Economic Highlights

New Delhi, 4 December 2008

Terror Funds From Across Border

FAKE CURRENCY & CHARITY GROUPS

By Shivaji Sarkar

International Islamic terror is funded by a huge financial system. It has penetrated deep into the Indian system as well. The parallel economy has a lot to contribute to it.

There is nexus between smuggling, drug rackets, arms peddlers and hawala. Some part is played by black money also. The Financial Action Task Force (FATF), an inter-Governmental organization, to study terror finance has found that the terror masters use all financial and banking routes to support their activities. In other words, they use the international or national banking and financial systems. The FATF has been trying to cut the terror funding. So far, India is not a member of this organization.

Significantly, the terror financial mechanism extends to almost all activities. The terror outfits also raise funds from the public. Even black money is supposed to have a role in its sustenance. Besides, the role of charity and human rights organizations need to be under the scanner. It has been found that terrorists spend more on preparations so that the cost of the actual operations could be reduced, according to the FATF 2008 report.

More. The terror outfits have been investing in the Mumbai stock exchange and are stated to be active players in real estate. Their linkage with various building and construction companies needs to be probed. Does the real estate boom have a terror link?

International money laundering too has close links with terror and crime. It is estimated that 50 per cent of the US $950 billion money laundered is done by terror-related organizations. According to the UN Monitoring Committee estimates, smuggling funds 29 per cent, drugs 26 per cent, organized crime 24 per cent and financial frauds 21 per cent.

Importantly, the economics of terror extends to many activities in India. Sadly, however the Indian investigative agencies have done little either to study or penetrate these outfits. After 9/11 the US broke the funding links. The UK also has done it. But this is nowhere on the radar of our anti-terror mechanism.

Especially against the background that the Indian agencies are aware of the different modules that fund terror. The Mumbai police investigations found that the founder of the Indian Mujahideen Riyaz Bhatkal, had set-up a recruiting agency for the Gulf countries. He had recruited over 500 youth. This had earned him a huge sum both from the recruits and their employers. The agencies have not investigated whether the employers have links with terror outfits.

Not only that. The Madhya Pradesh Police found that SIMI’s chief coordinator Safdar Nagori had held a youth camp at Indore in 2007. He had set a target of raising Rs one crore through donations and charity by mobilizing the youth.

In addition, major funding comes through fake currencies purportedly printed in neighbouring countries and circulated through them. In April last, one Naushad Alam Khan was held in Dhaka with Rs 50 lakh fake Indian currency notes. Khan, it was found, was a close aide of the Harket-ul-Jihadi’s (HUJI) Bangladesh Chief Abdul Hanan. Many such fake currencies have been found in Nepal as well.

An ex-Punjab terrorist Kashmir Singh too was arrested in April with 50 kg heroin worth several crores in the international market. He is believed to be working for terror organizations. In the recent Mumbai attack, the terrorists used credit cards apart from other sources of funding.

The Taliban and Al Qaeda have always been raising funds through drug and arms peddling. It is said that it controls the drug triangle and the Myanmar-India-Afghanistan-Europe route.

Their operations reportedly have close links with different insurgent groups in Jammu & Kashmir, Manipur, ULFA and other insurgent groups in Assam and Tripura. They operate with close cooperation from their shadow organizations in Nepal and Bangladesh.

Additionally, the Naxalites get arms from myriad sources including China, Pakistan and Afghanistan. Not much study has been done of the finances of the Naxalites. Mere extortions and the poor-exploited people do not fund the billions of rupees spent by the Naxalites in their operations.

The US Commission for Studying the Funding Pattern of Terrorists has come out with a 155-page report. According to the US Federal Bureau of Investigation terrorists in the US have used almost all the available financial services at one time or the other. The US could confiscate properties worth US $850,000 having links to the Al Qaeda and related terror organizations.

The Commission revealed another pattern: terror outfits are acquiring properties and possibly are even active players in the real estate business. The US Administration is looking into the sub-prime crisis from this angle as well. It is also trying to find out how the penetration of these organizations had affected its economy.

Various estimates suggest that terror outfits spent about US $750,000 on eight operations. The US security agencies estimated, as per a Washington Times report on Nov 18 2001, that the 9/11 World Trade Centre attacks cost the terror outfits US $500,000. The UK home office said that the 7/7/2005 London transport system attacks cost the terrorists British pound 8,000. In 2004, the UN Monitoring Team estimated that the Madrid train blast cost US $10,000; the Istanbul truck blasts US $40,000; Jakarta Marriott Hotel blast US $30,000; Bali explosions US $50,000; and the attacks on the US embassies in Kenya and Tanzania US $50,000.

Clearly, India needs to do a study on the terror financial resources and swoop down on it. It needs a detailed and specific study to pinpoint the lacunae in the legal and financial system so that such funding could be throttled. ---INFA

(Copyright, India News and Feature Alliance)