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　　A "terrorist startup with a clearly defined business model" is how religious historian Karen Armstrong describes Islamic State. The radical Islamist group is the world’s richest terrorist organisation – those who have seen the group’s grotesque propaganda videos may notice fleets of brand-new 4x4s its members drive.

　　But where does the money come from? Analysis suggests donations, smuggled oil (up to $1.645m a day), kidnapping (at least $20m last year), people trafficking, extortion, robbery and last – but not least – the sale of antiquities. It’s a lucrative source of income – for example, the sale of looted items from al-Nabuk, west of Damascus, is reported to have earned IS $36m.

　　IS operates in the richest archaeological arena in the world, the cradle of civilisation. While ancient sites at Nimrud, Nineveh and Hatra are being destroyed, a stream of artefacts suspected to come from such places has appeared on the black market. IS either uses so-called ‘bulldozer archaeology’ (unearthing sites using any equipment available which is extraordinarily destructive), or employs locals to dig up sites and tombs. The group then takes a tax, approved by Sharia law, based on the value of any treasure taken. No-one knows what has come out of the ground and such loot is impossible to identify later.

　　Do not be fooled by the video of IS in Mosul Museum smashing ancient Assyrian statues which it claimed were "worthless idols". IS may have defaced important monuments, which it cannot sell, but evidence suggests it is trading in moveable objects, which it can. In any case, the statues in the museum were plaster copies. "None of the artefacts is an original,” says the head of Iraq's national antiquities department Fawzye al-Mahdi.

　　"They were copies of the originals in Baghdad Museum made when Iraq was building regional museums", says Dr Mark Altaweel, of the Institute of Archaeology at University College London. But large-scale looting has been taking place in Mosul for at least 25 years, with Western demand very high, he adds.

　　The smaller, the better

　　Arthur Brand, of Amsterdam-based Artiaz, one of a growing number of firms which tries to locate stolen art, has dubbed the illicit trade "blood antiques". While antiques are usually less transportable than blood diamonds, they are potentially far more valuable.

　　There are numerous reports of antiques from Syria and Iraq circulating in the European black market. Reportedly, Scotland Yard has four investigations in progress related to Syrian antiques – but without much greater financial help, closing down the networks that move the loot around the world seems an impossible task.

　　"The looters tap into well-established old networks using smuggling routes that often go through Turkey and Lebanon," says Dr Altaweel.

　　Among items in demand are ancient cuneiform tablets, cylinder seals, jars, coins, glass and particularly mosaics, which can be easily broken up and transported. The smaller and easier to conceal and transport an object is, the more valuable it could be.

　　Christopher Marinello, a spokesman for London-based Art Recovery Group, which advises buyers on due diligence, says there has been intense speculation about the value of looted art. "There are a lot of figures floating around”, he says. “Theoretically, tainted objects are worth a fraction of their true value but it all depends on practicality. A large object that is not legitimate may be worth only 10-15% of its true value in the black market but smaller, more easily transported pieces can be worth a much greater percentage.”

　　Smaller, more easily transported pieces can fetch much more on the black market than large artefacts (Credit: Getty)

　　IS is not the first terrorist organisation to use blood antiques for funding. In 1974, the IRA stole old master paintings, including Vermeer's Lady Writing a Letter with her Maid, from a house in County Wicklow. The works were then valued at $12m.

　　Smash and grab

　　Very few of the thousands of artefacts looted in Syria and Iraq will ever see the light of day. They will disappear into private collections and vaults largely in Europe and America – where there is specific demand for pre-Islamic items – and in Japan and Australia. If items are recovered it usually takes years for investigators to secure convictions.

　　Last month, the US Immigration and Customs Enforcement (ICE) displayed some 60 artefacts that had been recovered, including a magnificent head of the Assyrian King Sargon II, valued at $1.2m. Operation Lost Treasure (a name suggestive of a Hollywood film) dates back to 2008 when word came of Dubai-based antiques dealer Hassan Fazeli shipping illegal goods to the US.