Terrorist financing

As the world shrinks with technological and communication changes, terrorists, criminals, weapons and funds are also able to move across national boundaries easily. International co-operation between law enforcement authorities in this area is a sine qua non for combating such cross border challenges.

Background –

• To trace the history briefly, the international efforts to tackle the menace of terror financing began way back in 1989 when the Financial Action Task Force (FATF) was formed as a means of bringing order and implementing standards to the monetary system in the world with regard to terror finance and money laundering.
• However, it was the 2001 terrorist attacks that changed the way security agencies looked at terror financing. The UNSCR resolution 1267 in 1999 and UNSCR resolution 1373 in 2001 formed the bedrock of the financial sanctions regime for terrorist organisations and individuals.
• In this situation, it is essential for India to take the lead to bolster such efforts. India’s efforts in taking this momentum forward need to be appreciated. We recently saw the 90th Interpol General Assembly in New Delhi, followed by a special session of UN Security Council’s Counter Terrorism in late October. Again, India is hosting another global conference focussed only on Countering Financing of Terrorism (CFT).

Sources of finance –

The global flow of funds for nefarious purposes has three traditional channels —

1. First, direct smuggling of cash through international borders.
2. Second, the use of hawala networks.
3. Third, banking networks including SWIFT and other international channels.

• But now, swift technological developments in areas of blockchain or cryptocurrencies which transcend national boundaries and international currency systems have emerged as a new channel for financing terrorist and other illegal activities.
• We are aware that terrorist organisations raise money through several sources like travel agencies, money changers, real estate, retail outlets, NGOs, charitable trusts and even from state sponsors. Terrorists also derive funding from a variety of criminal activities ranging in scale and sophistication from low-level crime to organised fraud or narcotics smuggling or illegal activities in failed states and other safe havens.

The adoption of Delhi declaration –

The Indian point of view on this was adopted by the security council as the Delhi Declaration. To quote, “the Counter-Terrorism Committee (CTC) unanimously adopted the Delhi Declaration on countering the use of new and emerging technologies for terrorist purposes… the declaration aims to cover the main concerns surrounding the abuse of drones, social media platforms, and crowdfunding, and create guidelines that will help to tackle the growing issue.”

What should be done?

• The first step in identifying and forestalling the flow of funds to terrorists is to understand the funding requirements of modern terrorist groups. The costs associated not only with conducting terrorist attacks, but also with developing and maintaining a terrorist organisation and its ideology are significant. Funds are required to promote a militant ideology, pay operatives and their families, arrange for their travel, train new members, forge documents, pay bribes, acquire weapons and stage attacks.
• Terrorists use a wide variety of methods to move money within and between organisations, including the financial sector, physical movement of cash by couriers, and movement of goods through the trade system.
• Charities and alternative remittance systems have also been used to disguise terrorist movement of funds. The adaptability and opportunism shown by terrorist organisations suggests that all methods that exist to move money around the globe are to some extent at risk.
• Only accurate and well linked financial intelligence can reveal the structure of terrorist groups and also the activities of individual terrorists. Of late, such financial intelligence from the private sector has also given significant clues to foil terrorist acts.

Conclusion –

The UN Security Council has sought to increase efforts against terror financing through UNSC resolution 2462 of 2019. It is only through such efforts that this complex issue can be addressed. India’s hosting of the “No money for terror” conference later this month should go a long way in focussing on the issue of state sponsored terror financing.

Source – The Indian Express

QUESTION – India has shown leadership in addressing the issue of ‘terrorist’ financing’ at a time when the world is going complacent with the menace of terrorism. Discuss the issue in brief and suggest a way forward.