they're raising funds 
not necessarily from within Kuwait but are also reaching out to others including
in Saudi Arabia to make appeals to raise funds. And so one of the areas where we
are quite concerned is ensuring that in particular, people who have been 
designated by the US and by the UN are disrupted and are unable to continue 
their fundraising activities. As I said, I think there is more work to do both 
in Qatar and Kuwait. We have been deeply engaged with both countries for a 
number of years. We have seen others make really substantial progress in 
combating terrorist financing and we're going to continue to work as closely as 
possible with our partners in the Gulf on this issue. How would you address 
critics of US policy who suggest that this is not America's fight and that it 
should be better left to countries in the region and not to the United States? 
And how do you see the campaign progressing in the months and years ahead? What 
would you look for to determine whether the statute is working or not? Well, I'd
say a couple of things. I mean first of all, this is certainly America's fight 
to some extent. I mean, as I noted, what ISIL is doing threatens core US 
interest whether it's our personnel and facilities in Iraq, in Baghdad, and in 
Erbil, or the interest of some of are very close partners in the region: Jordan,
Lebanon, Turkey. It is a very significant US interest and as well as the concern
that ISIL is attempting to create a safe haven for terrorism across that sweep 
of territory which is attracting foreign fighters. I think we have seen 
something on the order of 15,000 foreign fighters flow into the area from 80 or 
so different countries including dozens of Americans. And so it is deeply in our
interest to confront ISIL, combat ISIL, and degrade and defeat ISIL. But it's 
not our fight alone and I think the size of the anti-ISIL coalition is 60 
countries and organizations coming together to combat ISIL, 10 of which are 
involved in military strikes, I think it demonstrates that this is viewed quite 
properly as a threat to, really to many, many countries around the world. And 
then as to how we will judge the success of our particular efforts to address 
ISIL financing, as I said, this is going to be a long term effort and it's going
to involve- you know, work that the Treasury Department does in designations, in
exposing the networks, you involve work of partners in other countries, in 
Turkey and elsewhere and we're very much engaged. My deputy was in Turkey a 
couple of weeks ago, General Allen was there I think last week. We're continuing
very close communication with the Turks on these issues. And it will require an 
enhanced understanding of the funding networks that we're combating whether it's
the oil networks, other smuggling networks, external donation networks. I should
note that we're very proud of the Treasury Department that we have an in-house 
intelligence agency. We are the only finance ministry in the world that has our 
own intelligence agency. What these folks do is help us understand the financial
networks. They develop financial intelligence. It is enormously important to the
effort that the intelligence community help us understand these networks. So, to
answer your question, "How will we judge our success?," I think we will see over
time that we are degrading each of these lines of financing for ISIL. As I said,
ISIL has a fair amount of money today. What's critically important is that this 
is, we do everything we can to prevent it from being recurring revenue. One-time
revenue that we can address is one thing. We want to make sure is that as they 
have significant expenses, that they don't have a ready stream of occurring 
revenue. Let's open it up. We have about 20 minutes so we'll take questions in 
batches of three. Please keep it short and please- yes. Hi. Muna Shikaki with Al
Arabiya. Just a couple of questions. How would you assess what you've done so 
far? And also, you talked about how people in the Gulf, how some governments of 
the Gulf had new tools that you want to make sure that they know how to use? 
What are these tools and also, just the last question, you were talking about 
how some of the new- you guys have been trying to come up with novel ideas to 
combat this novel way of raising funds but really you haven't outlined anything 
new about what you're talking about. And also, just the last question, you were 
talking about how some of the new- you guys have been trying to come up with 
novel ideas to combat this novel way of raising funds, but really, you haven't 
outlined anything new about what you're talking about. You've always had 
designations, you've always had looked through other financial networks, so 
what's new about what you're doing? Okay. Yes? 

39:48-- with the National Endowment for Democracy. You laid out a great strategy
for formal sector banking, stuff like this. I just want to raise your attention 
for other two things you didn't mention: what about informal companies that they
are sitting in Turkey and there are companies sitting in Saudi Arabia or other -
I can't make 100,000 by phone telling you, give that 100,000, I'll give it to 
you 40:16 and other, that's one. Second, one thing you didn't mention, 
agriculture. You know, if you see just Iraq, 80% of the wheat and corn produced 
in Iraq - it is an ISIS area. 

