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Terror Financing

Volume 604: debated on Tuesday 12 January 2016

A key strand of the strategy to defeat Daesh is to cut off its financing. A series of international agreements restricting Daesh’s income streams has come into force, including UN Security Council resolution 2170, which restricts Daesh’s trade networks and sanctions individuals who are financially supporting Daesh, and UN Security Council resolution 2253, adopted in December—it was recently agreed by all Finance Ministers, including the Chancellor—which reorientates the UN al-Qaeda sanctions regime to target Daesh.

I thank the Minister for that response, but will he outline what specific steps are being taken to undermine the flow of finance from oil sales by Daesh, which are obviously fuelling this nasty terrorist group?

The hon. Lady is right to highlight the importance of oil sales to Daesh, which account for about half of its revenues. It receives between $2.5 million and $4 million a day across all sources, but oil is very much the highest of them. Most of that is in fact sold to the Assad regime. We are making an impact—taxes in Mosul and Raqqa have been forced to go up; the salaries of the foreign fighters there have gone down; and smuggling routes are being closed off—so we are defeating Daesh using financial means.

The international convention for the suppression of the financing of terrorism has received widespread ratification across the world, but it has not been ratified by some major actors, in particular Iran and Somalia. What steps can my hon. Friend take to ensure that it is universally adopted, so that terrorist financing is shut off across the world?

My hon. and learned Friend is right to articulate the loopholes that still exist. We are hoping that Iran, which has committed itself to continued talks in the Vienna process, will make the necessary changes to ensure that the loopholes are closed.

Currency is clearly flowing out of ISIL towards Afghanistan to fund its huge operations there. As with any criminal organisation, currency will be flowing out of ISIL into foreign and western bank accounts to secure a future that it foresees. What success have we had in stemming that flow and capturing the people who are involved in the transfer of currency from ISIL as it exists as a state to wherever else it is going?

The hon. Gentleman is correct. It is not only finances that are moving out of Iraq and Syria, but people. The fighters are moving to other parts of the world to promote their extremist cause. Afghanistan is one of those places and Libya is another. We are closing in on the individuals who are providing the accounts and we now have the legislative means to close them. It will be difficult, but we need to work with those countries outside Iraq and Syria if we are to defeat extremism and close the financial channels it uses.

One hundred and eighty-seven countries have ratified the international convention for the suppression of the financing of terrorism. What confidence can we have in, and what action can we take against, any of those signatories that are dealing in some of the oil that is funding Daesh?

My hon. Friend is right to articulate that point. This is the main funding source that is keeping Daesh alive. It is able to use those funds to pay for the fighters who are causing so many of the problems in Iraq and Syria. It is hoped that the Vienna talks will lock down those countries—Iran has already been named—to ensure that they honour their commitments so that we can close down the financial channels.

Following on from the question from my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), an estimate by Associated Press at the end of October 2015 was that between 40,000 and 50,000 barrels of oil a day were being produced to finance Daesh in Iraq and Syria to the tune of $40 million a month. In the light of the agreement on terrorist financing that was reached in December, which the Minister mentioned, and the coalition military action, what is his current estimate of the finances available to Daesh?

I made it clear that there is an estimate that Daesh is receiving between $2.5 million and $4 million a day. This matter is very difficult to understand because it does not keep accounts and it certainly does not share its accounts. There is not the transparency that we would like to see from any country. We are fully aware that its main source of income is the illegal sale of oil to the Assad regime. We have closed off other avenues, but the main one is sales to the Assad regime.