Tax and spend: laissez-faire Islamic State capitalism for the illicit antiquities trade?

As I explained in the last post, according to (a so-far-offline part of) die Zeit’s international investigation, the Islamic State permits illicit excavations in return for 12.5% tax [20% or 22.5% tax] of the income of the private looting-smuggling businesses (10% income tax<, 2.5% charity tax [20% antiquities tax, on top of which there may also be a 2.5% charity tax; though, amongst all commodities, antiquities are apparently subject to a unique taxation rate, so the 2.5% zakat charity tax cannot be assumed]). One of its authors, Yassin Musharbash, had already been kind enough to summarise their findings on Twitter @abususu. Now he’s blogged a detailed preview of their research into the “Islamic State” and the Illegal Sale of Antiquities.

The overall investigation involved twelve reporters. The antiquities investigation alone involved “major” work by five – die Zeit’s Musharbash, Tobias Timm and Fritz Zimmermann, freelance journalist Alexander Bühler and (public TV programme) Report München’s Ahmet Senyurt. I can only reiterate that the scale of all of the German media investigations, and the responsiveness of their journalists, has been second to none. I do have questions about their information, but that’s because they’ve actually produced information about which it is possible to ask questions.

In specific reference to Martin Chulov’s (inconsistent) claim(s) in the Guardian (and on CNN), that the Islamic State had been ‘smuggling… priceless antiquities from archaeological digs’, and had made thirty-six million dollars, either from antiquities in Nabk district or from all commodities in Nabk district, or from antiquities across Syria, Musharbash explained that die Zeit decided to publish an article on the antiquities trade (separate from the rest of their investigation into Caliphate business) because they ‘could not find any evidence that the IS is directly involved in the sale of illegal antiquities’.

Caution

Even in his quick mid-work blog, Musharbash was a model of cautious reporting: the evidence that they were able to collect did not prove that the IS was involved in the sale of antiquities or that antiquities from IS territory were on the black or grey market. ‘Given that we didn’t find any evidence we had to assume that the IS is probably not making that much money off of antiquities after all.’

As he noted, this ‘doesn’t mean that private collectors don’t buy this sort of thing through illicit networks in a way that wouldn’t leave traces’, just that die Zeit couldn’t access the evidence. As I noted when there was talk of auction houses handling ‘unheard of numbers’ of Syrian and Iraqi antiquities, there is no evidence of auction houses handling new conflict antiquities from any of the territories in Syria or Iraq.

Die Zeit is (rightly) ‘sceptical that the sale of antiquities is in any way a major means of income for the IS…. compared to… oil sales, extortion and Western hostages‘. Still, they ‘in no way doubt that antiquities are being stolen and sold in Iraq as well as in Syria’, and they too have heard testimony that the Islamic State is taxing illicit antiquities transactions, so it is profiting from the illicit antiquities trade.

From confessions and videos, security seizures and sting operations, citizens’ photographs and satellite images, we know that sites are being looted and antiquities are being smuggled out from territories under regime, rebel and jihadist control. And, from private catalogues of looted antiquities on offer in the UK and the US, we know that they are reaching the market. The question is not if this is happening but how. Encrypted communications and encrypted currencies are now basic technologies. Antiquities dealers accept bitcoin. [Collectors buy direct from looters in transit countries.] Private antiquities trading is invisible, not non-existent.

Tax

The Islamic State’s reported tolls now range from a flat 10% + 2.5% tax [on all other commodities] to regionally and typologically flexible taxes [on antiquities], which themselves range from a flat 20% tax in Aleppo to a rate of 20% on non-Islamic antiquities and 50%+ on Islamic and/or precious metal antiquities in Raqqa. (In-between, one report seemed to indicate a flat 20% tax, but presumably that was a summary reference to the base rate.)

