ISIS facilitators in Syria and Turkey sanctioned by the United States

What happened: The US Treasury Department sanctioned On Monday, three people and a company for connecting the Islamic State of Iraq and al-Sham (ISIS) to a network of international donors and allowing the group access to the Middle East’s financial system.

Why this is important: ISIS continues to exploit formal financial systems despite the loss of its territory in Iraq and Syria, the Treasury said. The group generated income through extortion of local businesses, kidnappings and looting, transfer funds internationally through Money Service Businesses (MSBs) such as hawalas, couriers and financial facilitation networks in third countries, according to the Treasury.

A Treasury-sanctioned company has ties to other companies and individuals that were not listed, Kharon found. The latest designation shows how ISIS has relied on ESMs and shell companies in Turkey and across the Middle East to hide its transactions. Department said in a statement. The United States and its Gulf partners have sanctioned in recent years various MSB and other financial networks found supporting ISIS.

“The United States and other members of the Counter ISIS financial group remain committed to depriving ISIS of the revenue it needs to carry out its terrorist and criminal activities, as well as preventing the group’s resurgence,” said State Secretary Antony Blinken.

Financial facilitators: Al-Fay Company, which is entered in the Turkish register under the name Alfay Construction Tourism Foreign Trade Industry Limited Company, was used by his manager, Idris Ali Awad al-Fay to facilitate the global distribution of currency on behalf of ISIS, said the Treasury. In addition to money services, Al-Fay companies are involved in real estate sales, airline rentals and reservations, according to a review of its social media by Kharon. Al-Fay Money Transfer also serves as an agent for a large US-based MSB, according to social media ads.

Idris al-Fay, detained in Iraq, previously held leadership positions in Al-Qaida and ISIS as bailiff and emir, according to the Treasury. He also used the company as an intermediary between foreign donors and ISIS, including operatives located in a camp for internally displaced people in northeastern Syria, said the Treasury.

Ibrahim Ali Awad Al-Fay, Idris’s brother, manages the practice in his absence, said the Treasury. The brothers appropriated funds from international sources through a network of exchange bureaus and hawalas, giving them the ability to send funds to elements of ISIS in Iraq and Syria, according to the Treasury.

Idris Al-Fay founded the company in 2018, and he co-owns it with two Turkish nationals, according to Turkish company records. In 2019, the two Turkish nationals held minority stakes in the company; al-Fay held a 50% stake until he transferred 20% of the company to a new shareholder in June 2019, according to Turkish records.

Meanwhile, Alaa Khanfurah’s Turkey-based MSB transferred funds to ISIS operatives in Syria in 2019 and 2020, partly thanks to the direct financial links he had with the group’s financial facilitators, according to the Treasury. Khanfurah was sanctioned, but the MSB was not appointed by the Treasury.

Khanfurah sent thousands of dollars to an ISIS financial facilitator, as well as indirect money transfers from people who worked for him; previously, he was a key intermediary to facilitate transfers between senior ISIS leaders, said the Treasury.

A “ clandestine ” insurrection: ISIS maintains a “largely underground presence” in Iraq and Syria, carry out a sustained insurgency straddling the border between the two countries which reaches the territories that ISIS once held under the banner of its so-called caliphate, United Nations investigators said in a report released in February. ISIS is estimated to keep a total of around 10,000 active fighters in Iraq and Syria, benefiting from limited support from pockets of the local population who have grievances against the authorities, according to the UN report.

Analysts from the Counterterrorism / Middle East team contributed to this report.