RSTV: THE BIG PICTURE- UNITED AGAINST TERROR FUNDING
Introduction:
The Enforcement Directorate said it has attached over a dozen assets in Jammu and Kashmir in a terror financing case against Pakistan-based terrorist and chief of the globally banned Hizbul Mujahideen, Syed Salahuddin. The central probe agency issued a provisional order under the Prevention of Money Laundering Act (PMLA) to attach 13 properties, worth Rs 1.22 crore, in the state. Germany had initiated a move at the European Union to designate Jaish-e-Mohammed chief Masood Azhar as a global terrorist; days after China blocked a bid at the United Nations to ban him. Media reports claimed Germany was in touch with several member nations of the European Union for listing Azhar as a terrorist which will result in his travel ban as well as freezing of his assets in the 28 countries of the bloc. France imposed financial sanctions on Azhar and said it will work with its European partners for putting the JeM chief’s name on the EU list of persons and entities involved in terrorist acts.
Terrorists require money to operate. Without funding, they cannot purchase weapons, equipment, supplies, or services. The source of terrorist funds may be licit or illicit, and funding often takes the form of multiple small donations, rather than one large sum of money. Terrorist groups may be directly or indirectly linked to organized criminal groups and may engage in criminal activities, including drugs or arms trafficking, extortion, and kidnapping for ransom. Terrorism financing is a global phenomenon that not only threatens Member States’ security, but can also undermine economic development and financial market stability. It is therefore of paramount importance to stem the flow of funds to terrorists.
Building on the International Convention for the Suppression of the Financing of Terrorism (1999), Security Council resolution 1373 (2001), calls on States to prevent and suppress the financing of terrorism, inter alia, by criminalizing the collection and provision of funds for terrorist purposes, and urges them to set up effective mechanisms to freeze funds and other financial assets of persons involved in or associated with terrorism, as well as to prevent those funds from being made available to terrorists. The Financial Action Task Force (FATF) has also developed detailed recommendations on countering terrorism financing..
The freezing of terrorist assets is a highly effective way for Member States to stem the flow of funds. It can also act as a deterrent to further engagement in terrorist activity. However, in conducting assessments on behalf of the Counter-Terrorism Committee, the Counter-Terrorism Committee Executive Directorate (CTED) has become aware of the many challenges faced by Member States in implementing effective freezing mechanisms. As a facilitator of technical assistance delivery, CTED organizes expert workshops around the world to help States establish effective freezing mechanisms that are consistent with international standards and obligations, including relevant human rights obligations. CTED also helps States to counter the misuse of non-profit organizations (NPOs) and alternative remittance systems (ARS) for terrorist-financing purposes and to detect and prevent illicit cross-border transportation of currency (a significant problem in cash-based economies).
In order to tackle terrorism financing effectively, it is essential that Member States cooperate regionally and internationally, including through the exchange of operational information by relevant entities, especially national financial intelligence units (FIUs). It is also essential that investigation of terrorism cases at the national level include the terrorist-financing element.
In carrying out its tasks, CTED works closely with relevant United Nations entities and coordinates its activities with those of external partners, including FATF and the FATF-Style Regional Bodies (FSRBs). Within the framework of the Counter-Terrorism Implementation Task Force (CTITF), CTED is a member of the Working Group on Countering the Financing of Terrorism.
Terror Financing:
- Financing of terrorism is a mixture of both legal (provided by state support) and illegal money (Hawala channels, counterfeit, donations like from Gulf countries, etc). This needs to be controlled, to counter terrorism.
- It is difficult to break the financial connection of these terror groups as money is fungible and has high liquidity.
- Steps like demonetisation are appreciable to check counterfeit money, black money, etc up to some extent. Moving towards a cashless society can be more helpful to keep a track of all the remittances.
- But, in the age of increasing technology, there still exist other payment systems like digital currency (virtual currency, blockchain and cryptocurrency like Bitcoin). They pose challenges for financial regulators and ministries.
- Some multilateral agreement needs to be made to have a better control over these globally distributed currencies with almost zero barriers.
The importance of combating terrorist financing:
- Terrorists need money and other assets, for weapons but also training, travel and accommodation to plan and execute their attacks and develop as an organisation.
- Disrupting and preventing these terrorism-related financial flows and transactions is one of the most effective ways to fight terrorism.
- Not only can it prevent future attacks by disrupting their material support, the footprints of their purchases, withdrawals and other financial transactions can provide valuable information for ongoing investigations.
- Countering terrorism financing is therefore an essential part of the global fight against terror threat.
- As terrorists and terrorist groups continue to raise money with use of various means, countries must make it a priority to understand the risks they face from terrorist financing and develop policy responses to all aspects of it
The Government has taken various steps to combat terror financing in the country:
- Strengthening the provisions in the Unlawful Activities (Prevention) Act, 1967 to combat terror financing by criminalizing the production or smuggling or circulation of high quality counterfeit Indian currency as a terrorist act and enlarge the scope of proceeds of terrorism to include any property intended to be used for terrorism.
- A Terror Funding and Fake Currency (TFFC) Cell has been constituted in National Investigation Agency (NIA) to conduct focused investigation of terror funding and fake currency cases.
- An advisory on terror financing has been issued in April 2018 to States/ Union Territories. Guidelines have also been issued in March, 2019 to States/ Union Territories for investigation of cases of high quality counterfeit Indian currency notes.
- Training programmes are regularly conducted for the State Police personnel on issues relating to combating terrorist financing.
- Fake Indian Currency Notes (FICN) network is one of the channels of terror financing in India. FICN Coordination Group (FCORD) has been formed by the Ministry of Home Affairs to share intelligence/information among the security agencies of the states/centre to counter the problem of circulation of fake currency notes.
- Intelligence and security agencies of Centre and States work in tandem to keep a close watch on the elements involved in terror funding activities and take action as per law.
Way Forward:
- Terror financing goes to the root of terrorism, no terror activities can be carried out without funds so if we stop this funding their activities will not happen.
- Sustained national and international effort is required.
- Our law should be strengthened to deal with such sorts.
- Countries should coordinate their actions together.
- India has been able to convince the world that global efforts are needed for the same and should continue it.
- World should come together and first decide the definition of terrorism.
- India’s approach is quite sensible, it has been developing coalition to fight against terror financing.
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