By Juan C. Zarate And Thomas M. Sanderson, New York Times

How the terrorists got rich

Terrorists raise funds locally and globally: from old-fashioned charcoal exports to control of military assets to crowdsourcing online.

AFEW feet from the Bab al-Salam border crossing near the Turkish town of Kilis, there is a shabby cafe where the most interesting items for sale are not found on the menu.

The cafe is the final stop for young radicalised men from Europe or North Africa who are planning to slip past the lax Turkish border officers and into Syrian territory.

This is where they exchange their passports for cash. When one of us visited the cafe in January, a Belgian passport was for sale for US$8,000 (S$10,000). A buyer could have it altered for movement to Europe or visa-free travel to the United States. New passport photos were being snapped in the parking lot.

Half a continent away, in Kuwait, on an evening in March, a soon-to-be-auctioned 1982 Chevy Caprice Classic sat parked awkwardly on carpets outside a tent.

Inside, potential bidders were being asked to alleviate the suffering of Syrians with "humanitarian contributions".

Few could have had any doubt that once their money found its way to Syria, fighters - some affiliated with Al-Qaeda - would decide whether to use it to buy aspirin for children or ammunition for killers.

On June 10, the Islamic State in Iraq and Syria (ISIS), also known as the Islamic State in Iraq and the Levant, moved on Mosul, Iraq's second largest city. The advance blew the uniforms off hapless soldiers and police officers, and left prison cells and bank vaults emptied of their contents.

In the largest bank holdup in recent memory, ISIS operatives reportedly stole up to US$400 million in cash.

Flush with money, ISIS will have the resources (as well as the territory) to establish itself as the hub of a global terrorist movement in the heart of the Middle East. There are no Treasury paratroopers to send in to seize the cash, or bank regulations to issue to stop ISIS from spending it.

These three episodes reflect a deep problem for the United States and its allies that has been evolving for several years.

The campaign to disrupt and dismantle terrorist financing after 9/11, which met with much success and once caused Osama bin Laden to bemoan the lack of funding in Al-Qaeda coffers, has given way to a new reality.

The metastasised, Al-Qaeda- inspired terrorist movements have learnt to raise millions of dollars locally, while the conflicts in Syria and Iraq have resurrected the terrorist funding networks of old.

Terrorist funding is now both local and global. Donors and everyday citizens from the Persian Gulf and other sympathetic corners of the world, witnessing the humanitarian crisis in Syria, have been funnelling money to the most effective forces fighting the regime of President Bashar al-Assad there, namely Al-Qaeda-affiliated groups and ISIS.

Smartly, these groups have realised they must match their brutal militancy with charitable services, akin to the governance and charity models of groups like Hizbollah and Hamas. This makes it difficult to differentiate funding to alleviate the suffering of Syrian refugees from support for terrorism.

Alongside these global revenue streams, terrorist networks have become better at taking advantage of local money-making opportunities.

In North Africa, Al-Qaeda in the Islamic Maghreb has the market cornered on kidnap-for-ransom and smuggling operations to the tune of tens of millions of dollars. It has used its resources to buy more weapons to assault Malian and French forces and to support the training of Boko Haram operatives, while Boko engages in its own hostage-taking for profit in West Africa.

The Taleban and Haqqani networks in Afghanistan and Pakistan also run smuggling and kidnapping operations, while profiting from the heroin trade.

The al-Shabab movement in Somalia has developed a trade-based money-laundering system through the export of charcoal and import of sugar, while imposing taxes in areas it controls.

In earlier days, ISIS made plenty of money from petty crimes, bank robberies and oil smuggling. Today, with its control of territory growing in Syria and Iraq, it has established a war economy.

ISIS militants have taken control of resources like granaries and oil installations, and are extorting "taxes" from businesses and selling off government property and equipment (an inventory that now includes American- made Humvees).

This has spawned a for-profit militant model that breathes life into insurgencies around the world.

ISIS is also a leader in using new technologies and social media to raise awareness and reach individual donors. Appeals for donations (or investments) are tweeted while money is raised and sent via the Internet, then withdrawn in the form of bags of cash to be transported into the war zones.

The ISIS publication Al-Naba (The News) has kept donors informed about the progress of specific operations, while Twitter feeds are updated with body counts and photos of the equipment and territory that fighters now control.

If we hope to constrict these global and local fundraising streams, and the dangerous ambitions of terrorist groups, we need a renewed campaign against terrorist financing.

This will require creativity to launch operations against networks now supporting ISIS and Al-Qaeda-related groups, and to form partnerships with local law enforcement, customs authorities and regulators.

We must strengthen border enforcement to intercept cash couriers, and step up anti-corruption efforts to ensure that groups cannot buy access or safe passage.

This requires mustering the political will to isolate deep-pocket donors in places like Kuwait and Qatar; Turkish brokers doing business with these groups; front companies, facilitators and charities in the region; and even countries unwilling to stem the flow of funds to known terrorist groups.

And finally, legitimate aid organisations in Syria and the region must create alternative social services for refugees.

But we cannot cut off the financing to a group like ISIS without first dislodging it from the territory it controls. And this requires a broader counterterrorism campaign. It does require forces allied with the US to separate ISIS from the resources it controls and the economy it now runs.

Without addressing all dimensions of the financing threat, progress over the years may be lost.

If groups like ISIS can fill their coffers, run economies and consolidate their hold on power, we may be facing a new, more dangerous brand of global terrorism that will threaten the US and its allies for years to come.