Category Archives: Russia

Financial Structure of ISIS and a Phone App

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Follow the money, we know where it comes from and where it goes. Islamic State uses the same mafia model, theft, extortion, payment for protection, winning the hearts and minds and then a phone app. Personally I had a gut feeling that there was a Russian component and well, there is…

This also creates a couple of extra issues. Will anyone challenge Russia to stop the app technology and is the West willing to compete with ISIS financially, meaning more than $2 million per day?

ISIS Finances Are Strong

By SARAH ALMUKHTAR

The Islamic State has revenue and assets that are more than enough to cover its current expenses despite expectations that airstrikes and falling oil prices would hurt the group’s finances, according to analysts at RAND Corporation, a nonprofit that researches public policy.

ISIS Relies on Extortion and Taxation

The Islamic State takes in more than $1 million per day in extortion and taxation. Salaries of Iraqi government employees are taxed up to 50 percent, adding up to at least $300 million last year; companies may have their contracts and revenue taxed up to 20 percent. As other revenue streams have stalled, like banks and oil, the Islamic State has adjusted these rates to make taxation a larger portion of its income.

ISIS’ estimated assets as of the fall of Mosul in June 2014

$875 mil.

ISIS’ estimated major revenue sources in 2014

$600 mil.

Extortion and taxation in Iraq

$500 mil.

Stolen from state-owned banks in Iraq

$100 mil.

Oil

Kidnapping ransoms

$20 mil.

ISIS’ estimated assets as of the fall of Mosul in June 2014

$875 mil.

ISIS’ estimated major revenue sources in 2014

$600 mil.

Extortion and taxation in Iraq

$500 mil.

Stolen from state-owned banks in Iraq

$100 mil.

Oil

Kidnapping ransoms

$20 mil.

ISIS’ estimated assets as of

the fall of Mosul in June 2014

$875 mil.

ISIS’ estimated major

revenue sources in 2014

Extortion and taxation in Iraq

$600 mil.

Stolen from state-owned banks in Iraq

$500 mil.

Oil

$100 mil.

Kidnapping ransoms

$20 mil.

Oil Is Not the Main Source of Cash

The Islamic State’s oil infrastructure, especially refineries, has been targeted by the United States-led airstrikes. Oil revenue has fallen to about $2 million per week, but the group is not dependent on oil income. Much of the production is used for its own fuel. Past oil sales show that the Islamic State was already selling oil at deep discounts that fluctuated between local markets — for instance, selling oil for less in Kirkuk than in Mosul.

Smoke is seen rising from the Baiji oil refinery on April 18, 2015, during ongoing clashes for control.

A U.S. airstrike on the Islamic State-controlled Mayadin modular oil refinery in Syria on Sept. 24, 2014.
The New York Times|Sources: NASA/USGS Landsat, U.S. Central Command

ISIS Invests in People, Not Infrastructure

The largest expenditure is salaries, which is estimated to be between $3 million and $10 million every month. The Islamic State also invests in police-state institutions, such as committees, media, courts, and market regulation, but provides relatively few services. The group avoids investment in infrastructure because it can be an easy target for attacks, and the territory it holds can change quickly.

Islamic State fighters stand guard at a checkpoint in in the northern Iraqi city of Mosul. Reuters

ISIS Keeps Its Costs Low

The group minimizes costs by looting military equipment, appropriating land and infrastructure, and paying relatively low salaries. The group also limits its vulnerability by shifting operations, transitioning between expanding its territory and fueling terrorist activity. The Islamic State’s loss of ground in Tikrit last month, for example, has not stopped it from launching attacks in other parts of Iraq and Syria and taking the Iraqi city of Ramadi this weekend.

Islamic State fighters march in the Syrian city of Raqqa in an image posted on a militant website on Jan. 14, 2014. Uncredited/Militant Website, via Associated Press

Now for that phone app…

IS Militants Use Popular Russian Web Payment System To Raise Cash

A  group of Islamic State (IS) militants from Russia’s North Caucasus region are using the popular Russian QIWI wallet electronic payment system to raise money online.

The group’s use of the QIWI wallet sheds light on how individual factions within IS carry out their own fundraising and outreach, and shows that this particular group has managed to raise cash openly using mainstream resources in Russia even though Moscow has banned IS and donating money to it illegal.

