FREE FLOW OF FUNDS SUSTAINS TERRORISM
By Dr. Bhabani Dikshit
Recently, the Jammu and Kashmir police arrested JKLF Chairman and senior
Hurriyat leader Yasin Malik under POTO at Srinagar while he was addressing a
press conference denying his involvement with two persons arrested earlier for
possessing $ 1 lakh. Malik's detention followed the arrest of a JKLF conduit
Begum Shazia, who was caught bringing the amount from Nepal, supposedly for a
Hurriyat leader. She was travelling from Jammu to Srinagar by a private vehicle
with another JKLF activist Mustaq Ahmed Dar.
It is pertinent to note that Shazia, during interrogation, admitted that she
brought the money from Kathmandu. The police maintained that she had received
the money from Altaf Qadiri, a Kashmiri hailing from Khanyar, presently in
Pakistan - occupied Kashmir (PoK) to channel funds to militant groups in Jammu &
Kashmir.
Then again close on the heels of the arrest of Yasin Malik, a joint team of the
CID branch of the J&K police and the Delhi police swooped down and searched the
Hurriyat offices at Malaviya Nagar in South Delhi and seized some documents.
Sources said that the raid on Hurriyat's office was carried out on inputs
supplied Mustaq Ahmed Dar and Shazia Rasool who were arrested for their alleged
involvement in a hawala racket.
During interrogation, Shazia Rasool disclosed that she had been to Delhi
recently and on many occasions she had contacted the Hurriyat's Malaviya Nagar
office. It is alleged that Shazia had also made calls to this office.
These occurrences and the terrorists' attack earlier on the WTC on September 11
and the FBI investigations have brought into focus the urgency to combat
terrorism effectively and as such, there has been emerging consensus towards a
concerted global initiative for blocking the sources of terrorist financing.
In case of Jammu & Kashmir, the magnitude of funds that are available to the
terrorist organizations, are astounding. The extent of financing terrorism in
J&K has been reported to be around Rs 500 crore annually. Pakistan spends around
Rs 24 crore annually to maintain terrorist activities in the Kashmir valley,
whereas India's expenditure on CI (OPS) is around Rs 750 crore annually. These
statistics show that a target country like India has also to spend on counter -
intelligence and other physical operations much more than the amount of
terrorist funding.
Controversy has also caught organizations like the All Party Hurriyat Conference
(APHC), which is alleged to have been the largest beneficiary of foreign funds
in the valley. There have been reports in the local Kashmiri press that Al Barq,
a militant organization, has charged Abdul Gani Lone, a stalwart of the APHC,
with misappropriating money given by the Inter - Services Intelligence (ISI) and
Pakistani authorities for the cause of militancy in J&K.
Besides, another functionary of the APHC in Jammu had reportedly made
allegations against his own colleagues in Kashmir about misappropriation of Rs
80 crores. Reliable sources point out that a senior Hurriyat leader has been
getting a sum of Rs 3,00,000 per month, besides a sum of about Rs 5 lakhs
collected every month as voluntary donations in the valley.
The militant organizations spearheaded their activities in the name of Jammu &
Kashmir Liberation Front (JKLF) and Hizb -ul - Mujahideen (HM) initially, but
later on Lashkar - e - Toiba (LeT) and Jaish - e - Mohammed (JeM) overshadowed
the former.
Authenticated government sources reveal that over 60 per cent of militants
currently active in J&K are said to be of foreign origin, which is a big jump
from a mere 6 per cent in 1989.
The same version also contends that upto 90 per cent of the foreign militants
are from Pakistan. Except what is collected as voluntary donations in the
valley, 90 per cent of the funding is from other countries and Islamic
organizations like the World Association of Muslim Youth, Rabit - e- Islami,
World Kashmir Freedom Movement, Kashmir American Council, Kashmir Study Group
and Friends of Kashmir, UK etc. In any case, however, the major contributor
remains Pakistan through the ISI and its High Commission in India and Nepal as
per the same version.
Even the break - up of the sources of terrorist funding in J&K has been
reportedly mentioned as : direct from Pakistan 25% , from narcotics 15%, from
illegal sale of arms 10 % , through counterfeit currency 10 %, through zakat (an
Islamic tax) and donations 10%, from international Islamic organizations and the
Organization of Islamic Countries 20 % and through extortion/bank robberies 10%.
