Finance ministers from the 15 Security Council nations will adopt a plan today aimed at disrupting revenue that the Islamic State extremist group gets from oil and antiquities sales, ransom payments and other criminal activities.
The Islamic State group, also known as ISIL and Daesh, is already subject to UN sanctions under resolutions dealing with al-Qaida.
The proposed Security Council resolution, sponsored by the United States and Russia, elevates IS to the same level as al-Qaida, reflecting its growing threat and split from the terror network behind the 9/11 attacks.
US Ambassador Samantha Power called the meeting an unprecedented chance to bring together the people with the technical abilities to starve the Islamic State group of resources.
The Islamic State group controls a large swath of Syria and Iraq, including oil and gas fields, though bombing campaigns by the US-led coalition and ground forces have enabled Iraq to regain some territory.
Adam Szubin, the acting US Treasury undersecretary for terrorism and financial intelligence, said getting at the group's revenue is a serious challenge because much of its money comes from oil and gas sales within territories it controls that have the potential to generate hundreds of millions of dollars annually, as well as from taxation and extortion.
This is in contrast to al-Qaida, whose funding typically comes only from kidnappings for ransom and from outside donors, including charities, he said at a White House briefing yesterday.
"The good news is ISIL has a number of vulnerabilities as well," Szubin said. "They are fighting a multi-front war at the same time that they are trying to provide governance, provide assistance to overseas affiliates, and trying to build this reputation of a supposedly Islamic caliphate."
He stressed that IS needs access to the international financial system for oil equipment, weapons, communications equipment and other imported items which requires them to move funds ideally leaving a "money trail" that can be disrupted.
The Islamic State group is also earning some money from oil and gas sales outside its territory, the sale of antiquities to foreign buyers and ransom payments.
UN Secretary General Ban Ki-moon told the Council at the
start of the debate that terrorists have been far too successful in attaining resources for their heinous acts.
"As Da'esh (ISIS) and other terrorist groups disseminate their hateful propaganda and ratchet up murderous attacks, we must join forces to prevent them from acquiring and deploying resources to do further harm," he stressed.
"We know the challenge before us. Terrorists take advantage of weaknesses in financial and regulatory regimes to raise funds. They circumvent formal channels to avoid detection, and exploit new technologies and tools to transfer resources.
They have forged destructive and very profitable links with drug and criminal syndicates - among others. And they abuse charitable causes to trick individuals to contribute," the UN chief said.
He noted that progress has been made over the years in identifying and limiting various methods of terrorist financing, with Member States ratifying the International Convention on the Suppression of the Financing of Terrorism and adopting legislation to criminalize terrorist financing and strengthen regulatory systems.
"Still, more needs to be done," Ban said.
"Terrorists continue to adapt their tactics and diversify their funding sources. Today, Da'esh runs a multi-million dollar economy in territories under its control.
Da'esh terrorists raise money through the oil trade, extortion, undetected cash couriers, kidnapping for ransom, trafficking of humans and arms and racketeering," he said.
"They loot and sell precious cultural property, shamelessly profiting from the destruction of humanity's common heritage. Social media outreach is exploited by Da'esh, not just for radicalisation and recruiting, but also for fundraising. Other terrorist organisations around the world - from Boko Haram to Al-Shabaab to the Taliban - are following suit."
With terrorists increasingly employing elusive tricks to raise and transfer funds, covering their tracks and leaving little evidence to identify tainted resources, the international community must stay ahead of the curve to combat their ploys, he said, noting that many States have yet to set up the necessary legal regimes and institutions to identify and freeze terrorist assets.
Ban called for increased international cooperation in sharing information and expertise, especially in stopping the illegal trade of cultural artefacts, and closer cooperation with the private and charitable sectors to identify suspected transactions.
