Geetanjali Mehra

Geetanjali Mehra explains the complex web of terror financing in Jammu-Kashmir in terms of its genesis and evolution over a period of time and how it is proving to be lifeline of terrorism.

The Islamic state of Pakistan is waging a proxy war against India through the instrument of terrorism as state-policy. It tried its nefarious designs first in Punjab then in the State of J & K. And even though it lost designs in Punjab it has continued its efforts in Kashmir. Terrorism is an eco-system which needs survival and its flourishing on two aspects: A. Terrorism as an ideology and B. Terrorism as an infrastructure. It is said that If Islamic-radicalization is at the heart of terrorism today, finance is its lifeblood. And for terrorist infrastructure to flourish, terror-financing is the most important component to support the terrorist eco-system. As per FATF, “Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations.” while Terror funding is a part of a larger eco-system.

Over the years, the terrorist-ecosystem has spread its roots and tentacles in the socio-political matrix of Kashmir. Pakistan’s support of terrorism in Kashmir has two strands i.e, funding the secessionist and separatist movement like Hurriyat; and funding the terrorists and terrorist organizations. This is done through the system of terror finance in Kashmir Valley and the geographical origin can be traced from a) Pakistan b) Diaspora c) Domestic. The major portion of Kashmir-Valley terror funding comes from terror financing by Pakistan be it through ISI or by Pakistan regime indirectly. The major activities from which these funds are sourced are narco-financing controlled by ISI, counterfeit-currency, local-business activities; and charities and donations.

The lion’s share of the source of terror funding in Kashmir emanate from across the border in Pakistan through its notorious agency ISI. The ISI generates its finances through narco-financing which comes from the control of narcotics trade in the Afghanistan-Pakistan region. This area is part of the Golden-Crescent which is the largest producer of illicit-opium in the world. To source its illegal activities, ISI has established over the years a well-entrenched drugs-terrorism nexus which is now a self-propelled profitable business. The need to give birth to this narco-terrorism emerged on account of the need of funds to counter the Soviet-challenge in Afghanistan where ISI played a pivotal role. This activity soon became the major source of funding for the ISI-Military establishment and a well-established trade in Pakistan. Interestingly, as per a study, Pakistan has the highest per capita heroin addiction rate in the world and hence is just exporting an already well-functioning domestic industry into India. The ISI pumps in drugs in Jammu and Kashmir with twofold intentions. One being that drug-paddling funds terrorist activities; and the other based on a strong correlation between receptive attitudes towards Jihadism and drug use. The local youth are initially introduced to the path of extremism through drug addiction. As per one study conducted by the Indian Army in 2018 around 40% of the youth in Jammu and Kashmir suffers from some form of drug addiction which was below 5% in the year 2008. Drug-use gives fertile soil to seed the fanatic and radical ideology in the minds of the local youth.

The other major source of terror-financing is collected in the form of charities and donations. These donations are collected from Pakistan and many of the West-Asian, Gulf-countries including the Saudi-Arab. The most vulnerable group from where these donations are collected is from the Kashmiri-Diaspora. These charities are collected in the name of either promotion of religion or sometimes openly with a purpose to help the cause of Islamisation in Kashmir and the most crucial channel to route these donations are the Madrasa. Another channel is the frontline NGOs and trusts that route and divert most of the funds collected through charities and funds meant for charitable activities to secessionist and separatist activities. Recently the NIA raided 6 NGO and Trusts for their active involvement in funding terrorist funds namely Falah-e-Aam Trust, Charity Alliance in Delhi, Human Welfare Foundation, JK Yateem Foundation, Salvation Movement and JK Voice of Victims.

