Efforts in curbing Terror Financing


    In News 

    The Third Ministerial ‘No Money for Terror’ Conference scheduled to be held next week will further India’s efforts to build understanding and cooperation among nations on this issue.

    What is Terrorist financing?

    • It involves the solicitation, collection or provision of funds with the intention that they may be used to support terrorist acts or organizations. 
    • Terrorist financing encompasses the means and methods used by terrorist organizations to finance their activities. 

    Channels for terror financing 

    • The global flow of funds for nefarious purposes has three traditional channels.
      • Direct smuggling of cash through international borders.
      • The use of hawala networks. 
      • Banking networks including SWIFT and other international channels.
        •  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.
    • 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.
    • Charities and alternative remittance systems have also been used to disguise terrorist movement of funds.

    Concerns /Challenges 

    • Globally, countries have been affected by terrorism and militancy for several years. The pattern of violence differs in most theatres, but is largely engendered by a tumultuous geo-political environment, coupled with prolonged armed sectarian conflicts. Such conflicts often lead to poor governance, political instability, economic deprivation and large ungoverned spaces. 
      • The involvement of a compliant State often exacerbates terrorism, especially its financing.
    • The spectre of terrorist violence looms large over the world.
    •  Amorphous terror groups, newer cyber linked methods of recruitment of radical elements, the increasingly lethal lone wolf attacks are all adding to the ominous threats emanating from extremist violent elements.

    Indian Scenario 

    • India has suffered several forms of terrorism and its financing over more than three decades, hence it understands the pain and trauma of similarly impacted nations. 
    •  India has borne the brunt of terrorism and has witnessed serious loss of life and property in senseless violent explosions in large cities in the past few decades.
      • The dastardly efforts to radicalise and mislead the youth create a schism in society.
    • Preventing terrorists from accessing financial resources is crucial to successfully counter the threat of terrorism. 
      • However, many States lack the legal and operational frameworks and technical expertise needed to detect, investigate and prosecute terrorist financing cases.

    Efforts to handle them 

    • In order to display solidarity with peace-loving nations and to help create a bridge for sustained cooperation on countering terrorist financing, India was host to two global events in October –
      •  the annual General Assembly of the Interpol in Delhi and 
      • a special session of the UN Counter Terrorism Committee in Mumbai and Delhi. 
        • It unanimously adopted the Delhi Declaration calling on all member-states to ensure zero tolerance towards terrorism.
      • India will host another global conference named as ‘No Money for Terror’ Conference which is focussed only on Countering Financing of Terrorism (CFT).
    • In the third week of November, India will host another global conference focussed only on Countering Financing of Terrorism (CFT).
    • India has largely articulated its “zero tolerance approach” towards terrorism in these conferences and tried to attract the attention to the cross-border terrorism from Pakistan.

    International Efforts 

    • The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
    • 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.
    • The Terrorism Prevention Branch (TPB) of the United Nations Office on Drugs and Crime (UNODC) works on the legal aspects of countering the financing of terrorism, including promoting the ratification of the relevant universal legal instruments, in particular the International Convention for the Suppression of the Financing of Terrorism (1999), and the implementation of these international standards. 

    Suggestions and Way Forward 

    • The first step in identifying and forestalling the flow of funds to terrorists is to understand the funding requirements of modern terrorist groups.
    • 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.
    • 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
    • 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.

    Mains Practice Question 

    [Q] Discuss  potential threats of Terror Financing and Elaborate measures to tackle the problem of Terror  Financing both at national and international levels.