This report discusses the U.S. policy approaches for countering the financial resources of the Islamic State, which has seized significant territory in Iraq and Syria and threatened to conduct attacks against the United States and its citizens.

This report discusses Iraq's political system that is increasingly characterized by peaceful competition and formation of cross-sectarian alliances. However, ethnic and sectarian political and sometimes violent infighting continues, often involving the questionable use of key levers of power and legal institutions. This infighting-and the belief that holding political power may mean the difference between life and death for the various political communities-significantly delayed agreement on a new government that was to be selected following the March 7, 2010, national elections for the Council of Representatives (COR, parliament).

This report provides background and current information on the Islamic State, a transnational Sunni Islamist insurgent and terrorist group that has expanded its control over areas of northwestern Iraq and northeastern Syria since 2013. The report also examines possible U.S. policy options in the wake of increasing international outrage at the Islamic States' brutality and apparent disregard for typical human rights conventions.