By admin March 29, 2019 10:22

The Big Picture – Crackdown on Terror Funding

The UN Security Council has ordered countries to step up the fight against terror financing by ensuring they have laws to make it a serious crime. Unanimously adopting the French-drafted resolution, it called on nations to ensure that their domestic laws and regulations establish serious criminal offenses" to prosecute those who collect funds or provide economic resources to terror organisations or terrorists. The resolution, which can be enforced with sanctions, also urges countries to establish financial intelligence units to strengthen efforts to track terrorist financing and to share information on their investigations. The binding resolution was drafted under chapter 7 of the UN Charter, which means it can be enforced with sanctions. This is the first standalone measure dedicated specifically to counter the financing of terrorism. India, which has been pushing for action against countries that support terror in its offensive against Pakistan, welcomed the move but said effective implementation was key.

What are the challenges in implementing sanctions?

  • It needs to be seen how many countries would implement the resolution.
  • Countries like Pakistan become apologetic for terrorism saying it is difficult to control terror funding as it is a cash-based economy.
  • Pakistan finds an escape every time something is raised against it as it is backed by countries like China.
  • Also, the terrorist organisations are always one step ahead in circumventing such sanctions.
  • Vienna convention 1988, Basel norms 1989 and FATF were established in 1989 but little effect on money laundering.
  • India also established Prevention of Money Laundering in 2012 with its Financial Intelligence Units to coordinate with other countries on terror funding.
  • The terror groups move money in layers in the international market which is not easily traceable especially when they are moved through tax heavens. So, unless all countries coordinate effectively, implementation would be difficult.
  • Terrorism has not yet been defined by the UN. So, the meaning of terror funding also becomes ambiguous.
  • Even though terror outfits are listed by organisations and countries, they change their name overnight and start all over again or function as charity organisations. So, the naming of the terrorist organisation also becomes fruitless.
  • Pakistan connives with terror groups and offers them state protection which is the gravest problem.

Where do the terrorist organisations get funds from?

  • Terror groups depend on businesses which are cash intensive to generate funds.
  • In Pakistan, funds are given by the State to promote terrorism against India.
  • Terror groups which function as charity organisations get funds from abroad especially Saudi Arabia.
  • Much of the funds from the charity organisations are used for the promotion of extreme forms of Islam like Wahabism or Salafism thus leading to the recruitment of terrorists. Funds are also given to the separatists and terrorists in J&K.
  • Funds are received as zakat funds and form a good part of terror funds.
  • For local level operations, terror organisations obtain funds through looting ATMs and other local activities like drug sale, illegal currency etc.

Who will make laws and monitor them?

  • The primary responsibility of the Financial Action Task Force is to monitor the implementation of laws by countries being monitored by it.
  • There are regional organisations like the European Commission which has its own blacklist and greylist.

What can be done?

  • The resolution passed by the UN should be implemented by all the countries.
  • The FATF can play a crucial role in forcing Pakistan to control the terror groups in Pakistan by monitoring it continuously.
  • Finance is the root of terrorism. So, the curtailment of terrorism requires funding to be controlled.
  • Political will to go after the terrorists plays a major part in controlling or eliminating terrorist organisations by cracking down on their source of funding and seizing their properties.
  • Steps can be taken to control zakat funds by having a central organisation where the funds would be collected and then disbursing it as per requirements from the central organisation.

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By admin March 29, 2019 10:22