The militants involved in the fundraising are doing so through an unofficial Russian-language IS media activist group, ShamToday, which mostly comprises people from the North Caucasus who are with IS in Syria and Iraq.

ShamToday is closely associated with the Chechen-led IS fighting faction Katibat al-Aqsa, a group known to have been close to IS’s military commander in Syria, Umar al-Shishani.

A key ShamToday figure, a Chechen militant named Ilyas Deniev, was killed last month in clashes in Baiji in Iraq.

Another figure associated with the group is a prominent social media activist who goes by the name Murad Atajev. It is thought that Atajev, who maintains accounts on Facebook and VKontakte, operates out of Turkey.

ShamToday first emerged in 2013 on Russia’s VKontakte social-networking website, where the group initially had its own dedicated page. Since VKontakte banned its page several months ago as part of a crackdown on pro-IS propaganda, ShamToday has shifted to using a number of different VKontakte accounts and specific hashtags to spread its propaganda, a method used by other IS groups on various social-media platforms.

Unlike other IS media groups, ShamToday has not been involved in producing video propaganda.

Instead, its main activities are recruitment and outreach to IS sympathizers in the Russian Federation, mostly by spreading news about IS’s activities in Syria and Iraq, sharing Russian audio recordings of lectures given by IS preachers and ideologues, and organizing online pro-IS seminars via its dedicated channel on Zello, a social-media app that is widely used by IS to broadcast sermons.

ShamToday’s Zello sermons frequently involve IS’s most prominent North Caucasus ideologues, including a Chechen named Musa Abu Yusuf Shishani, who has previously called on Chechens in Europe to carry out attacks against civilians, and Abu Jihad, an ethnic Karachai who is a close confidant of Umar al-Shishani.

Raising Funds For The ‘Caliphate’

A recent advertisement published by ShamToday includes a request for donations via the QIWI wallet system.

The request for donations does not say what the money will be used for but uses an interesting call to action to persuade supporters in Russia and Central Asia to donate: the Koran’s Surat al-Tawbah, which instructs Muslims to “fight against the disbelievers collectively as they fight against you collectively.”

The donation request also includes an advertisement for two of ShamToday’s Zello channels, including one named Novosti Khalifata (“Caliphate News”) which the group uses to spread information about IS’s advances in Syria and Iraq to a Russian-speaking audience.

Other Russian-speaking militants associated with IS are also using QIWI accounts to fundraise. A post on the “Official Page KHILAFA” account on VKontakte, which posts news about IS in Syria and Iraq, also includes a QIWI account number and requests for donations.

Why Use QIWI?

Ironically, the ShamToday militants prefer to use QIWI for the same reason as millions of security-conscious Russians: the service allows people to transfer money electronically without having to transmit sensitive bank account information, and without having to have a bank account in the first place.

IS sympathizers who want to donate to ShamToday can do so at a dedicated QIWI kiosk (Russia had over 169,000 of these in 2013) or via their smartphone, by transferring money from their own QIWI account to the ShamToday account number, provided by the group on its donation request.

Besides Russia, QIWI is also available to consumers in Kazakhstan, Tajikistan, and Kyrgyzstan. QIWI users in these countries even make transfers abroad, including to Turkey, where the ShamToday account is most likely based.

The account number provided by ShamToday is a Russian mobile-phone number, which is most likely an untraceable anonymous SIM card and not a working number belonging to a member of ShamToday. Attempts to reach the phone number produced an automated message that said the phone was switched off or outside its provider’s coverage area.

Combating Terror Financing

The use of electronic payment systems like QIWI by banned groups is not new.

Russian lawmakers have taken steps to try to quash the use of electronic payment systems like QIWI for terrorist financing.

In January 2014, a group of lawmakers from Russia’s United Russia party (including Shamsail Saraliev, the former External Affairs Minister for the Chechen Republic) and the far-right Liberal Democratic Party of Russia put forward amendments to existing electronic payment legislation, as part of a counterterrorism package.

The proposed amendments initially called for banning all anonymous transfers over 5,000 rubles, a move that caused QIWI stock to plummet 19 percent on January 15, 2014.

