The Islamic State remains one of the most well-armed and well-funded terrorist groups in the world, raking in over $1 billion in revenues last year and capturing up to $50 billion in Iraqi weapons, according to a State Department security report.
"ISIL’s sophisticated military skill and brutality has been key to its success in Iraq and Syria," states an Oct. 19 report by the Overseas Security Advisory Council.
"However, its ability to generate cutting-edge propaganda to promote its ideology and gain sympathizers and members across the globe, added to its largely self-reliant, robust financial system, has contributed heavily to its success as well."
ISIL, which stands for the Islamic State of Iraq and the Levant, is an acronym for the Islamic State, as are ISIS and IS.
Russian military intervention is the latest twist in the five-year-old Syrian conflict where the Islamic State "remains a violent, capable force," the seven-page security report states.
Foreign nationals continue to join the group, spurred on by sophisticated Islamic State propaganda and recruitment efforts through some 46,000 Twitter accounts used by members and sympathizers.
"Halting the flow of foreign fighters is incredibly difficult," the report says, noting that travel bans imposed by western countries have not been effective at curbing foreign fighters from joining the group who can easily enter Syria.
The report provides a detailed breakdown of the group’s income, which comes primarily from sales of oil, extortion and ransom, seized bank assets, taxation, artifact smuggling, and agricultural theft.
Last year, the Islamic State raised $100 million from oil trafficking from seized oil facilities in Syria and Iraq. The amount is expected to decrease slightly this year because of the decline in oil prices on international markets.
U.S. airstrikes have targeted oil transportation networks, the report said, noting that Turkish government efforts to stem oil smuggling across the Turkish-Syrian border.
According to the report, the terrorist group’s revenues for 2014 included between $500 million and $800 million in seized state-owned bank assets, $20 million to $70 million from taxation of controlled territory, $100 million in oil revenues, and $25 million to $45 million from kidnapping and ransom.
Theft of agricultural products brought in between $10 million and $50 million last year, and border tariffs imposed by the group raised between $10 million and $50 million. Funds from smuggling of artifacts could not be estimated, according to the report, but private estimates have put the figure at "tens of millions."
Those figures do not include a more modest sum—up to $40 million—that the Islamic State received from foreign donors in the Persian Gulf, including financial backers in Saudi Arabia, Qatar, and Kuwait, as well as some in Europe.
The capture of equipment and weapons from Iraqi security forces, who fled and left their arms and equipment after the Islamic State attacked Iraq in 2014, includes between $20 billion and $50 billion worth of arms.
The weapons were taken after the group took over the Iraq Second Division, based in Mosul, which included a motorized brigade and several infantry brigades.
The weapons include Russian-made T-55 tanks and some M-1 Abrams tanks, along with towed artillery, armored vehicles, and troop transports.
"Since ISIL declared a caliphate in Iraq and Syria in July 2014, the group has become one of the world’s most well-financed terrorist organizations," the report said.
"Unlike other terrorist groups, ISIL is largely self-financed, and operates mainly outside of the formal financial system."
With tens of millions in its coffers, the group also must make large funding outlays, unlike most other terror groups.
"ISIL’s governance of a large swath of territory necessitates a structured, growing economy," the report said. "By targeting the group financially, its ability to support itself and those living under its rule will be heavily impacted, and its ability to operate outside Iraq and Syria may be limited over the long term."
The Islamic State has become adept at using social media, according to the report.
The group "makes heavy use of social-media platforms like Twitter to deliver the message that Sunni Muslims have a duty to either fight under the Caliphate or live under it, and to fight against Shia domination in the region," the report said.
The Islamic State is also using an Islamic "hadith," or saying attributed to Mohammed, that predicts that three armies will emerge prior to the apocalypse in Syria, Iraq, and Yemen, with the greatest army appearing in Syria.
Slick, high-quality videos and magazines also are part of its recruitment and propaganda programs.
The United Nations estimates that there are around 20,000 foreign fighters in Syria and Iraq from about 100 countries, mainly in the Middle East and North Africa.
"ISIL relies strongly on a constant stream of foreign fighters to bring with them money and technology, and to maintain the image that the group is constantly expanding," the report says.
The report concludes that the Islamic State poses an international threat of producing terrorists who can strike around the world.
"ISIL’s success on the ground, militarily but also financially and ideologically, translates into ongoing support for home-grown violent extremists who may conduct attacks in ISIL’s name," the report said.
"It also has led to the growth of ISIL-linked groups abroad, such as Sinai Peninsula in Egypt or Najd Province in Saudi Arabia."
Last month, the Treasury Department imposed sanctions on 30 people linked to Islamic State funding programs, including 15 people identified as supporters who provided technical, logistical, or financial backing.
However, blocking the outfit from using its funds to buy weapons and spare parts and supporting affiliates around the world remains difficult, according to Adam J. Szubin, the Treasury’s acting undersecretary for terrorism and financial intelligence.
"When you look at a group like ISIL compared with a group like al Qaeda, the financing challenges are night and day, given the territory that ISIL controls, and its ability to extort funds from people and its territory, and to draw on the natural resources, oil or otherwise, in the territory it controls," Szubin told the Senate Banking Committee Sept. 17. "It is a massive challenge."
The Treasury Department held a meeting of what it calls the Counter ISIL Finance Group, led by U.S., Italian, and Saudi officials and including representatives from 25 other nations, on Oct. 7.
Daniel L. Glaser, assistant secretary for terrorist financing at the Treasury Department, said in a blog post that officials at the meeting discussed the Islamic State’s financial structure and how it can be undermined.
Among the issues addressed during the meeting were cross-border illicit financial flows, oil smuggling, financial connections with affiliates, and the looting and sale of antiquities.
Western states are trying to prevent the Islamic State from using the international financial network, to counter its extortion schemes, and to cut off funding from abroad. The states are also trying to prevent IS from providing its funding and resources to affiliated groups.
The Islamic State has spread from Syria and Iraq to the Sinai Peninsula, Afghanistan, and Libya.
Glaser said he was encouraged by the counter-financing efforts and that "we will continue to use every tool available to disrupt ISIL financing and make it more difficult for ISIL to operate."
A Treasury Department spokesman did not return emails seeking comment.