It is known to everybody that external funding is of much greater magnitude than
the collections generated from domestic internal sources. But sometime funding
also picks up in response to certain domestic events. For example, the
demolition of the Babri Masjid in 1992 was exploited by fundamentalists to
collect large donations for terrorists operating against India.
The main sources of terrorist funds are charities, narco - terrorism, extortion
and fake currency. It is significant that the terrorist outfits operating in the
Kashmir valley get their financial sustenance from charitable donations given by
Islamic organizations and also donations by other radical Islamic sympathizers.
It is known to everybody that the nexus between narcotics trade and terrorism
has led to a lethal term called as 'naro-terrorism'. It is one of the oldest and
the most dependable sources of terrorist financing as it involves huge financial
back-up needed for both the operations.
The magnitude of drug smuggling being carried out by the terrorist outfits in
the valley can be judged from the fact that 19,450 kg of narcotics valued at Rs.
20 crore was recovered from Kashmir during 1997-98. The narcotics traffic
involving the Golden Crescent (Pakistan, Afghanistan and Iran) easily cover up
the deficits in the terrorists budget.
Though estimates of extortion seem impossible to record, yet it would be
plausible to say that crores of rupees have been extorted by terrorists from
vulnerable traders, contractors and other rich persons. For fear of life and
property, these people have parted with their valuables to buy peace. Hence,
extortion has emerged as another source of terrorist funding.
The circulation of fake currencies is also a way of life for the terrorists in
J&K. There has been a significant increase in the circulation of fake Indian
currency notes (FINCS) in the recent years. In 1995, the authorities seized
FINCS worth Rs 8,45, 000, whereas the seizure went upto Rs 3.56 crores in 2001.
The circulation of counterfeit currency aims at sabotaging the Indian economy,
on one hand, and on the other generating sufficient funds for militant
activities.
The usual mode of financing terrorism is through front companies and hawala.
Hawala system has been in existence for the last many decades in India. In
Pakistan it is known as hundi, in China fei qian (flying money), in Philippines
as black market peso exchange. In Kashmir, the terrorist operate mainly through
this underground channel.
Even Pakistan's selective crackdown on financial assets of religious extremist
organizations did not enthuse India at all, as it was merely an eyewash. During
the crackdown in Pakistan only Rs 900 was found in the Muslim Commercial Bank
account of the Jaish - e- Mohammad. The delayed freezing of 50 bank accounts by
Pakistan gave sufficient time for account holders to withdraw their money.
The vigorous efforts to block terrorist financing at national and international
levels go unabated. The UN Convention for Suppression of Financing of Terrorism
was concluded in 1999 and Britain has already a Terrorism Act 2000, followed by
the recent Prevention of Terrorism Act (POTA) of India. But there is an urgent
need to meet the challenge of terrorist financing in India in tune with other
substantially uniform laws framed in other countries.
A study of International Law Association (ILA) based in New Delhi says that the
attacks in New York by the terrorists also has triggered the adoption of
additional measures designed to prevent abuse of financial systems for financing
terrorist activities. The mandate of the ILA's financial action task force was
expanded beyond the field of money laundering to include combating terrorist
financing.
Besides ratification of UN instruments, the need for defining the financing of
terrorism and associated money laundering as a crime; freezing and confiscating
terrorist assets and reporting suspicious transactions related terrorism are of
immense significance.
It is also suggested that sanctions should be imposed for the crime committed
against persons or legal entities providing a service for transmission of money
or value, monitoring wire transfers and ensuring non- profit organizations are
not abused for financing terrorism. As a result the terrorists will be denied
access effectively to the international financial system.
The UN Security Council has already unanimously adopted resolution 1373 which
provided for governments to prevent and suppress the financing of terrorist
acts. Instances of governments having taken steps to freeze funds of Al- Qaida/Taliban
of Afghanistan are known. The US Congress has already passed the USA-Patriot
(the Uniting and Strengthening America Act by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism) Act 2001. Though India's POTA does
have some provisions against supporting terrorism in any form, and that includes
funding it, effectiveness of the new law in its final shape remains doubtful. -CNF