However, when the final version of the amended law passed on May 5, 2014, anonymous payments under 15,000 rubles were retained, although the legislation did ban anonymous payments of any size if they were between individuals rather than companies or other organizations.

The open use of QIWI by ShamToday suggests that this legislation has not deterred some extremist groups from using the electronic payment system to raise funds in Russia.

In a response to an inquiry by RFE/RL about the use of its services by ShamToday, QIWI said that it “condemns and does not support terrorist, extremist and other illegal activities” and that it was operating in “strict compliance with applicable legislation including legislation to combat money laundering of criminal funds and terror financing.”

“The company is taking all necessary and applicable legal measures to protect its services from penetration by criminal proceeds and also to minimize the risk of the company being involved in the laundering of proceeds from criminal activities and terrorist financing,” QIWI said in an e-mail.

Kerry’s Groveling Continues

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There is not a single State Department mission or a White House global challenge that does not require cooperation, check that, the groveling by Kerry to Iran or Russia. Diplomacy in 140 characters or less. Cant make this up.

Please Iran, we need an agreement to sign with the P5+1 on the nuclear program and we will allow Iranian hostilities to continue in Iraq, Lebanon, Libya, Syria and Yemen. Kerry has proven to ignore the hegemony of Iran in all corners of the globe and the historical terrorism at the hands of the Ayatollahs. Then enter Russia, where Putin and Lavrov agree to cooperate but there are never any breakthroughs unless Putin’s demands are met and his own aggressions are ignored as witnessed by Crimea and Ukraine. A side note, 6100 people have been killed in Ukraine since Putin occupied the eastern region there.

So, in a rather quick trip to meet with Russian leadership, some clandestine agenda items are in the near future. Twitter is the communication platform of choice, at least for John Kerry. Sheesh…

There the readout of the meeting was ‘frank’ face to face talk. What? Putin is former KGB, frank talk? Hardly.

Ties between Moscow and Washington were shredded when Russia seized the southern Ukrainian peninsula of Crimea in early 2014 and allegedly buttressed separatists in eastern Ukraine.

Kerry visited Sochi after Obama snubbed Russia’s huge military parade to commemorate Soviet victory over Nazi Germany last week, in what was seen as punishment over Russia’s meddling in Ukraine.

Earlier in the day, Kerry and Lavrov laid wreaths at a World War II memorial to pay tribute to the Soviet dead.

On the balmy shores of the Black Sea, the top US diplomat’s Russian hosts also treated Kerry to locally made sparkling wine, according to Putin’s aides, while Lavrov gave his counterpart two baskets of potatoes and tomatoes.

Kerry-Putin Talks Could Deliver a Global Surprise

At 8:12 a.m. last Tuesday, Secretary of State Kerry Tweeted from Sochi, the Black Sea resort, with this mind-blower: “Had frank discussions with President #Putin & FM #Lavrov on key issues including #IranTalks, #Syria, #Ukraine.”

In 140 characters and a photograph, Kerry may have described the biggest thing he’ll get done as President Obama’s top diplomat. It’s early days and anything can happen between Washington and Moscow—as Kerry just demonstrated—but if this turn toward cordiality and cooperation holds, the consequences will refract like neutrons all over the planet.

And there’s nothing in any of the potential outcomes not to like.

As Kerry’s Tweet made plain, the Obama administration’s motivations in this demarche go to three immediate issues—two key to stability in the Middle East and one that has made the phrase “Cold War II” common currency in the past year and a half. Analysts of all stripes are unanimous: Washington has now concluded that there’s no resolving any of these questions without Moscow’s help.

That’s sound thinking except that it’s late by at least a year. One thing above all others prompted Obama and Kerry to get smart quick: These guys have a year and a half to leave a legacy of any value on the foreign side, and there’s not much other than failure in the hopper at the moment.

In Syria, the administration should have come to wiser conclusions in September 2013, when Sergei Lavrov, the Russian foreign minister, saved Obama’s bacon by persuading Damascus to give up its chemical weapons inventories. Remember Obama’s foolish “red line” gambit? Lavrov threw the life jacket.

Kerry has said since mid-March that he wants new talks toward a political settlement in Syria, and Moscow is essential in making this happen. In this, the administration is straight out of Churchill: “You can always count on the Americans to do the right thing—after they’ve tried everything else.”

