Country Report on Terrorism 2016 - Chapter 2 - Iraq

Overview: Iraq made impressive progress in 2016 toward defeating ISIS, which had occupied large areas of the country since mid-2014. The series of successive ISIS defeats continued with Iraqi Security Forces (ISF) liberation of Ramadi in February, elimination of ISIS presence in Hit, Karma, Jazira al-Khalidiya, and Rutbah through the spring, recapture of Fallujah in June, seizure of Qayara Airbase in July, and launch of a broad offensive in Ninewa in October, resulting in ISF penetration deep into eastern Mosul at the end of the year assisted by Coalition air power. As it retreated, ISIS killed hundreds of Iraqi civilians, publishing macabre videos of the murders to terrorize Iraqis, and forcing Mosul residents to remain as human shields to discourage airstrikes. ISIS also demonstrated its continuing ability to conduct massive terrorist attacks in Baghdad and Shia-majority areas, killing at least 300 civilians in coordinated bombings in Baghdad in July and killing at least 80 Iranians and Iraqis (the bulk of whom were Shia Arba’in pilgrims) in Hilla, south of Baghdad, in November.

By the end of 2016, ISIS had lost much of the territory it captured in 2014 and early 2015. While ISIS continued to offer fierce resistance in Mosul’s city center and a few other strongholds, it lost some of its ability to generate revenues or resupply itself militarily. The ISF had reclaimed most of Anbar (with only the Qaim-Rawa corridor remaining ISIS-controlled), nearly all of Salah al-Din, Kirkuk (except for Hawija), and Ninewa (except for Mosul and Tal Afar). This represented a dramatic, positive advance from the situation in Iraq in 2015.

Still, even as the Government of Iraq – supported by the 73-member Global Coalition to Defeat ISIS – made significant progress in its campaign to expel ISIS from Iraq, severe internal security threats endured. Iraqi officials made little progress on managing the country’s ethnic, religious, and sectarian fissures, and the passage of legislation formalizing the Popular Mobilization Forces (PMF) proved a divisive step that exacerbated the doubts of many Sunnis about the government’s willingness to rule for the benefit of all citizens.

The U.S.-led Defeat-ISIS Coalition focused on training, equipping, advising, and assisting the ISF, including Kurdish Peshmerga, in coordination with the Government of Iraq. Twenty coalition states joined the United States in deploying military personnel to assist the Iraqi government in training, along with “advise and assist” missions. Coalition partners trained more than 38,500 ISF, while coalition members conducted 4,300 air strikes in Iraq, including in support of Mosul’s liberation. Coalition states contributed more than $1 billion to UN‑managed stabilization projects and humanitarian support in 2016, including at the Iraq Donor Conference in July, bringing total humanitarian assistance to more than 4.5 billion since the current crisis began in 2014. Iraqi officials also participated in Counter-ISIS Ministerial and Lines of Effort working group meetings throughout the year.

2016 Terrorist Incidents: Terrorist groups continued to mount a large number of attacks throughout the country. ISIS’s use of captured and improvised military equipment gave it sophisticated capabilities in line with a more conventional military force, including the reported use of tanks, armored vehicle-borne improvised explosive devices, artillery and mortars, and self-developed unmanned aerial drones, capable both of surveillance and attacks using primitive air-drop bomblets or booby-trapped components. According to estimates from the UN Assistance Mission for Iraq, acts of terrorism and violence killed more than 7,000 civilians and injured more than 12,000 in 2016.

Many of Iraq’s armed Shia groups are backed by Iran, including Kata’ib Hizballah (KH), Asa’ib Ahl al-Haqq (AAH), and the Badr Organization. These Iranian-backed groups continued to operate in Iraq during 2016, which exacerbated sectarian tensions in Iraq and contributed to allegations of human rights abuses against primarily Sunni civilians, particularly in Fallujah, where residents claim hundreds of male residents remain unaccounted for after the city’s liberation in June. KH, AAH, and other militias associated with Iran’s Islamic Revolutionary Guards Corps-Qods Force have been combating ISIS alongside the Iraqi military. In November, the Council of Representatives passed legislation formalizing the PMF as part of the ISF, although which militias will be formally enrolled or how they will be enrolled (as individuals or as units) in the legalized PMF had not been determined at year’s end. The inclusion of KH – a U.S. designated Foreign Terrorist Organization – in the legalized PMF could represent an obstacle that could undermine shared counterterrorism objectives.

