What it means for a European nation and member of NATO to declare war against a stateless band of terrorists is an interesting and important question, made urgent by Islamic State’s brutal attack on Paris on Nov. 13. As Europe and the West weigh their military and political responses, however, they should also avail themselves of a simpler strategy: Follow the money.
Raising cash, it turns out, is something Islamic State excels at. It pulls in up to $10 million a month from oil smuggling. It has profitable side businesses in ransoming hostages, selling sex slaves and looting antiquities. And it specializes in shaking down locals for protection money and taxes.
There are some hopeful signs. The U.S. military is bombing the group’s oil fields in eastern Syria and belatedly demolishing its smuggling trucks, which will hurt its bottom line. Many of Islamic State’s financial supporters have been hit with sanctions. International efforts to investigate and cut off its cash — such as the Counter-ISIL Finance Group — are also making some progress.
But other steps would help. Countries should stop paying ransoms to Islamic State, for one thing, and encourage insurers to do the same. Intelligence agencies should better coordinate their investigations of the middlemen who facilitate its oil sales. Banks and auction houses must be more alert to cutting off trade in pilfered antiquities. Neighboring countries — notably Turkey — still need to do more to stop the flow of illicit money and goods through Iraq and Syria. And Iraq’s central bank must crack down on financial firms that funnel U.S. dollars to Islamic State and its associates.