New Delhi: Pakistan-based terrorist groups Jaish-e-Mohammed (JeM) and Lashkar-e-Tayyiba (LeT) were reportedly using sham non-profit organisations to raise and move funds for terror financing, Financial Action Task Force (FATF) said in its latest report.
JeM, designated a terrorist organisation by the UN, the US, the UK and India, was involved in the 2001 Parliament attack and the Pulwama attack in 2019, while LeT was responsible for the 2008 Mumbai attacks. Both the groups are associated with Al-Qaeda (AQ), which was responsible for the 9/11 attack.
The global agency that develops policies to combat money laundering and terrorism financing said fundraising campaigns are conducted by such non-profit organisations through social media, direct messaging, offline and online campaigns, and crowdfunding.
FATF’s report titled ‘Comprehensive Update on Terrorist Financing Risks’ also said that these non-profit organisations or NPOs involved in terror financing with or without their knowledge can be outside the regional control of the terrorist group or be those founded in the areas under their control.
Sham NPOs are set up or registered knowingly for the purpose of terror financing and used to raise, store, and move funds, commonly under false charitable pretexts, the report said.
“For example, in East Asia, JeM, and Lashkar-e-Tayyiba (LeT) both associated with AQ, were reported to abuse humanitarian assistance donation programs using sham NPOs to divert funds and finance operational activities,” the report said.
“Funds tend to flow through banks, other financial institutions, and unlicensed money value transfer services (MVTS). In the end, funds are often converted to cash and logistical assets and services,” said the FATF report.
A person informed about the development said it is for the first time that the concept of state-sponsored terrorism has been introduced in an international report.
State-sponsored terrorism means a state actively financing terrorist activities as part of its state policy. India had identified state sponsored terrorism from Pakistan as a source of terrorist financing risk and the finding of the FATF report reinforces India’s position, the person said, requesting anonymity.
The report highlighted that over the past decade, terrorists have demonstrated a persistent ability to exploit the international financial system to support their activities and carry out attacks.
While the methods they employ can vary widely, the overall trend underscores their adaptability and determination. “This continued abuse of the financial system poses a serious threat to global security and undermines international peace,” the report said.
Earlier this month, FATF had condemned the 22 April terror attack in Jammu & Kashmir in which 26 tourists were killed.
The Paris-headquartered agency’s comments came in the wake of India’s efforts to put global pressure on Pakistan, which it holds responsible for the terrorist attack in Pahalgam.
The FATF report pointed out that storage of gold or jewellery is also reported on rarer occasions as a means of terror financing, adding that individuals inspired by terrorist outfits can use this storage method for small funds, either keeping assets themselves or having relatives hide them.
FATF also highlighted the use of e-commerce platforms by terrorists in procuring materials for attacks.
The report cited the February 2019 suicide bombing of a convoy of Indian security forces by Jaish-e-Mohammed, in which forty soldiers were killed. A key component of the improvised explosive device used in the attack— aluminium powder—was procured through e-commerce, the report said.