CHOKING TERRORIST FINANCING: A MUCH NEEDED STEP

Hybrid wars are protracted and cannot be fought in isolation by a single agency. To outsource such wars to security forces is a bad idea to pursue because it cannot be taken to logical conclusion without the whole of government approach. Security forces can check only violence and bring it down to a sustainable level by use of kinetic means. But it cannot squeeze the source of energy that sustains the violent movement or extinguish it completely. There is no denying the fact that such movements are often abetted supported and sustained by external agencies but there are areas of unregulated public and private space that gives impetus to such asymmetric forces to survive and sustain itself to pursue their own agendas. To raise an organisation and gangs of thugs there should be incentive in terms of cause, motivation (indoctrination) and financial remuneration. They are complementary to each other but ultimately such movements are sustained by a stable financial support. It is important to ascertain the source of funds and how smooth flow is maintained to give impetus to terrorism and hybrid war. Post 9/11 President George Bush declared, “Money is the lifeblood of terrorist operations… we have launched a strike on the financial foundation of the global terror network.” It is a fact that terror organisations do not survive on one source of financial support rather they keep multiple options so that if one dries up another remains open. The range of financial sustenance is, drug trafficking, investment in financial institutions under pseudo business names, real estate, money laundering, extortion, kidnapping, donations through NGOs/ religious institutions, fake currency rackets, hawala, illegal betting, electioneering and political patronage. Interventions in the financial spheres are required to dry up sources of funding to curb terrorism, hybrid war and crime syndicates. These include international cooperation, strict implementation of laws, tight

IT IS ESTIMATED THAT PAKISTAN ALONE HAS PUMPED CLOSE TO 40,000 CRORE RUPEES OF FICN (FAKE INDIAN CURRENCY NOTES) INTO THE INDIAN MARKET. THE ROUTE OF PUMPING THE FICN IS THROUGH ORGANISED SYNDICATES RUN BY DAOUD IBRAHIM, HAWALA, BETTING AND PUSHING FICN THROUGH KASHMIR, NEPAL AND BANGLADESH.

control on financial markets through regulators, technological support to identify the fake currency and electronic transactions.

Insurgency in the Northeast, left wing extremism (LWE) and separatists movement in J&K are thriving in the absence of strict implementations of laws related to money laundering, drug trafficking and spread of FICN. It is estimated that Pakistan alone has pumped close to 40,000 crore rupees of FICN (Fake Indian Currency Notes) into the Indian market. The route of pumping the FICN is through organised syndicates run by Daoud Ibrahim, hawala, betting and pushing FICN through Kashmir, Nepal and Bangladesh. It is true that such operations cannot be executed without connivance of unscrupulous agents and at times wilful dereliction of duty by those who are supposed to prevent it. The system is eroded to the extent that it is very difficult to take actions against defaulters and economic offenders. India has a very poor record of bringing economic offenders to book. Similarly, in spite of the open cultivation of opium and cannabis, narcotic bureau is unable to prevent sale of opium and drugs in the Northeast. Where FICN is almost a legal tender, drugs are purchased and sold without mush restriction, economic offenders allowed to escape from the clutches of law and economic offenders continue to be in legislature, such a situation is conducive and creates friendly environment for non-state actors to exploit them to further their cause.

The difference between separatists movement in J&K and Northeast is that in the North-East insurgency is an industry and a source of parallel economy, but dynamics of J&K are different. Bulk of support to initiate acts of terror comes from Pakistan including resources, weapons, ammunition and war like stores. Even remuneration to terrorists and their families is also paid by ISI through Pak based organisations. Let us clearly distinguish between acts of terror and separatist’s movement. Money laundering or circulation of FICN does not play a big role in act of terrorism. Role of money comes in to play in separatist’s movement or Intifada. Blood money/ black money/ FICN is contributing immensely to shape the ground situation to create instability especially in J&K and even in Northeast and heartland India.

Organisations such as Jamaat-e-Islami, Peace TV and many Wahhabi Madrasas are thriving and undertaking activities to subvert and radicalise impressionable youths. The funding is coming from various sources through Pakistan by land route, hawala, NGOs, foreign donation and even through criminal syndicates. This bulk of the money comes from Islamic nations but primarily from Saudi Arabia. Separatist’s movement in J&K is sustained by regular flow of money from across in various forms. Intifada in J&K is actually by force, coercion and money power. Children, women and middle age group are engaged in new profession that is taking the youth away and elders away from education and skill development.