The following is an illustrative sample that highlights only a small number of the most egregious terrorist attacks conducted in 2016:

Legislation, Law Enforcement, and Border Security: With substantial training and equipment from the Coalition, the ISF strengthened its capabilities to provide local security and defeat terrorist threats. Independent ISF operations throughout Iraq showcased marked improvements in ISF capacity over the course of the year. Border security remained a critical gap; border crossings with Syria remained in ISIS hands and the Government of Iraq had no capability in 2016 to prevent smuggling across the Iraq-Syria border.

Iraq enacted legislation delineating powers, mandates, and duties of the Counter Terrorism Service in October, and passed legislation formalizing incorporation of the PMF into the ISF in November. The PMF law (passed by the Council of Representatives in November and published in December) presented challenges due to its likely inclusion of Iran-affiliated militia groups into the ISF, but it also provides avenues to govern the conduct of these groups and to ensure all armed actors are accountable to Iraqi law.

Iraq continues to support the Terrorist Interdiction Program’s Personal Identification Secure Comparison and Evaluation System (PISCES) in an effort to secure its borders and identify fraudulent travel documents. The Government of Iraq has the capability to conduct biographic and biometric screening at multiple land and air ports of entry. Iraq also continued to participate in the Department of State’s Antiterrorism Assistance program, which has improved selected and vetted Ministry of Interior units’ contributions to the counter-ISIS fight.

Countering the Financing of Terrorism: Since 2005, Iraq has been a member of the Middle East and North Africa Financial Action Task Force (MENAFATF), a Financial Action Task Force (FATF)-style regional body. Iraq is under review by the FATF, due to a number of strategic deficiencies in its anti-money laundering/countering the financing of terrorism (AML/CFT) regime. Iraq has taken steps towards improving its AML/CFT regime, including passing an updated AML/CFT law in 2015, and issuing a set of regulations in accordance with the new law in 2016, to help bolster its compliance with the international FATF standards.

In 2016, the Government of Iraq, including the central bank, law enforcement, and judiciary took measures to disrupt ISIS’s financial activity, including: enforcing a national directive to prohibit financial transactions with banks and financial companies located in ISIS-controlled areas; cutting off salary payments to government employees located in ISIS-controlled areas to prevent those salaries from being “taxed” by ISIS; prohibiting exchange houses and transfer companies located in ISIS-held areas and those suspected of illicit activity from accessing U.S. banknotes in the central bank’s currency auctions; sharing a list of banned exchange houses and money transfer companies with regional regulators; revoking the license and freezing the assets of a U.S.-designated exchange house; and taking judicial action against over a dozen individuals and companies suspected of illicit financial activity. These actions ranged from business closures to the arrest of suspects.

Iraq is a member of the Coalition’s Counter-ISIS Finance Group. The Government of Iraq, including the Central Bank of Iraq’s financial intelligence unit, collaborated with the U.S. Department of the Treasury to further develop its AML/CFT regime and strengthen its capacity to implement international standards for financial sector oversight.

For further information on money laundering and financial crimes, see the 2017 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/2014/index.htm.

Countering Violent Extremism: The Government of Iraq recognized that defeating ISIS requires exposing the group’s true criminal nature and disconnecting the counter-ISIS fight from Iraq’s internal political tensions. Formation of the Iraqi War Media Cell in 2016 represented a significant step in countering ISIS disinformation and propaganda.

International and Regional Cooperation: Iraq is a member of multilateral and regional organizations including the United Nations, the Organization of Islamic Cooperation, and the Arab League.