Q. Give out the major sources of terror funding in India and the efforts being made to curtail these sources. In the light of this, also discuss the aim and objective of the No Money for Terror (NMFT) Conference recently held at New Delhi in November 2022.

Model Answer: 

Terrorism in India and Combating Terror Funding

Terror funding in India stems from various sources, both domestic and international. The primary sources include:

1. Narcotics trade: The Golden Crescent (Afghanistan, Pakistan, Iran) and Golden Triangle (Myanmar, Thailand, Laos) regions serve as major sources of drug trafficking, with proceeds often channeled into terrorist activities.

2. Counterfeit currency: Fake Indian currency notes (FICN) are circulated to fund terrorist operations and destabilize the economy.

3. Hawala networks: These informal money transfer systems facilitate the movement of funds across borders without leaving a paper trail.

4. Extortion and kidnapping: Terrorist groups often resort to these tactics to generate funds locally.

5. Charitable organizations: Some NGOs and religious institutions are misused as fronts for terror financing.

6. Crowdfunding and cryptocurrencies: Emerging technologies have enabled terrorists to solicit funds anonymously from sympathizers worldwide.

To curtail these sources, India has implemented various measures:

1. Strengthening anti-money laundering laws and enhancing the capabilities of financial intelligence units.

2. Improving border security to curb drug trafficking and FICN smuggling.

3. Implementing stringent KYC norms and monitoring suspicious transactions in the banking sector.

4. Enhancing international cooperation through bilateral and multilateral agreements on information sharing and extradition.

5. Tightening regulations on NGOs and charitable organizations to ensure transparency in their financial operations.

6. Developing expertise in tracking and intercepting cryptocurrency transactions linked to terror funding.

No Money for Terror (NMFT) Conference

The No Money for Terror (NMFT) Conference, hosted by India in November 2022, was the third edition of this global event. Its primary aim was to strengthen international cooperation in combating terror financing. The conference’s objectives included:

1. Fostering a comprehensive approach to counter terror financing by bringing together diverse stakeholders.

2. Sharing best practices and exploring innovative solutions to address emerging challenges in terror financing.

3. Enhancing collaboration between law enforcement agencies, financial institutions, and technology companies.

4. Discussing ways to harmonize global efforts in implementing FATF standards and UN Security Council resolutions related to terror financing.

5. Addressing the misuse of non-profit organizations and new technologies for terror funding.

The conference highlighted India’s commitment to leading global efforts in countering terrorism and its financing. It provided a platform for countries to deliberate on critical issues such as the use of formal and informal channels of fund-raising and transfer, emerging technologies, and international cooperation in sharing intelligence.