CIA Director John O. Brennan said Thursday the U.S.-led campaign against the Islamic State has dealt the extremist group battlefield loses and chipped away at its finances, but he cautioned that coalition efforts have not diminished the group’s global reach or its ability to carry out terrorist attacks.  

Testifying before the Senate Intelligence Committee, Brennan also warned that the Islamic State is trying to deploy operatives to carry out more attacks in the West like the recent ones in Paris and Brussels. He said the terrorist group is exploring way of slipping its fighters into European countries, including in refugee flows and smuggling routes.  

“Unfortunately, despite all our progress against ISIL on the battlefield and in the financial realm, our efforts have not reduced the group’s terrorism capability and global reach,” Brennan said, using an alternative name for the Islamic State. “The resources needed for terrorism are very modest, and the group would have to suffer even heavier losses of territory, manpower and money for its terrorist capacity to decline significantly.”  

In Syria and Iraq, Brennan noted that the coalition has clawed back territory from the extremist group and has whittled away at its finances and media operation. The U.S. has also taken out around 120 Islamic State leaders and field commanders, and growing signs suggest morale is dropping among the group’s rank-and-file, he said.  

He put the number of Islamic State fighters currently in Syria and Iraq between 18,000 and 22,000, down from the CIA’s previous estimate of 33,000 last year.  

While coalition efforts are squeezing the Islamic State’s core territories, the group’s foreign branches, particularly in Libya and Egypt, help it maintain the capability to conduct attacks regardless of what transpires in Syria and Iraq, Brennan said.  

The group is slowly cultivating its global web of affiliates into what Brennan described as a “more interconnected organization.”  

The Libyan outfit is the most developed and most dangerous, he said, and is looking to boost its influence in Africa and plot attacks in the region and Europe. Brennan estimated the group had between 5,000 to 8,000 fighters in the country, and said the militants are using a stretch of territory it controls around the city of Sirte on the Mediterranean coast to train and potentially plot attacks abroad.  

“I am concerned about the growth of Libya as another area that could serve as a basis for ISIL to carry out attacks inside of Europe and in other locations,” Brennan said.  

In Egypt’s Sinai Peninsula, Brennan said, the Islamic State numbers upward of 1,000 fighters and has emerged as the “most active and capable” terrorist group in that country, the CIA director said.  

He said the CIA attributes the downing of the Russian passenger jet last year in the Sinai to a bomb smuggled on board by the Islamic State.  

In Yemen, Afghanistan and Pakistan, Brennan said there are hundreds of Islamic State fighters, but in those countries the group’s branches have struggled to build a significant presence.  

Turning to the challenges that lie ahead, Brennan said the main thing that concerns him for future administrations is the lack of clear authorities for how to handle challenges in the digital world.  

”The digital domain is a new domain, it is the new frontier,” Brennan said. “I do not believe our legal frameworks, as well as our organizational structures and our capabilities, are yet at the point of being able to deal with the challenges in that digital domain that we need to have in the future.”  

He encouraged Congress and the next administration to tackle the issue, particularly with the rise of the so-called internet of things, which will connect almost all electronic devices with the internet.  

One aspect of the broader technology question in national security is the use of encryption, which shields our information and communications from hackers but also can prevent law enforcement from legally accessing information. The FBI’s recent legal battle with Apple Inc. over a locked iPhone used by one of the shooters in the San Bernardino attack is the highest-profile example of this challenge.  

On the encryption issue specifically, Brennan said he supports the idea of a commission proposed in legislation (S 2604 and HR 4651 ) introduced by Sen. Mark Warner , D-Va., and Rep. Michael McCaul , R-Texas, to try to find a path forward that takes into consideration both civil liberties concerns and national security interests.