It’s something of the same on the pending nuclear deal with Iran—which was the No. 1 topic in Sochi. It was Lavrov who got Tehran to consider, if not yet agree, to ship its stockpile of enriched uranium to Russia and re-import supplies as needed for peaceful purposes. With two and a half months before the deadline for this deal, Washington needs all five negotiating partners—Russia above all, I’d say—to keep their oars in the water.

As to Ukraine, its economy deserves emergency status, even if you read next to nothing in the news reports. Absent the kind of debt write-down the European Union refuses to grant the Greeks, Lawrence Summers argued in the Financial Times over the weekend, default is now a serious option.

Equally, Kiev has done little to address the terms agreed in Minsk last February, which included new constitutional provisions granting rebellious eastern regions greater autonomy. With Europeans increasingly impatient and Russia not even close to stepping back, Kerry’s assistant secretary for European affairs, the controversial Victoria Nuland, was in Kiev two days after Kerry’s Sochi sit-down to confer on implementing the Minsk II agreement, of which Russia is a primary signatory.

Small wonder Kerry spent seven hours in back-to-back talks—three with Lavrov and four with President Putin. It was his first visit to Russia in two years, and these the objects of his attention—cooperation getting the Syria crisis under control, the final stitching on the Iran deal, and a settlement in Ukraine that—it’s finally clear in Washington—cannot be achieved other than via a negotiated compromise based on Minsk II.

It’s a full agenda, but stop there and you don’t get the half of it. Look at the other factors that sent Kerry to Putin’s Black Sea resort residence:

• It has been clear for months that Washington’s assertive stance toward Russia has been a source of increasing trans-Atlantic tensions. The very real risk of a lasting rift in U.S.-E.U. ties can now be alleviated.

• European leaders are due to meet next month to consider the status of the U.S.-led sanctions regime, and at least six nations are on the record saying they’ve had enough. When Kerry hinted after the Sochi sessions that it could be time to step back, he opened a path away from an embarrassing display of disunity, if not mutiny.

• E.U-Russian relations can begin to mend, too. This is especially key on the economic side. The virtual freeze of banking operations, a drastic slowdown in investment flows, and Russia’s countersanctions against E.U. exports have all hurt the eurozone just as it struggles to recover from seven years of financial and economic crisis.

• Tensions within the E.U., heated of late, also stand to abate. Greece has been the most evident problem in this regard, as the Syriza government draws closer to Moscow in plainly purposeful defiance of the Brussels consensus. But Greece, we should note, is not alone in harboring these sympathies.

Russian officials close to the Kremlin, to the perplexity of many Western analysts, have been advancing a worst-is-over line for several weeks. Putin added his voice when he met Angela Merkel, the German chancellor, just before the Sochi talks.

Indeed, sanctions may have backfired in certain respects. While Moscow announced a 1.9 percent drop in 1Q GDP Friday, it was less than expected, and Russia’s industry seems to have been energized. It reminds me of Rhodesia before it became Zimbabwe, when international sanctions forced a not-unimpressive manufacturing sector into being: If you can’t bring it in, make it.

The ruble, meantime, has come back so strongly this year that Moscow started buying $100 million to $200 million in foreign exchange daily last week to hold it down.

Those hours in Sochi, let’s say, were long due, wherever you sit and however you look at it. Now to watch what comes of them.

Mapping Russian Aggressions

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Assad needs friends, where Iran and Russia are ready to help the Syrian regime. But there is the NATO component, where Russia is threatening more. Where is the White House? Where is the State Department? Where are the ambassadors or the National Security Council?

The Islamic State jihadist group has added to the pressure by attacking government-held areas in central Syria. Its most recent attack was on ancient Palmyra. 

HEZBOLLAH FIGHTS IN NEW AREAS

Noting that “the situation is trending less favorably for the regime”, a top U.S. military officer said on May 8 he would look to the negotiating table if he were in Assad’s shoes.

Yet the setbacks do not appear to have forced a change in strategy on the part of Assad or his most important allies, Iran and Russia.

TBILISI, Georgia (AP) — About 600 U.S. and Georgian troops are conducting joint exercises aimed at training the armed forces of the former Soviet republic for participation in the NATO Response Force.

