Model Answer
0 min readIntroduction
Terrorism, a significant threat to national security, is often fueled by financial resources. India has been grappling with terror funding from various sources, both internal and external. The Financial Action Task Force (FATF) has consistently highlighted the need for robust measures to combat terror financing globally. Recently, in November 2022, New Delhi hosted the ‘No Money for Terror’ (NMFT) conference, signifying India’s commitment to leading the global fight against terror financing. This conference aimed to strengthen international cooperation and share best practices in disrupting the financial networks supporting terrorism.
Major Sources of Terror Funding in India
Terror funding in India originates from a diverse range of sources, which can be broadly categorized as follows:
- State Sponsors: Primarily, Pakistan’s Inter-Services Intelligence (ISI) has been implicated in providing financial support to terrorist organizations operating in India, particularly in Jammu and Kashmir. This includes direct funding, logistical support, and facilitating cross-border movement of funds.
- Hawala Networks: Informal value transfer systems like Hawala are extensively used to channel funds without leaving a traceable audit trail. These networks operate across borders, making it difficult to track the origin and destination of funds.
- Drug Trafficking: The proceeds from drug trafficking, particularly opium and heroin originating from Afghanistan and Pakistan, are a significant source of funding for terrorist groups.
- Fake Indian Currency Notes (FICN): Circulation of FICN, often supported by inimical agencies, destabilizes the Indian economy and provides funds for terrorist activities.
- Charitable Organizations & NGOs: Some ostensibly charitable organizations and NGOs are misused as fronts for collecting and diverting funds to terrorist organizations.
- Cryptocurrency: The anonymity offered by cryptocurrencies is increasingly being exploited by terrorist groups to raise and transfer funds.
- Criminal Activities: Extortion, kidnapping for ransom, and bank robberies are also used to generate funds for terrorist activities, particularly by local terrorist groups.
Efforts to Curtail Terror Funding
The Indian government has implemented several measures to counter terror funding:
- Legislative Framework: The Unlawful Activities (Prevention) Act (UAPA), 1967, amended in 2019, provides a legal framework to designate individuals and organizations as terrorists and to seize their assets. The Prevention of Money Laundering Act (PMLA), 2002, is used to investigate and prosecute cases of money laundering linked to terrorism.
- Financial Intelligence Unit – India (FIU-IND): FIU-IND serves as the national center for receiving, analyzing, and disseminating financial intelligence related to terror financing and money laundering.
- National Investigation Agency (NIA): The NIA is the primary agency responsible for investigating terror-related crimes, including those involving terror funding.
- Multi-Agency Coordination: Regular meetings and information sharing between intelligence agencies, law enforcement agencies, and financial institutions are crucial for effective counter-terror financing efforts.
- International Cooperation: India actively collaborates with international organizations like the FATF and the United Nations Counter-Terrorism Committee (CTC) to share information and coordinate efforts to combat terror financing.
- Asset Seizure & Confiscation: The government has been actively seizing and confiscating assets linked to terrorist organizations and individuals.
‘No Money for Terror’ (NMFT) Conference – November 2022
The NMFT Conference, hosted by India in November 2022, aimed to:
- Enhance Global Cooperation: Foster greater international cooperation in disrupting the financial networks supporting terrorism.
- Share Best Practices: Share best practices and strategies for countering terror financing, including the use of technology and intelligence sharing.
- Capacity Building: Strengthen the capacity of countries to detect and prevent terror financing.
- Focus on Emerging Threats: Address emerging threats related to terror financing, such as the use of cryptocurrencies and online platforms.
- Promote Legal Frameworks: Encourage the adoption of robust legal frameworks to criminalize terror financing and facilitate asset seizure.
The conference saw participation from representatives from over 70 countries and international organizations, demonstrating India’s growing leadership role in the global fight against terrorism. A key outcome was the Delhi Declaration, which reaffirmed the commitment of participating countries to combat terror financing and enhance international cooperation.
Conclusion
Combating terror funding requires a sustained and multi-pronged approach. While India has made significant strides in strengthening its legal framework and enhancing its counter-terror financing capabilities, continued vigilance and international cooperation are essential. The NMFT Conference underscored India’s commitment to leading this global effort, but sustained action is needed to disrupt the financial networks that fuel terrorism and ensure national security. Focusing on emerging technologies and strengthening financial intelligence gathering will be crucial in the future.
Answer Length
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