The other major source of terror financing is through businesses which seem legitimate. There are businessmen, traders and sympathizers who support terror-financing. Many instances have come to notice where local traders who are involved in cross border trade route divert the proceeds of their illegal trade through the Hawala and pump these finances to fund terrors. The two trade corridors are being misused by terrorists based in Pakistan, as a channel to smuggle arms, ammunition, narcotics, counterfeit currency and funds to support anti-India activities within Jammu and Kashmir. These corridors are used to trade other than the 21 listed local goods and the surplus so generated is diverted to fund terror and separatist activities. As per a report, 10 of the trading companies involved in across LoC trade were run by Kashmiri militants who had crossed over to Pakistan. Recently, the arrest of prominent businessman from Jammu and Kashmir, Zahoor Watali indicated him as a bridge between the ISI and the Kashmir separatists when it came to moving funds in a bid to spread terror and cause unrest. Furthermore, a good percentage of infusion of money comes through counterfeit currency which has also been a major source of funding terrorism in J&K.

Various methods of Terror-funding have been used like giving funds directly to the terrorists for carrying-out operations, salaries to the terrorists, ‘Informants’ and to families of terrorists after they have been killed. These funds are used for Sleeper-cells, local handlers, drug-peddlers and also for financing the activities of Separatists, Huriyat and giving donations to Madrasa. Still another use of the terror-fund is by giving funds to activities other than terror attacks like stone-pelting, rallies and agitations. Furthermore, funds are also given to ‘Sympathizers’, intellectuals, press and other people to propagate the ideology of terror and also to the vulnerable people who are part of state machinery like police or bureaucracy.

Few of the methods that The ISI uses to bring the terror funding to the Kashmir-Valley are:

  1. Through Physical movement of cash and material: Normal across-LOC trade happens through two roots: Poonch-Rawalakot at Chakan da Bagh and Srinagar-Muzaffarabad at Uri. These two trade roots are the most favored routes to bring in cash and material to funnel the terrorist funds as it is not humanly possible to verify and frisk all that is traded in through this channel. And recently, arms and ammunition, drugs and other illegal material like counterfeit currency have been found in the consignments which have been traded in to India. On 19 April, ten Pakistani-based citizens native to the Indian state of Jammu and Kashmir were arrested by Indian authorities for transporting weapons, drugs and counterfeit currency into the Valley of Kashmir. Crucially, all ten were found to have connections to Pakistani-based terrorist outfits. Militants now, are also using innovative methods like the use of drones, use of PVC pipes to smuggle in the drugs, cash arms and ammunition.
  2. Through the channels of Hawala and Angadia: There are only 21 local items which can be traded and in the garb of local items, goods emanating from other countries are traded in. This not only causes loss to the state-exchequer but also destabilizes the economy. Instances have also come to notice that the cross-traders of dry-fruit particularly traders in California Almond under-invoice their goods. These goods after having sent to India and billed at a low price than the actual-price. The difference between the actual sale-proceeds and the billed priced is flown back in cash either through ‘Angadia’ if it is within country or through ‘Hawala’ to the traders across the border. This cash is then used to fund the terrorist-activities.
  3. Through Banking Channels: The banking channels too have been used by the handlers of terror funding. Terror-fund has been routed as cash deposits in various banks and even in the cooperative banks. Recently, the J & K Bank which is a scheduled bank, had been raided first by ED and then by the Income Tax. The prime reason of these raids was to go to the source of various deposits in the banks which were unaccounted, doubtful, and highly suspicious. There has been lack of compliance of various regulations of the RBI by this bank. In one such instance, cash of crores of rupees were deposited in the name of an old lady without ascertaining the identity, source and credentials of the cash like PAN, address etc. The overseas funds coming from Diaspora in the form of charity and donations have been withdrawn in cash by the terrorist-network and also used for funding the education in Madrasas. The terrorist eco system also uses fake and bogus bank-accounts, benami bank holders to route their funds. Besides, the banking channels have also been used to park in the illegal proceeds of various bureaucrats, politicians and sympathizers of the terrorists.
  4. Some of the other methods used in recent years is through funds transported by some people returning from the Haj and also instances of misusing diplomatic channels. In its charge sheet, the NIA has alleged that officials of the Pakistan High Commission here were passing on money to separatists in Jammu and Kashmir through the businessman Watali.

Until and unless we root-out the blood stream of terrorism in the form of terror funding, it is difficult to eliminate terrorism completely from the valley.

(The writer is an independent columnist. Views expressed are personal)