Col. Michael Foster, commander of the U.S. 173rd Airborne Brigade, said the exercises are “an absolutely unique opportunity for us” and “the way we are going to be fighting in the future.”

Georgia has aspirations of joining NATO and contributed troops to the NATO-led military operations in Iraq and Afghanistan. List of Russian military incursions.

Image result for map suspected russian military incursions uk telegraph

Mapped: Just how many incursions into Nato airspace has Russian military made?

The number of Russian military flights probing Nato airspace has increased. In this map, the Telegraph maps the latest provocative operations, click on a submarine or plane to find out more information

RAF Typhoons were scrambled to intercept two Russian long-range bombers off northern Scotland on Wednesday, in the latest in a series of provocative operations by the country’s air force.

 

As tensions between Nato and Russia have worsened over the Ukraine crisis, Moscow has significantly increased the number of military flights probing Nato airspace – and submarine activity probing its waters.

The number of interceptions over the Baltic States trebled last year and Nato members including Britain have stepped up air policing support in the area.

Russia’s TU-95 Bear bombers – strategic bombers capable of carrying nuclear weapons – make probing flights towards UK airspace about once a month.

The Ministry of Defence says the Russian bombers have never violated Britain’s sovereign airspace, which extends 12 nautical miles from the coast, and publicly regards them as more of a routine nuisance than a threat.

But defence officials have expressed mounting concern over the nature of the flights. Michael Fallon, the then-defence secretary, said the appearance of Bear bombers over the Channel in February marked the first time they had been seen in that area “since the height of the Cold War.”

“We had to scramble jets very quickly to see them off,” he said.

Foreign Media Readout of Obama Failed Summit

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When foreign media, one from Qatar and the other from the United Kingdom provide readouts of Obama’s Gulf State summit at Camp David explaining nicely that it failed, one must worry even more.

Obama’s White House protocol office made a huge gaffe at the front end of the summit by getting a name and history wrong. Then he returned each night to the White House, leaving his invited guests to their own devices. Not only did topics like Iran and Iran get some verbal gymnastics but the matter of Syria and Russia did too. The whole charade boiled down to let us just keep channels open.

For Barack Obama, a sitting president to be so concerned, that it keeps him up at night about those dying and suffering, when he touts his special energies to human rights, his real indifference is on both sleeves for all to see that are watching.

The White House, his national security council, this connections to the United Nations and his jet-setter, John Kerry have no mission statement, no objective, no strategy and no final goal except to pass the burning of the globe on to the next administration. The death toll rises, he is cool with that, and that will frame his 8 year White House legacy.

The Guardian view on the UN talks on Syria: a waiting game while the country burns

In part:

What is going on is the classic diplomatic exercise of keeping channels of communication open in a confused situation in the hope that, as and when it changes, there will be some expertise and engagement available if new opportunities arise. De Mistura’s tactics also represent a recognition that, if there were ever a time when the Syrian war could be tackled on its own, that time has passed. It was always part of the larger regional contest between Iran and the Sunni states led by Saudi Arabia, a contest which in turn was deeply influenced by the difficult relationship between the United States and Iran, by the rise of jihadism, and by the standoff between the west and Russia.

Now all these dimensions are changing. Secretary of state John Kerry’s consultations with Vladimir Putin last week suggest a softening of US and Russian differences over Syria. Meanwhile, at Camp David, President Obama tried to allay the fears of Gulf states that Iran will exploit a nuclear agreement to become the region’s strongest power. It is indeed an open question whether Iran will become a satisfied power, interested in extricating itself from Syria and resting content with its enhanced influence in Iraq, or not. The US will both cooperate with Iran and oppose it, Obama has implied – cooperate in Iraq and parts of Syria, but oppose in other parts and in Yemen. It is a formula that must be very perplexing even to its authors. The new Saudi king, Salman bin Abdulaziz Al Saud, meanwhile, has thrown down a gauntlet in Yemen, and is propping up the Sisi regime in Egypt financially while Egypt is choosing sides in Libya. The verdict on this new Saudi forward policy has yet to be reached.

And a word or two from al Jazeera:

Another forgettable summit

The just-concluded Camp David summit promises little more than running in place.

