FATF Report Highlights Terror Financing Threats In India From ISIL and Al-Qaeda Groups

A recent report by the Financial Action Task Force (FATF) underscores that India’s most significant terrorism financing threats primarily stem from ISIL and Al-Qaeda-linked groups operating in and around Jammu and Kashmir. The report reveals that external sources are the predominant contributors to terror financing in four of India’s six conflict zones.

The FATF, which is responsible for developing policies to combat money laundering and terrorist financing, notes that India has faced persistent terrorism challenges since its independence in 1947. The report categorizes these threats into six key theatres, highlighting extremist groups in Jammu and Kashmir, other regional insurgencies, and left-wing extremist movements.

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Key findings of the report include:

Diverse Funding Sources

The assessment identifies various methods of terror financing, such as extortion, organized crime, the misuse of non-profit organizations (NPOs), and the circulation of fake currency. It also points to the rising trend of using virtual assets, complicating tracking efforts.

NPOs and Radicalization

The report draws attention to the abuse of NPOs, which have been linked to terrorist organizations and receive foreign funding under the guise of charitable activities.

Government Initiatives

Additionally, the FATF commended the Indian government for its counter-radicalization programs, including the ‘Sahi Raasta’ initiative launched in 2022, aimed at deterring youth from radicalization in conflict-prone areas.

Effective Investigations

The National Investigative Agency (NIA) and Enforcement Directorate (ED) received appreciations in tracing financial trails linked to terrorist activities, demonstrating a solid grasp of both current and emerging terror financing threats.

The report concludes that India has achieved a “high level of technical compliance” with FATF recommendations and has made substantial progress in implementing measures to combat illicit finance. It emphasizes the importance of cooperation among domestic and international authorities to enhance financial intelligence and deprive criminals of their assets.