Unfortunately, there are not many options here. Either die Zeit’s team, which conducted research in seven countries including Syria and Iraq, is wrong and the tax rate is much higher and more complicated than what they have found; or the Syrian opposition’s Heritage Task Force, which has informants in Islamic State territory, is wrong and the tax rate is much lower and simpler than what they have found; or there is a low flat tax on all other commodities and a uniquely high and variable tax on antiquities. But there are other questions, beyond the principle of tax policy.

Spend

According to the team’s ‘sources in the region’, the Islamic State ‘does in fact allow criminals to dig out and steal such antiquities in exchange for a fee‘ and ‘doesn’t mind other people taking antiquities away — at least those antiquities that they don’t think needs to be destroyed straight away’.

But how does that work? In the past, I’ve queried the operation of the al-khums (one-fifth) tithe, and this raises similar questions. The system may genuinely be peculiar but, if so, its peculiarities should be explained (eventually – this team’s been busy enough as it is). Several questions immediately spring to mind:

[I still haven’t had a chance to work my way through all of the material that relates to the NDR/Das Erste documentary, but people are still showing patience and sharing information over Twitter. Last week, Esther Saoub noted that one (or more) Syrian eyewitness(es) had testified that the antiquities trade was financing terrorism.

This morning, she told me that, ‘according to a man from Manbij[,] the local (Jordanian) #IS Emir is digging with teams‘ whom he pays 700 Syrian pounds ($4) each per day. On another occasion, when locals found a Roman mosaic, it was ‘confiscated by #IS and sold to Turkish traders who came to Manbij’. The/an eyewitness from Manbij observed that the Islamic State’s ‘attitude towards #antiquities depends on [the local] emir: [as to whether to] destroy, ignore or sell’. As I said when I looked at the Syrian Heritage Task Force’s findings of the variable tax rates, the organisation might be better conceived of as Islamic States than Islamic State.]

1. Why does the Islamic State have a massive bureaucracy and strict control over the minute details of its subjects’ daily lives, but nonchalantly accept a fee for looting? [As I note after question 2, it may be a matter of practicality.]

2. Why does the Islamic State tax cultural asset transactions at the point of their lowest value, when the objects come out of the ground? (That may be a matter of practicality, either because that’s the easiest way to impose the tax, or because the IS has a symbiotic relationship with established antiquities trafficking gangs.)

3. Why does the Islamic State pillage other public assets and its victims’ private properties, but permit others to pillage archaeological sites (which might be far more valuable than domestic holdings), especially when it is a regime that is funded by asset theft? [Again, as I note after question 2, it may be a matter of practicality.]

4. Since the Islamic State evidently permits the trade in some ideologically-unacceptable (iconic) cultural goods in return for money, why does it destroy the most valuable ones, on which it would collect the most taxes? [It may be because it would be difficult to hide their hypocritical non-destruction of large iconic objects from the public, or because it is easier for their smuggling networks to traffic small objects.]

5. Since the excavators are “professionals” (professional criminals) and pay a flat or stepped tax on their products – since the excavators do not pay higher taxes on more valuable objects – why do they conduct unskilled work and strip-mine the land for low-value commodities?

6. How does the Islamic State determine the value of looted antiquities and levy the 12.5% (or 20% or 50%) tax? Does it have an archaeologist or antiquities trader as assessor and tax collector at each looted site and/or at each transit tax office?

7. Aren’t the expert assessors going to make deals with the looter-smugglers to undervalue the commodities then split the unpaid tax?

8. It has long been public knowledge that armed groups in Syria have been investing in and profiting from the looting and smuggling of antiquities. Even if the Islamic State had somehow remained ignorant of that fact, if it has established a bureaucracy to regulate the antiquities trade, it must have come to appreciate the value of that trade to its revenues. So why hasn’t it formed its own excavation teams and annexed the trade under its control? [As Saoub and the Syrian Heritage Task Force have pointed out, it has (in some places – at least one emir has banned antiquities looting as un-Islamic).]

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