Terrorism is defined as systematic use of violence to create a general climate of fear to attain a political objective and for this purpose it needs financing for recruitment, planning and executing their vicious activities.
Sources of terror funding can be both external or internal:
- Religious Donations: Such as zakat, also contributes to terrorism financing, with some of it finding its way into terrorist activities in countries like India.
- Radical Charities: Radical charities persist, such as Jamaat ul-Dawa and LeT in Pakistan.
- Remittances: Indian extremist groups receive foreign remittances, notably from the Gulf, raising concerns.
- Counterfeiting of Currency: Pakistan uses counterfeit Indian currency, sourced both domestically and internationally, to fund various terrorist groups.
- Narco-Finance: Drug trafficking, primarily from Afghanistan, provides substantial financing.
- State Sponsorship: Pakistan’s ISI directly funds terrorism in India, with ISI utilizing various sources, including charities, NGOs, drug trafficking, zakat donations, and counterfeiting
- Internal Sources: Historically, terrorism funding within India relies on illegal finances. Extortion, taxation, and crime and from over ground workers in areas.
India has implemented a multifaceted approach to combat terrorism financing:
- The Prevention of Money Laundering Act, 2002, focuses on preventing and controlling money laundering, with the Financial Intelligence Unit (FIU-IND) receiving reports on suspicious transactions.
- The Enforcement Directorate investigates money laundering offenses and coordinates internationally.
- Special units, such as the Combating Financing of Terrorism (CFT) Cell and Terror Funding and Fake Currency Cell, address terror funding cases.
- Amendments to the Unlawful Activities (Prevention) Act in 2013 expanded its scope.
- India is also a member of international bodies like FATF, EAG, and APG. Demonetization has been used as a tool but isn’t a comprehensive solution
In this regard, NMFT conference was organized recently in India which:
- Differentiated b/w fighting terrorist and terrorism: The fight against terrorism differs from fighting individual terrorists. Terrorism involves a network of individuals, necessitating a proactive, systemic response.
- Condemned State sponsored terrorism: State support for terrorism is a significant issue, and countries backing terrorists must face consequences.
- Organized Crime nexus: Organized crime as a source of terror funding, emphasizing the need to combat it.
- Role of International institutions: like the UN Security Council, FATF, and technology play crucial roles was recognized.
- Emerging areas: Cyberterrorism was recognized as emerging area.
Thus, a common approach to counterterrorism, through international coordination and joint operations, is essential to prevent misuse of legal differences was broadly agreed upon.