And I don't know about Syria but that's a lot of money coming in. Did you look 
in these areas? There's a question from the back. Yes, the woman there, please. 
Hi. Susanna Seltzer from the International Center for Terrorism Studies. A big 
source or big method of combating ISIS has been supplying materials and weapons 
to the Syria rebels and to the Peshmerga. Shouldn't a priority be put on 
insuring these supplies do not fall into ISIL hands which would then put less 
pressure on their financial coffers? Okay. Let's start with this. Great. So how 
would I assess our progress so far? We are in the early stages of these efforts.
I think some things that we have done which I do think have been useful are the 
designations in September of some of the- both military and financial 
facilitators which builds on the work that we have been doing for a number of 
years to identify people who are related to AQI as well as ISIL. There are, as I
noted, dozens of designations. This helps and frankly was useful in my recent 
trip to the Gulf to highlight work that can be done. This is not going to be an 
exercise where we are going to, you know, at the end of every month, be able to 
produce a balance sheet that shows what ISIL finances looked like. This is going
to be a steady effort that will degrade ISIL's financing over time. The other 
area where I think we have seen, as I noted, we've seen some progress already is
not something that we've done at the Treasury Department, something that our 
colleagues at the Department of Defense and their partners have accomplished in 
terms of strikes against ISIL oil facilities and oil refineries in particular. 
That in part impedes their ability to self-refine part, but also makes it more 
difficult for them to fuel their vehicles, both their military vehicles as well 
as vehicles that may be smuggling oil. So I think those are efforts- and I 
guess, the one other- and I think this comes to your question about sort of 
what's new. We've also begun conversations with the Iraqi government and with 
other financial regulatory authorities really around the world about our 
concerns with the bank branches that are within the ISIL-controlled territory. 
It's a difficult problem because our interest is not in shutting down all 
economic activity in the areas where ISIL currently operates. They are 
subjugating huge losses of population, millions of people who are still trying 
to live their lives. And banks, as everybody knows, are important lubricants for
the economy. But at the same time, we are very concerned about ISIL's ability to
coop or coerce the bank employees into sort of using the banks as a way for them
to move money particularly internationally. And so, this is sort of - I don't 
know if it's new or if it's old but it's a new manifestation of sort of core 
Treasury competency which is working with financial counterparts both in the 
Iraqi governments and outside to do what can be done to try and prevent ISIL 
from making use of these branches. So leave at that. On the question of the 
informal means to move funds, it's absolutely right and it's something that we 
confront in all of our counter-terrorist financing efforts. On the question of 
the informal means to move funds, it's absolutely right and it's something that 
we confront in all of our counterterrorist financing efforts, is that not 
everything moves through the formal financial sector. But we also have a history
of identifying and taking action against informal financial networks. We've done
it in Afghanistan. We've done it in Pakistan. What it requires, as I've noted 
just earlier, is good intelligence on who's involved in these activities and an 
action against them. And it also requires the cooperation and collaboration with
partners in the region. 

I think the example you cited was one end of that transaction was in Saudi 
Arabia. We are, as I noted, very closely engaged with the Saudis on these 
issues. They are I think fully engaged on the efforts to combat ISIL financing. 
And we will- we'll work with partners in the region on those sorts of issues. 
Both on- both on with respect to the question on agriculture and ISIL selling 
weapons- look, the- as I said, one of the challenges here is that ISIL controls 
territory. And that means that they are able to engage in activities within the 
territory where they're currently operating, whether it's stealing crops and 
selling them or coming into weapons that have been left behind and selling them,
that's all activity that we're aware of, that there are ways to address if it 
is- particularly if it is going beyond the borders where they operate. But 
fundamentally, it's going to require pushing back ISIL from the territory where 
it operates and freeing the lands where they are as well as sort of that will 
work on the extortion networks, work on the selling of crops that they're 
stealing. Please. Hi, Rachel Oswald, CQ Roll Call. Could you please talk a 
little bit about- you said that there have been some success in your 
conversations with countries I'm guessing primarily European countries about no 
longer paying ransoms onto ISIL and other terrorist groups, Could you be more 
specific about which countries are coming around? Please. Thanks, Marwan. 

Barbara Slavin from Atlantic Council and from Al-Monitor. How do you deal with 
the fact that there are mixed motivations on the part of the members of the 
coalition with many of them putting a priority on getting rid of Bashar al-Assad
and particularly Turkey in this light, and there are many folks who seemed to 
have an ambivalence about the activities of the Islamic state? And if I could 
also throw in an Iran question, how much progress have you made in setting up 
financial channels for people who want to do legitimate business with Iran and 
will there be a blessed channel between an American and Iranian bank if we get a
comprehensive nuclear agreement? Thank you. In the back, well, okay? 

