Islamic State amassing wealth at 'unprecedented pace', says US official

David Cohen, Treasury undersecretary for terrorism and financial intelligence, said Thursday the group "poses a different terrorist financing challenge" given its revenue sources have a different composition from many other terrorist organisations.

The group's primary funding tactics include the sale of stolen oil, ransoming of kidnap victims, theft and extortion as well as donations from supporters.

"With the exception of some state-sponsored terrorist groups, ISIL is probably the best-funded terrorist organisation we have confronted," Cohen said in a speech at the Carnegie Endowment for International Peace.

Cohen said it is difficult to get precise revenue estimates on the value to IS of the transactions in light of the murky nature of the market, but the US estimates that beginning in mid-June the group has earned about US$1 million a day from black market oil sales.

Ransom payments are irregular for IS, but each can be a significant boon and the group has taken at least US$20 million in ransom this year.

Cohen said ulike the al-Qaida terrorist network, IS obtains the vast majority of its revenues through local criminal and terrorist activities, and the US Treasury Department's tools are not particularly well-suited to combating extortion and local crime.

"We are focused on restricting ISIL's access to the international financial system in order to impair its ability to collect funds from abroad and to move, store and use the funds it acquires locally," he said.

The official said tha efforts to combat IS's financing will take time as with the rest of the campaign against the group.