Preventing terrorists from accessing financial resources is crucial for countering the threat of terrorism. In this light, discuss the various means and methods used by terrorists to fund their activities. What measures have been taken by the government to tackle the menace of terror financing?
(GS-3, Internal Security, 250 words)
Approach:
- Introduce your answer by defining terror financing.
- In the body, mention various means and measures used by terrorist organisations to fund their activities. Also, elaborate on the measures taken by the government to tackle the menace of terror financing.
- Conclude your answer appropriately.
Model Answer:
Terrorist financing involves the solicitation, collection or provision of funds with the intention that they may be used to support terrorist acts or organizations. Funds may stem from both legal and illicit sources. Terrorists require financing to recruit and support members, maintain logistics hubs, and conduct operations. Therefore, financing of terrorism is more dangerous than terrorism itself to a nation’s peace and security.
Means and methods used by the terrorists to fund their activities include:
- Legal sources: The funds may come from legal sources, such as legitimate businesses, government funding, and religious or cultural organizations.
- Funds from criminal activities: The funds may also come from illegal sources, such as drug trafficking, kidnapping, and government corruption. Terrorists may also use funds from the distribution of narcotics, black market oil etc e.g., ISIS is known to use black market oil distribution as a means of funding their terrorist activity.
- Money laundering: Money laundering occurs when criminals disguise their wealth and assets’ illegal origins to avoid suspicion from law enforcement agencies and prevent incriminating evidence. Money laundering and terrorism financing are often linked. When law enforcement is able to detect and prevent money laundering activities, it may also be preventing those funds from being used to finance acts of terror.
- Use of Non-profit Organizations (NPO): NPOs are also among the many vehicles that have been identified as being potentially vulnerable to terrorism financing abuse. This occurs in the form of diversion of donations through affiliated individuals to terrorists, and the creation of ‘false representation and sham NPOs’ through misrepresentation/fraud.
- Fund raised through social media: Terrorist organizations use propaganda in order to rally financial support from those who follow them. E.g.: Al-Qaeda is a known terrorist organization that has used the internet in order to finance their organization.
- Emerging technologies: Virtual currencies, such as bitcoin, wallets etc. have attracted the attention of various criminal groups, and have emerged as new channels for terror financing.
Measures taken by the government to tackle the menace of terror financing include:
- Strengthening the provisions in the Unlawful Activities (Prevention) Act, of 1967, to combat terror financing by criminalizing the production, smuggling or circulation of high-quality counterfeit Indian currency as a terrorist act. Further, the scope of proceeds of terrorism has also been enlarged to include any property intended to be used for terrorism.
- A Terror Funding and Fake Currency (TFFC) Cell has been constituted in the National Investigation Agency (NIA) to conduct a focused investigation of terror funding and fake currency cases.
- Training programmes are regularly conducted for the State Police personnel on issues relating to combating terrorist financing.
- The Fake Indian Currency Notes (FICN) network is one of the channels of terror financing in India. FICN Coordination Group (FCORD), formed by the Ministry of Home Affairs, shares intelligence/information among the various security agencies of the states/centre.
- India hosted the No Money for Terror Conference and emphasised that the most effective strategy to deal with terrorism is international coordination and real-time and transparent cooperation among nations.
- Delhi declaration aims at countering the use of new and emerging technologies for terrorist purposes. UN’s Counter-Terrorism Committee (CTC) has adopted the Delhi Declaration that covers the concerns regarding the use of social media, crowdfunding, etc. for the purpose of terrorism.
- India has also been pushing its concerns regarding securing digital public infrastructure, challenges posed by the darknet and crypto-currencies and collective measures to counter money laundering and terrorism financing in various international forums, including the G20, Interpol and UN.
Therefore, understanding how all types of terrorist organisations need, use and manage funds is critical in detecting, preventing, and sanctioning terrorists and terror financing activity. Further cooperation among countries in areas such as extradition, prosecution, intelligence sharing, capacity building and Combating the Financing of Terrorism (CFT) is the need of the hour.
