Terror Funding – A Study to Analyze How Terrorist Outfits Acquire and Mobilize Their Funds

INTRODUCTION
For decades now terrorism and insurgency have continued to be the head turners. Over the last few years, discussions related to terrorism and trans-national crimes have been at the epicenter. Be it the rise and fall of the Taliban in Afghanistan, the atrocities carried out by Boko Haram in Nigeria, the establishment and the overthrowing of the Islamic State Caliphate by the Kurdish rebels (forces) or the vehement propaganda of killing the innocents by the JEM and LET have continuously asked for great attention by the global leaders.
No one can be oblivious of those terms. While most of the earlier discussions at various summits or gatherings by the leaders would revolve mainly around the approach, the modus operandi, the tactics, the radicalization methodologies; of late people have started discussing the financial capabilities of a terror outfit. It has taken the Eastern leaders a little longer than their western counterparts to put in efforts to identify and curb the most essential element of any organization – THE CONSTANT FLOW OF FUND.
TERROR FUNDING
The term terror funding refers to the process of raising finances by a terror outfit. The finance may not always be raised to execute an event but for many preliminary and auxiliary purposes like cadre training, acquisition of vehicles, movement of arms and weapons, purchasing latest gadgets and so on. The illegal modes of fund raise may include human and drug trafficking, extortion, kidnapping, oil and hydrocarbon theft or nexus with syndicate criminals. Terrorists move their funds through formal or informal banking channels, hawalas and hundis and/or physical movement of assets, cash, gold through illegal routes.
• Hawala – This system was originated in India but now being used worldwide. It generally includes more than 3 parties the sender, the 1st intermediary, the 2nd intermediary and the receiver. The sender trusts only the 1st intermediary for sending the money to the receiver. This method can be referred to as ‘transfer of money without movement of money’.
• Hundis – Again this term was coined in India itself in ancient times. It is an instrument for negotiation between different traders. Here also, an invisible chain of money transfer exists between the sinners. Depending upon the requirement and the urgency the perpetrators may use any of the following – Darshani Hundi, Shahjog Hundi, Dhanijog Hundi, Jawabee Hundi, Firmanjog Hundi, Miadi Hundi, Namjog Hundi, Jokhmi Hundi and Zikhri Hundi.
The process of terror financing starts with 1.Identifying the Sources (Businessmen, sympathizers, etc.), 2.Raising and receiving funds(Terrorists start getting money from sources), 3.Fund Transfer/Movement 4. Store(Kept and distributed amongst safe houses), 5.Spend (Use funds for acquiring arms, trainings and operation)
Jaish-e Mohammad (JEM’s) Financing Model
JEM – A Deobandi Jihadist group originating from the terror land of Pakistan has been a nemesis to India over the past decade or so. The ‘Army of Mohammad’ as it translates, has been active in Kashmir region since mid-90s.The group is currently lead by Masood Azhar. Over the last few years Mufti Rauf Asgar, Azhar’s brother and the launching commander in PoK has taken command of the finances. The 4 major names in the valley include Azhar himself, someone known as “Bhai Jaan” (Azhar’s brother), Mufti Asgar and Ustad Gori (training in charge). Internally JEM’s fund collection techniques mostly revolve around
• Looking for sources in Kashmir valley with connections preferably in Arab countries
• Once the source is identified and a MoU is established the banking details of the foreign contact and his Kashmiri counterpart are exchanged
• Amounts in small sums of Rs. 1-2 Lakhs are received by the local Kashmiri contact and then hands it over to the terrorists
• Transfer of funds trough Haj pilgrims are an extremely effective source for the operatives. Hajis are identified and connected well in advance and though them a large sum of money is being floated in India from Saudi Arabia
• Passengers on Srinagar-Teetwal-Muzzafarabad route are targeted by the over ground workers of the outfit. Apart from raising funds from external sources, the group has been actively involved in business dealings like real estate investment, manufacturing and distributing consumer items, commodity trading, etc.
On a religious front, many reliable sources have identified the Al Rehmat Trust and Al Rashid Trust(a Pakistan based jihad sympathizing charity organization founded by Mufti Mohammad Rashid) to have been providing substantial financial back up to the outfit.
TERROR OUTFITS OPERATING IN AFRICAN REGION
The fundraising methods and the tactics do vary based on the geographical landscape. For instance Boko Haram in Nigeria or the ISIL in Libya or the Al-Shabab in Somalia resort to smuggling and theft as against the outfits in middle eastern region where the preferred mode is to establish an intangible and invisible chain from the funding source to the fund receiver.
It is estimated that almost 1 million vehicles in Morocco and Tunisia run on smuggled oil alone. The stolen petroleum is encashed from some illegitimate sources and then channelized to fund outfits like Boko Haram and Niger Delta Avengers. Besides, these smuggling do incur significant losses to the energy and petroleum industry.
It would be worth mentioning that the Islamic State during its rise had focused primarily on gaining control of the oil reserved in North African countries. The major oil reserves in North Africa are found in Libya with 2.8% of the world oil reserves and .8% of the global gas reserves, Algeria and Egypt with a combined weightage of 3.2% and 2% respectively for oil and gas reserves. In addition to smuggling of crude oil, counterfeit products, human and drug trafficking, illegal mining, arms and organ trafficking contribute in billions of US dollar to the African outfits.
CONCLUSION
Combating terror financing would eventually mean combating terrorism. It would be fair to state that most of the terror outfits operating within a specific region follow quite an identical funding structure. The methods change based on the geographical landscape and the economy sector that terrorists deem profitable.