In part:

In contrast, the just-concluded summit promises little more than running in place. For its part, Washington explained its intention to move forward with Iran on a nuclear deal while insisting that it did not portend a US pivot away from its traditional Arab friends. Arabs were and remain sceptical, and justifiably so.

Obama himself explained: “I want to be very clear. The purpose of security cooperation [with the GCC] is not to perpetuate any long-term confrontation with Iran or even to marginalise Iran.”

US initiatives

Saudi misgivings about the choices made by US presidents have a long pedigree. The kingdom has been on the losing end of US initiatives in the region for decades. Washington has proven more than willing to take advantage of Arab weakness – US Palestine policy holds pride of place in this regard.

Of equal if not greater strategic import, however, is the toxic legacy of the US’ destruction of Baghdad’s Sunni military and political leadership, offering Iran a strategic entree into Iraq it has not enjoyed for centuries.

”I do not believe it is in the United States’ interests, or the interest of the region, or the world’s interest, to [attack Iraq],” Crown Prince Abdullah told ABC News shortly before Vice President Dick Cheney’s arrival in March 2002. ”And I don’t believe it will achieve the desired result.”

Cheney dismissed Saudi concerns that war would destabilise the region. That is indeed what Bush wanted – a revolutionary break with the past out of which a new Middle East would be forged.

Not Drawing Another Red Line on Syria

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Syria Is Using Chemical Weapons Again, Rescue Workers Say

BEIRUT, LEBANON:  Eyes watering, struggling to breathe, Abd al-Mouin, 22, dragged his nephews from a house reeking of noxious fumes, then briefly blacked out. Even fresh air, he recalled, was “burning my lungs.”

The chaos unfolded in the Syrian town of Sarmeen one night this spring, as walkie-talkies warned of helicopters flying from a nearby army base, a signal for residents to take cover. Soon, residents said, there were sounds of aircraft, a smell of bleach and gasping victims streaming to a clinic.

Two years after President Bashar Assad agreed to dismantle Syria’s chemical weapons stockpile, there is mounting evidence that his government is flouting international law to drop jerry-built chlorine bombs on insurgent-held areas. Lately, the pace of the bombardments in contested areas like Idlib province has picked up, rescue workers say, as government forces have faced new threats from insurgents.

The Security Council did condemn the use of chlorine as a weapon in Syria, in February. But with Russia, the Syrian government’s most powerful ally, wielding a veto, there was no Council agreement to assign blame.

The Organization for the Prohibition of Chemical Weapons, which monitors agreements on toxic arms, found that chlorine had been used “systematically and repeatedly” in three Syrian villages in 2014, and mentioned witness accounts of helicopter-borne chlorine bombs in its report. But it, too, lacked authorization to say who used them.

 

Obama said he did not use military action on Syria with regard to his original red-line on chemical weapons is due to the fact that Assad gave up his weapons. Those stockpiles have been eliminated and now he is disputing whether chlorine is prohibited and if the international community says those must be eliminated then he will reach out to Russia to put a stop to it.

Last week, others in Obama’s administration called for an immediate U.N. investigation into the “abhorrent acts” – without saying what, if any, punishment Assad might face if formally blamed for the string of alleged chlorine gas attacks.

One western U.N. diplomat told Fox News the situation has become “unacceptable” in Syria.

“There is mounting evidence of repeated chlorine attacks,” the diplomat said.

Civilians, including children, allegedly have been injured and killed in the latest attacks. In a letter sent last week to the U.N. Security Council from the National Coalition of Syrian Revolution and Opposition Forces, the group cited reports of chlorine gas attacks in the Idlib and Hama areas and urged the creation of a no-fly zone to protect the Syrian people.

“In the past two weeks alone, witnesses and medics on the ground in Idlib and Hama governorates reported at least nine separate instances of toxic chemical attacks — several of them deadly,” the group wrote. “… in each instance, barrel bombs loaded with poisonous chemical substances were deployed from Syrian regime helicopters.”

The U.S. has submitted a preliminary draft Security Council resolution that aims to set up a mechanism for determining who is to blame and to hold them accountable.

A U.S. official told Fox News the Security Council is overdue in addressing “the need to determine who is responsible” for the attacks. “Doing so is critical to getting justice for the Syrian people,” he said.