It is estimated that the parallel economy run by Naga groups alone is in the range of Rs 2000-2500 crore per year, generated through drugs, sale of weapons, extortion, real estate, equity and sale of contrabands from across the border. Similarly each of the groups have their own network and area of influence. Inter group clashes are less on ideological ground but more for control of territory to take charge of parallel economy. Naga- Kuki clashes in late 90s were not due to clash of ideology but for control of Tamu -More Haats. In other parts, the conflict between groups is to control the highways and international borders to ensure collection of taxes, extortion, illegal trade across the border and routes of drug trafficking.

Jamaat-e-islami has been rattled in Bengal and some other states because government actions have seriously impacted their financial foundation. It is a point to ponder why there is serious resistance from certain states to ensureimplementation of demonetisation? Is it really hurting the people or has it hurt the actors behind the scene such as Jamaat-e-Islami and Wahhabi Madrasas. Bangladesh has come down heavily on Jamaat and thus it is not possible for them to openly undertake their activities of radicalisation of population. As a result they have found safe havens in India including Bengal and certain other states. As per NIA, Bengal is emerging as the hub of activities of Jamaat-e-Islami and Jihadi groups operating on both sides of the borders. Bengal being a pivot state that gives Jamaat access to make inroads into Northeast, Red Corridor, Bihar, Bangladesh and Nepal. Therefore, this pivot state needs to be handled carefully and urgently to restrict and then eliminate the activities that are not in the best interests of the country.

Demonetisation has given a death blow to the parallel economy and it has seriously impacted the financial support to terror organisations, insurgents, criminal syndicates and their proxies. It is a great initiative provided the government is able to continue to squeeze the fund flow and shake up the law enforcing agencies to prevent creation of black money in future. It is a surgery that needs postoperative treatment, but will the political parties and state governments be willing to take up the cudgels and invite the wrath of terror organisations, communal forces, over ground workers and political parties? One time strike is a temporary setback unless it is followed by concrete measures to reduce transactions in cash. Government has made the beginning and leaving it half way will be a bigger problem to handle in future. Some suggestions on what needs to be done to reduce cash holdings are as under:

• Make it mandatory for all transactions of value in excess of Rs 10,000 to be cashless. Such transactions must be conducted only through cheques, bank drafts, credit/debit cards etc.

• Impose limits on the amount of cash that can be held by an individual. Holding of cash in excess of that amount should be made a cognisable offence, inviting punishment to include mandatory confiscation of money found in excess of authorised holdings.This limit could be pegged at Rs 150,000 per individual/ family.

• All government transactions should be cashless. A beginning has been made in this regard, but it should spread to all government departments. Within the Armed Forces too, cash should be discouraged in CSDs, and in payment of bills. Pay of men should be credited directly to their bank accounts as is being done in the case of officers. • Payment to employees, farm produce and government subsidies should be cashless and made direct to the account holder. • All traders small, medium and large should be encouraged to accept payment through cards or electronic transfer. • A major source of corruption is funding for political parties. Here, cash donations are accepted and no record of the donor is required to be maintained for small sums. Political funding requires major reform and a start could be made by making it mandatory for political parties to receive funds only through cheques or through electronic transfer of money. Making political donations cashless would curb the spread of black money to a very large extent and would cleanse the political system too. Such a step will be resisted by all political parties, but it is a must for a cleaner and healthier polity.

It is a fact that hard earned money is never used in drug trafficking, weapons trafficking, extortion, crime, betting and acts of terror; it is either black money or FICN. No one knows the impact of black money and FICN more than the security forces because they pay the price of political mismanagement of financial market through their blood. Be it separatists’ movement in Kashmir, LWE and insurgency in Northeast. Every bullet purchased through the black money generated by non-state actors or antisocial organisations has the potential to spill the blood of a soldier in some remote part of India. There is a need to sensitise the law enforcing agencies to remind them that every penny you allow to be generated as black money will take life of a soldier or policeman somewhere in the country. Therefore, he or she is guilty of murder of fellow Indians. Demonetisation of currency of Rs 1000 and Rs 500 has struck a body blow to terrorist organisations as in one go, the entire FICN apparatus has been uprooted. But such structures do not take time to reinvent themselves. Additional steps are required to be taken to ensure the cancer of black money and FICN is not allowed to grow again. This is a war which India has to fight within its borders and it is war which India has to win, if it is to find its rightful place in the comity of nations.

Brig Narender Kumar, an Infantry Officer, commanded a Rashtriya Rifles Battalion in J&K and Assam Rifle Sector in Manipur. He is a Delhi based Defence Analyst and is currently Senior Fellow at the Centre for Land Warfare Studies (CLAWS), New Delhi.

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