International cooperation must be enforced to prevent terrorism financing, says European think-tank

In order to adequately tackle terror financing, apart from adopting laws to eradicate terror-related crimes, international cooperation must be enforced for a better investigation and prevention of terrorism financing, the European Foundation for South Asian Studies (EFSAS), an Amsterdam-based think-tank, said in one of its reports.

In South Asia, regional tensions and complex geopolitical situations render difficulty in international cooperation, hence weakening the effect of counter-terror financing measures.

"Cutting the financial bloodline of terror organisations is the only way to prevent the proliferation of terror organisations, the dissemination of their radical ideology and the occurrence of their violent activity," the report said.

 

Hinting towards Pakistan, where terrorism has been enjoying a backing by the state, the think-tank noted, "Terrorist groups in South Asia are able to thrive financially and will continue to do so until they are taken from under the wings of States that use them as 'strategic assets' to pursue political agendas and foreign policy."

In South Asia, it is the Pakistani Intelligence Services' (ISI), which has been sponsoring various anti-India insurgencies in Jammu and Kashmir, and its dubious relationship with the Taliban and the Haqqani network in Afghanistan.

"During the Soviet war in Afghanistan, Pakistan received millions of dollars from the Central Intelligence Agency (CIA) to train and assist Afghan Mujahideen fighters. However, at the end of the war in 1989, Pakistan diverted these militants towards Jammu & Kashmir, to wage a proxy war against India," the report added.

The think-tank in its report further estimated that Pakistan had spent up to USD 50 million on anti-India jihadist organisations such as Lashkar-e-Taiba, Jaish-e-Mohammed and Hizbul-Muhjahideen in the 1990s.

The support provided by the ISI enhanced the abilities of the groups to raise funds and recruit individuals.

Apart from providing financial support, Pakistan is internationally known for being a 'safe haven' for terrorists where some of them run training camps, recruit and train individuals, collect funds, transit and operate cross-border terrorism.

Pakistan has been on the Financial Action Task Force (FATF) 'grey-list' since 2018, and narrowly avoided being 'blacklisted' twice in 2019, June and October, as it managed to obtain the three votes required to stay on the grey list, courtesy of China, Malaysia, and Turkey.

The Mutual Evaluation Report published by the Asia Pacific Group, the FATF's regional body for Asia, established that Pakistan lacked certain measures and enforcement mechanisms to target legal persons, such as trusts, and its number of terror-financing convictions did not reflect the magnitude of the issue in the country.

Despite such deficiencies in its legal framework, the Pakistani government has not taken any noticeable actions to improve the situation and completely implement the FATF's plan of action.

"If Pakistan were to be blacklisted, this would prove to be devastating for its already fragile economy, as it would render any foreign investment nearly impossible. It remains to be seen how the Pakistani government will implement its action plan and whether or not its continuous policy of tolerating the operations of terrorist groups on its territory, if not supporting them, will finally catch up to Pakistan," the think-tank warned.