Finance committee  Two threats highlighted in that briefing were al Qaeda, particularly al Qaeda in the Arabian Peninsula, and a range of Iranian groups, principally Hezbollah among them, as well as the Islamic State. The Islamic State, despite encouraging or trying to inspire terrorism in North America, so far has been much more focused on the Middle East and trying to build a caliphate, starting in Iraq and Syria.

Finance committee  To disrupt its funding, you have to figure out what the sources are and where they come from. It's really a multi-agency and potentially multinational effort among allies. I can go into more detail off-line, if you like.

Finance committee  In the interest of time, I'll just say that I agree with almost everything Mr. Fanusie said. I would add one thing on the artifacts. I think there's relatively good documentation on the ISIS cut of this, which, if you want to call it a tax or whatever, tends to be about 20%. He's right that certain other taxes are as high as 50%, and still other taxes are as low as, I think, 2%.

Finance committee  In the case of ISIS, I think that certainly there was a warning from the U.S. intelligence community about the group and its rise, particularly in regard to the Shiite crackdown in the government on Sunni politicians, subsequent protests, and the movement of the group that's now known as ISIS into Syria when it was still known as the Islamic State of Iraq.

Finance committee  First of all, I agree with all of your points. It's a set of trade-offs and dilemmas, but to the last point, the humanitarian aspect, I think that is a critical issue now throughout the Middle East, in terms of how to disburse aid and other humanitarian assistance in a way that doesn't compromise national security.

Finance committee  No, I don't think it should preclude that.

Finance committee  Yes, sure. It's because ISIS controls the territory that it has in Syria and Iraq much like a sovereign state and is the primary authority. It's able essentially to clamp down and make the economic rules of the game, and it taxes all kinds of economic activity within the territory, from water to electricity to government salaries, which are still being paid by Baghdad to government employees who are living in northern Iraq, to goods and services.

Finance committee  Sure. I think that the main threat to the United States and Canada does come from the citizens of North America who went and travelled to Iraq or Syria, continue to hold passports, and can return. I think that this presents a different set of challenges from the ones that I highlighted as kind of the high-level issues about what makes ISIS a particularly potent and difficult adversary to deal with through some traditional terrorist finance instruments.

Finance committee  There's certainly a risk, and I think that some of it stems from domestic law and particularly the ability of people to move relatively freely when they have a passport. There are border control issues as transit points in the EU countries for returning to the United States and I think to Canada as well.

Finance committee  I think the coalition would be able to make a substantial difference in being able to reduce ISIS's ability to access its local funding if it had a larger presence in Iraq and Syria. That said, I'm not here to advocate for any particular policy as much as to analyze different policy options.

Finance committee  Thank you, Mr. Chairman, and members of the committee for inviting me to testify today. As terrorist organizations have marshalled unprecedented funding for their activities recently, the need to address counterterrorist finance policy is clear. Accordingly, my remarks today will focus on the Islamic State, also known as ISIS or ISIL, a group that I've been studying extensively since 2012.

Finance committee  I can, thanks.