By Amit Kumar*
Unfolding itself in a variety of ways, the menace of terrorism is being fed and furthered by money and material from across the world. To this end illicit monetary exchanges (through hawalas and other clandestine means) and production and circulation of counterfeit currency in abetting terrorism and other forms of extremist violent activities is significant.
This article puts forth recommendations on the issue of counter-terrorism finance (CTF) both at home and abroad and the ways to curb this grave challenge.
With charity beginning at home, needless to say that it is India – which has been the unfortunate target of many terror strikes ever since its independence – that one ought to begin with. Thus, the Government of India may like to designate individuals under its domestic sanctions listing provisions relating to UN Security Council Resolution 1373; currently only proscribed entities are listed under the relevant Unlawful Activities Prevention Act (UAPA) provisions. Given the lack of effective implementation of sanctions measures under UN Security Council 1267 and its successor resolutions, domestic sanctions of individuals and entities under UNSCR 1373 may be a more feasible option.
With the laws in place, it will be significant to streamline them not only at the central and state levels, but also to iron out the discrepancies that can (and which indeed have) emerged between them. Despite the intersection and overlap of terrorist financing and money laundering activity and the fact that terrorist financing under Indian statute is a predicate offence to money laundering, Counter Terrorist Finance and Money Laundering Expertise is presently resident under two separate agencies, namely the National Investigation Agency (NIA) and Enforcement Directorate (ED) respectively. The government may like to form an interagency group comprising the NIA, ED, and other law enforcement agencies at the central and state levels wherein the NIA may take the lead in investigating terrorist financing activity while the ED may take the lead in money laundering investigations.
Apart from an urgent need for intra-federal cooperation between the center and the Indian provinces, the Government of India and the state governments may need to fund extensive capacity building /training efforts in equipping law enforcement personnel with state of the art skills in investigating, identifying, tracing, and prosecuting terrorist financing activity. This is critical given the rather low rates of prosecution and conviction for terrorist financing crimes at present.
The salience of financial institutions in curbing the circulation of counterfeit currency and other illicit mints is immense. Currently a number of banks and other financial institutions are under investigation for money laundering activity by the ED. To ensure that banks are not tainted with funds relating to terrorist financing activity, terrorist financing investigations conducted by the NIA may need to look in addition into the potential misuse of banks and other financial institutions for placing, layering, and laundering terrorist funds.
Robust two-way information sharing between FIU-IND and Law Enforcement Agencies is necessary to improve the quality of financial intelligence collected by the FIU-IND from financial institutions as well as to develop near reliable terrorist financing indicators or typologies which could then be shared with banks and other financial institutions. The government may like to continue to encourage such two-way information sharing.
Given the breadth of the issue, it would be wise for a country like India to learn from the counter terror mechanisms that have been put in place by nations like the USA. In the same breath, it will be critical for countries like US to keep a major economic giant and emerging power like India in tow when defining and churning measures to check rising terrorism and the means that make it possible for it to be exported to different parts of the world. Thus, a Centre for US-India Counterterrorism Cooperation to strongly advocate India’s unique counterterrorism needs and perspectives in the US Congress, US media, and the US security industry should be established on an urgent basis. Another valuable purpose of setting up this Centre would be to encourage foreign direct investment into India by US counterterrorism equipment and hardware manufacturers and in due course to the manufacture of such equipment and hardware in India. The mere hiring of lobbying firms in Washington DC or the institution of Joint Working Groups (JWGs) does not by itself appear to be producing any major traction in tangibly advancing India’s counterterrorism interests in the US; this Centre would add great value to the existing JWG mechanism and not work at cross-purposes to it.
A challenge that has become graver since 9/11, terrorism and its proliferation through illicit money exchanges and counterfeit currency circulation are issues that have left no part of the world untouched by their presence. Given the expanse of the concern involved, while it would certainly take more than a handful of measures to nip them in the bud, a strong beginning will certainly go a long way in addressing the issue .
*Dr. Amit Kumar is the President of AAA International Security Consultants LLC, Virginia (USA) and a Visiting Fellow at the Society of Policy Studies, New Delhi. He can be reached at: [email protected]