Terrorism is defined as the unlawful use of violence and intimidation, especially against civilians, in the pursuit of political, religious, ideological, or socio-economic objectives.
Major Sources of Terror Funding in India:
1. Drug Trafficking: The illicit drug trade, especially in the northern and northeastern regions of India, is a significant source of revenue for some terror groups. The sale of narcotics provides a reliable and substantial cash flow.
2. Counterfeit Currency: Trafficking in fake Indian currency notes has been a method to not only destabilize the Indian economy but also fund various terror activities within the country.
3. Money Laundering: Terror outfits often use complex networks of transactions to obscure the origin of their funds. The hawala system, an informal trust-based money transfer system, is frequently used to move funds surreptitiously.
4. Smuggling: Smuggling of goods, such as gold, electronic items, and precious stones, across India’s vast borders is another revenue stream for terror organizations.
5. Kidnappings and Extortion: In areas with a significant presence of extremist or insurgent groups, kidnappings for ransom and systematic extortion from businesses can serve as direct funding sources.
6. Donations: Some terror groups or their front organizations project themselves as charitable or religious entities, collecting funds domestically and internationally under this guise.
Efforts Being Made to Curtail terror-funding Sources:
1. Strengthened Legal Framework: The Unlawful Activities (Prevention) Act (UAPA) has been fortified over time to counter terror financing, enabling the authorities to freeze assets, prohibit fund collection, and ban entities involved in terror funding.
2. Financial Action Task Force (FATF): As a member of FATF, India is committed to implementing international standards to combat money laundering and terror financing. Regular evaluations by FATF push nations to strengthen their preventive and combative mechanisms.
3. Monitoring and Surveillance: Financial intelligence units and other agencies keep a close watch on suspicious financial activities. Banks and financial institutions are mandated to report high-value and suspicious transactions.
4. International Cooperation: India collaborates with other nations and international bodies to share intelligence, track funds, and act against entities involved in terror financing.
5. Regulation of Informal Transfer Systems: Efforts are being made to monitor and regulate the hawala system and other informal channels to prevent their misuse for terror funding.
6. Public Awareness Campaigns: The government and civil society organizations have initiated campaigns to inform the public about the channels of terror financing and encourage the reporting of suspicious activities.
7. Enhanced Border Vigilance: Enhanced monitoring of borders, especially in sensitive areas, to prevent smuggling and illicit trade which can fund terror activities.
8. Crackdown on Drug Trafficking: By targeting drug networks and confiscating their proceeds, the government aims to hit at one of the major sources of terror financing.
“No Money for Terror” Conference
The “No Money for Terror” conference was started in 2018, as an initiative of the French government, to specifically focus on cooperation between countries to choke terror funding.
It offered a unique platform for participating nations and organisations to deliberate on the effectiveness of the current international regime on Counter Terrorism Financing and the steps required to address emerging challenges.
Aims and Objectives of NMFT:
1. Preventing diversion from legal financial instruments by fighting anonymity in financial networks.
2.Restricting the use of proceeds of other crimes for terrorist activities.
3. Preventing use of new financial technologies, virtual assets like crypto-currencies, wallets etc., for terror activities.
4. Eliminate the use of Illegal Channels, Cash Couriers, Hawala by Terror Networks
5. Prevent the use of Non-Profit Organisation, NPOs Sector to Spread Terror Ideology
6. Continuous capacity building of counter-terror and financial intelligence agencies of all countries.
No Money for Terror (NMFT) is based on 5 pillars:
The first pillar is to establish a comprehensive monitoring framework involving cooperation, coordination, and collaboration among all intelligence and investigative agencies.
The second pillar, the strategy of “Trace, Target, and Terminate”, to be adopted from low-level economic offenses to more organized economic crimes.
The third pillar, strengthening and harmonizing the legal structures related to terror finance.
The fourth pillar, developing a robust mechanism against the misuse of Next Generation Technology.
The fifth pillar, strengthening the legal and regulatory framework for asset recovery.
Addressing the channels of terror financing is pivotal in the broader strategy of counter-terrorism. By blocking these funds, the operational capabilities of terror outfits are significantly weakened.