Combating Financing Terrorism in India
By Colonel B. S. Nagial (Retd.) On 11 September 2001, terrorism crossed all the boundaries and became faceless yet a lethal weapon after it struck the US. The magnitude of the attack, the targets chosen, planning and infrastructure involved were beyond the imagination of scholars, security analysts and the policy makers. Since then, it has stimulated new national and international endeavours to track the ways and means of terrorist funding to clog them effectively. Nevertheless, evidence on terrorist sustenance edifices is challenging to stumble upon and even if it comes out, it is vague and mostly unreliable. Maybe only the intelligence and security agencies have a specific inkling of the roots and extent of financing terrorism. For example, investigators in the US believe that terrorists had spent about US$5,00,000 to carry out their 9/11 attacks. However, it will likely cost the US at least $100 billion to repair the damage. Terrorist organisations require funds to survive, thrive and carry out terror and violent actions. The financing of terrorism involves the resources of revenue and methods undertaken by terrorist organisations to fund their nefarious activities. The required funds could be generated through permissible sources such as profits from businesses and charitable organisations. But generally, terrorist organisations get the money from illegal resources such as the smuggling of arms, ammunition, logistic stores, drugs, etc. or kidnapping for payoff. Combating the financing of terrorism is an extremely intricate venture which involves multifaceted activities and players. It requires both legislation and ground-level operations involving different agencies. Taking a stride in the direction of combating terrorist financing, the United Nations Office of Drugs and Crime (UNoDC) issued the guidelines through the International Convention for the Suppression of the Financing of Terrorism in 1999. By implementing these conventions, the member nations could develop capacities of criminal justice and law enforcement agencies to investigate, prosecute and adjudicate terror financing. To track the financing of terrorism in India, a Terror Funding and Fake Currency (TFFC) cell has been set up under the supervision of the National Investigation Agency (NIA). It focuses on terror funding as well as fake currency notes. India has also strengthened the provisions enumerated in the Unlawful Activities (Prevention) Act 1967 to combat terror funding. It is the responsibility of all States and Union Territories to prevent the financing terrorist networks. The main aim of persons or entities involved in terror funding is to conceal the sources of money and funding activities. Money laundering is the process of concealment and camouflage of illegal origins and proceeds of criminal activities dealing with money. In both cases, the illicit use of the financial sector is involved. The most disturbing fact is that money laundering equips corruption and organised crime. The techniques used in money laundering and financing terrorism are similar, identical, and somewhat overlapping. Therefore, anti-money-laundering/ countering terror financing must address both these risks. Today, the world is technology driven. Swift developments in financial information, technology, and communication permit money to travel worldwide easily and quickly. This makes the job of anti-money laundering/ combating terror financing more dynamic and challenging. Terrorists frequently change their methods and means of raising and moving funds & other assets to hide their activities from the agencies involved in countering them. Thus, it is imperative to identify correctly, assess and understand the mechanism of funding terrorism. This is very crucial for the disruption and dismantling of terror funding networks. Modus Operandi of terror funding Terrorists need funds to function as an organisation. With the money, they buy arms, ammunition, and other warlike stores. Their sources of funding could be both legal and illegal. Funding generally takes place in small amounts. Terror financing is a worldwide phenomenon threatening the world community’s peace and security and weakening economic development and market stability. Therefore, it is essential to curb the flow of funds to terrorist organisations. Though terrorist organisations and their tactics have evolved, yet the primary requirement of the terrorists to raise, move and utilise funds has not changed over a period. The funds are mobilised in numerous ways, such as exploiting legitimate commercial ventures and natural resources, abuse of non-profit organizations, non-governmental organisations, and crowdfunding sites. Terrorist organisations might also be directly or indirectly associated with organised inimical groups/ people. They might involve them in felonious actions, such as drugs, arms trafficking, human trafficking, blackmailing, and kidnapping for money. Nations are always worried about terrorists’ ill use of the Internet and other emerging technologies to garner and move funds, including through virtual currencies. Tracing measures and scrutiny of financial intelligence provide critical information on terrorist networks and their links with individual terrorists and Foreign Terrorist Fighters. Terrorism in India Terrorism in India could be divided into four major categories as Terrorism in Jammu and Kashmir, Terrorism in the hinterland, Left-Wing Extremism (LWE) and Insurgency in Northeast states of India. Their activities include terrorism, secession, smuggling, production and circulation of Fake Indian Currency Notes, terror funding, etc. According to the accessible intelligence reports, terrorists who are in action in India are frequently reinforced and financed by their parent organisations located outside, predominantly in Pakistan, in the forms of shelter, training, weapons and finance. Countering terror funding and anti-money laundering in India There are four components of the financial market in India – banking companies, financial institutions, the securities sector, and insurance companies. A fully functional Financial Intelligence Unit (FIU) was established in the country in 2006 as a chief national agency in charge of receiving, processing, analysing and disseminating information relating to suspect financial transactions to enforcement agencies and foreign FIUs. It reports directly to the Economic Intelligence Council (EIC) under the Finance Minister of India. The other members of the EIC are heads of all the intelligence agencies, the Governor RBI, and the Chairman of SEBI. Agencies involved in the AML/ CFT system The Ministry of Finance is accountable for fiscal policies in India, including revenue and tax collection, budgeting, and expenditure of the Govt of India. Department of Revenue oversees monitoring…