Please, sir. Sorry. Thank you. Tolga Tanis with Hurriyet. I have a quick 
question regarding this oil trade. You said that some of the oil providers from 
the territory that ISIL is controlling is sold to Kurds in Iraq and then resold 
to Turkey. Could you clarify which one- I mean, what person did you have this 
oil is crude and what person which is refined? And also, there are two ways 
where the Iraqi Kurds are transporting this oil to Turkey: one is through the 
pipeline and the second one to the trucks. And the Bartak government sees that 
oil trade as smuggling. What is your position on this issue when you said that 
you are working with the partners in the region to cut truck of cross-border oil
smuggling route? Is that including this oil truck trade made between Kurdistan 
and Turkey? In the back somewhere. Yes, sir, please. Will Mauldin with the Wall 
Street Journal. Just to follow up on the oil trade, please, you mentioned some 
fairly well-sized tanker vessels. Has the US or others identified which vessels 
are being used, what routes are they plying between which ports? And how would 
they be stopped through being arrested at the ports or the Fifth Fleet on the 
high seas? How is that particular route going to be stopped? Thank you. Okay. 
It's okay. And I'm going to try this in reverse order, just to- added fun. On 
the- just on that- on your question. Well, I didn't mean to suggest vessels in 
terms of ships. I think what we've seen are tankers- truck tankers not ship 
tankers, so just to clarify that. And then to- response to this question on the-
how the oil is moving and what the smuggling networks look like and what we're 
doing about it. And then to, I just want to respond to the question on the- how 
the oil is moving and what the smuggling networks look like and what we're doing
about it. Look, I don't have much more detail that I can provide today on the 
specific routes, the specific mechanisms than what I've already said. But I will
note this that these smuggling routes have existed for a long period of time, 
long before ISIL was active in the territory. And what may have been a 
willingness to sort of look the other way to see these sorts of, you know, not 
knowledge about the origin of the oil that these smuggling networks are using- 
and I think these smuggling networks, by the way, it's not just oil; there are 
other commodities that have for, you know, dozens, hundreds of years moved to 
these smuggling networks. But the ability of people particularly at the end of 
these networks to be unaware of the origin of the oil may have been tolerable in
a time where what was happening was just, you know, people stealing oil from the
Syrian and the Iraqi government and selling it through these networks. What's 
different is that we now know, and they now know, that this oil begins with 
ISIL, begins with a terrorist organization and that the trade in this oil 
fundamentally funds this terrorist organization. And so what may have been a 
willingness to look the other way in the past is something that I think cannot 
continue going forward. And as I said we will try to emphasize that message both
rhetorically and through actions as we identify the people who are involved in 
those networks. Now, with respect to, you know, competing objectives or 
ambivalence, or what have you, I will leave the diplomacy to the diplomats. And 
I don't sense any ambivalence whatsoever among the key partners in the 
importance of combating ISIL financing. I think even with respect to what I was 
saying on Qatar and Kuwait, neither of those countries and the officials of 
those countries are saying to me that they are indifferent to the funding of 
ISIL coming from the territories. It's quite the contrary. I think both of those
countries are aware of the problem. And actually I didn't answer the question 
about the tools, so let me come back to that which is that the Qataris have, as 
I noted, a new law regarding charities. They have long-standing legislation that
allows them to designated individuals and designated terrorist organizations as 
they're obligated to do under UN Security Council resolutions. The Kuwaitis also
have both the institutions and the legal framework to do essentially what we do 
which is to take administrative action against terrorist financiers. So those 
are the tools that are available. And as I said, I think we're going to continue
to work with both those jurisdiction so that they employ those tools as 
effectively as possible. And then, on the question about ransoms and whether 
we've had success, I do think it's notable that in the last year, year plus, 
you've had the G8 come out with very, very strong statements about the payment 
of ransoms, and then you've had two UN Security Council resolutions that, one, 
specifically focus on ransom payments and the other in the context of a foreign 
terrorist fighters also noting the importance of not paying ransoms to 
terrorists. That's a very significant declaration of adherence to a no-ransom 
policy. And then the trick is - and I know you're going to ask me this – the 
trick is translating that into practice and being committed as a matter of fact 
to a policy and approach that, as I noted, is becoming a broader international 
norm. And that requires some very hard choices to be made and recognition of the
importance of adopting a no-ransom policy as a means to protect all of our 
citizens. And as I noted in my remarks, ISIL received something in the order of 
$20 million this year in ransom payments. That means that not everybody is as 
committed to this no-ransom policy as certainly as we are, and I would note as 
the British are too who I think have, like us, long adhered to both in word and 
in practice in the no-ransom policy. So there is obviously more work to be done 
on that front also. Thank you so much. I'm afraid that's all the time we have so
please join me in thanking Undersecretary Cohen for a very timely and 
interesting presentation. And may I ask you please to stay seated until the 
Secretary is able to leave