Finance ministers from the 15 nations on the UN Security Council will meet to adopt a resolution aimed at disrupting the outside revenue that the Islamic State of Iraq and the Levant (ISIL) group gets from selling oil and antiquities.
ISIL, which gets money from ransom payments and other criminal activities, is already subject to UN sanctions under resolutions dealing with al-Qaeda.
The Security Council's meeting on Thursday comes after the United States, Turkey and Iraq announced they were actively targeting the armed group's revenue sources.
The proposed resolution, sponsored by the US and Russia, elevates ISIL to the same level as al-Qaeda, reflecting the growing threat it poses especially in the Middle East and North Africa.
READ MORE: Cracking down on ISIL's oil revenue
US Treasury Secretary Jacob Lew, who will chair Thursday's meeting, which is the first ever such UN Security Council gathering of finance ministers, has said that cutting ISIL off from the international financial system is "critical to effectively combating this violent terrorist group".
Speaking at Chatham House in London last week, senior US treasury official Adam Szubin said the US was already working with the Iraqi government to prevent ISIL from having access to its funds.
"ISIL has made more than $500m from black market oil sales. It has looted between $500m and $1bn from bank vaults captured in Iraq and Syria," Szubin said.
Turkish and Iraqi authorities have also announced that they are attempting to stop the flow of oil produced in areas controlled by ISIL.
Al Jazeera's Bernard Smith, reporting from Istanbul, said Turkey had stepped up surveillance of its 900km border with Syria, while Iraqi Lieutenant Colonel Bola Ahmed Majid, a security official in Daquq in Iraq's Kirkuk governorate, said side roads had been cut off to stop oil smuggling.
"We cut all those roads off by digging a ditch around the whole area. ISIL is now forced to send their oil to Mosul," he told Al Jazeera.
READ MORE: ISIL raises up to $1.5bn from bank looting, oil sales
The draft Security Council resolution, obtained by the Associated Press news agency, would rename the committee monitoring sanctions against al-Qaeda as "the ISIL and al-Qaeda sanctions committee".
It calls ISIL a splinter group of al-Qaeda and stresses that "any individual, group, undertaking, or entity supporting ISIL or al-Qaeda" is subject to UN sanctions, including an asset freeze, travel ban and arms embargo.
The draft encourages the 193 UN member states "to more actively submit" names for inclusion on the sanctions list and expresses "increasing concern" at the failure of countries to implement previous sanctions resolutions.
Source: Al Jazeera And AP