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Countering Terrorist Financing

ICSR is engaged in an extensive research project aimed at identifying the licit and illicit means by which terrorist organisations finance themselves. This research stream is the result of a partnership between ICSR and EY.

The data gathered under this initiative is intended to inform public and private sector efforts to counter terrorist financing worldwide.

As part of this research stream, ICSR released a ground-breaking report in October 2016 that challenged long-held assumptions about jihadist recruitment and financing. Our team discovered that criminal and terrorist groups are now recruiting from the same pool of people in Europe, creating (often unintended) synergies and connections. This is what we call the new crime-terror nexus.

We found that up to 40 per cent of recent terrorist plots in Europe were partly or fully financed by low-level crime, especially drug-dealing, theft, the sale of counterfeit goods, and loan fraud. These findings have profound implications for efforts to detect and disrupt terrorist plots on the continent.

Another goal of this project is to establish how hybrid terrorist/insurgent groups exploit territory for strategic and financial benefit. As part of this research, ICSR and EY carried out the first systematic attempt to identify and quantify Islamic State’s sources of revenue.

Our team found that Islamic State is highly reliant on constant territorial expansion – which delivers new resources to seize and exploit – due to its rapid rate of spending on administration, infrastructure, and warfare. Now that its expansion has been stopped and reversed, these revenue streams have largely dried up. Our findings dispute much of the publicly available information on the group’s finances, which has been contradictory and vague, and identifies tangible successes achieved by the anti-Islamic State international coalition.


Policy Reports

  • ‘Caliphate in Decline: An Estimate of Islamic State’s Financial Fortunes’ (London: ICSR, 2017) (Peter Neumann, Rajan Basra, John Holland McCowan, and Stefan Heißner); available here.
  • ‘Criminal Pasts, Terrorist Futures: European Jihadists and the New Crime-Terror Nexus’ (London: ICSR, 2016) (Peter Neumann, Rajan Basra, and Claudia Brunner); available here.