Geneva: September 25, 2019. (PCP) The European Foundation for South Asian Studies (EFSAS) organized a very successful and thought-provoking Side-event titled, ‘Terrorism Financing in South Asia’, during the 42nd Session of the United Nations Human Rights Council (UNHRC) in Geneva. A panel of scholars, policy advisors and researchers in the field of violent extremism and South Asian studies deliberated upon the terrorist financing and money laundering infrastructures in the region and the strategic convergence of State and non-State actors. The event was moderated by Mr. Junaid Qureshi, Director EFSAS, and was very well-attended by scholars, policy advisors, UN officials, human rights activists, NGO representatives and diplomats.
Dr. Dorothée Vandamme, Visiting Lecturer at the University of Louvain, Centre for the Study of Crises and International Conflicts, the Genesys Network and EFSAS Research Fellow, discussed Pakistan’s terrorist financing apparatus and its implications for South Asia. She highlighted the strong connection between Pakistan’s military establishment and terrorist activity worldwide, arguing that the Pakistani Army often benefits from supporting violent insurgencies while it expresses sympathy for their cause, ultimately perpetuating a vicious cycle where the two parties feed off each other. The presence of extremist elements in the Military was one prominent example, which illustrated this perilous confluence. Dr. Vandamme further deliberated upon the establishment-militant-mobster nexus, by explaining how terrorist groups critically need the financial and material support of organised crime groups in order to fulfil their agendas. Although the two groups have different motives and objectives, often they collaborate in order to achieve their goals, portraying the overlapping versions of a similar phenomenon. Dr. Vandamme argued that Pakistani terrorist outfits often take advantage of the global drug trafficking to generate profit for funding their operations. According to her, currently 40 % of the Afghan opium is smuggled through Pakistan. Other major sources of illicit financing for bankrolling extremist organisations constituted the ‘Hawala’ system and the abuse of the charitable sector, since the latter often stipulates religious obligations for the donation of money, thus groups exploit the religiosity of the population by linking themselves to such charities or establishing charity fronts. Dr. Vandamme used the example of the Falah-e-Insiniat Foundation, which is currently a banned charity organisation based in Pakistan established by Jamat-ud-Dawa, the political arm of the Islamist militant organisation Lashkar-e-Taiba, responsible for the 2008 Mumbai attacks. She concluded by saying that greater synergy and cooperation between counter-terrorist and law enforcement agencies is needed in order to respond comprehensively to terrorist financing in South Asia and the West.
Dr. Matthew Garrod, Senior Lecturer in Law at the University of Sussex and Co-Director of the Sussex Terrorism and Extremism Research Network (STERN), illustrated the legal mechanisms and framework for tackling the aforementioned challenges, which currently jeopardise peace and stability in the region. He cited the 1999 International Convention for the Suppression of the Financing of Terrorism, the UNSC Resolution 1373 (2001) and UNSC Resolution 2178 (2014), arguing that these legislations tend to simply explain the problem, further delegating the issue instead of addressing it. In addition to that, the regional legal framework in South Asia appeared to be too broad, often putting people under the same denominator. Dr. Garrod also elaborated on the UN’s role and mechanisms in addressing the phenomenon, further quoting the UNSC Resolution 2195 (2014), which stresses the need to work collectively to prevent and combat terrorism in all its forms and manifestations, including terrorism benefiting from transnational organized crime. He concluded by recommending States to provide for appropriate domestic legislations and implementation of UNSC resolutions in order to effectively investigate and prosecute cases of terrorist financing as well as fostering coordination efforts at the local, national, sub-regional, regional, and international levels to respond to this challenge.
Mr. Malaiz Daud, Former Chief of Staff of Afghanistan’s President Ashraf Ghani, Research Fellow at the Barcelona Center for International Affairs and a Scholar at the Berghof Foundation, discussed the Taliban’s financial resources and arrangements alongside with the convergence of State and non-State actors in the AfPak region. He analysed the typology of the Taliban’s funding structure arguing that it is stratified into multiple dimensions, namely internal, transnational and external. While the means of financing could be seen as State-sponsored, illegal, legal and popular support. He illustrated how the terrorist outfit primarily receives its resources from the Military establishment in Pakistan, while countries such as Iran, and Russia and Qatar to a limited extent, also play a role. In terms of illegal activity, the group resorts to narcotics trade, lumber trade, extortion, kidnappings, petty crimes, “over or double taxation” of local populace and conscription fines. He explained how often families based in Pakistan must provide foot soldiers to the Taliban and if they fail to do so, they are forced to pay a certain amount of money. Mr. Daud disclosed how many members of the Taliban and their ideological supporters maintain stakes in businesses in Afghanistan, receiving and disbursing State financial resources, such as in the sectors of health and education. Likewise, the group holds stakes in businesses abroad, predominantly in Pakistan but also in some of the Gulf Cooperation Council (GCC) countries, such as UAE and Saudi Arabia. He concluded by stating that the Taliban’s financial base is broad and diverse, thus making it difficult to target and dismantle. Therefore, it is essential to target those resources considering that the absence of them will gravely affect the operational capacity of the movement.
Dr. Paul Stott, Research Fellow in the Centre for the Responses to Radicalization and Terrorism at the Henry Jackson Society, Tutor in the Centre for International Studies and Diplomacy at SOAS, and a Research Fellow of EFSAS, discussed the repercussions for Western countries stemming from the terrorist financing phenomenon emanating in South Asia. He explained how historically terrorism has required significant logistical support, which is visible from the tendency of terrorist groups becoming wealthy, such as the LTTE. He further stated that money and support potentially flows in at least two directions – from South Asia to the UK, and from the UK/Europe to the Indian sub-continent. Using the example of Operation Vex - an HMRC investigation into £8 billion of VAT frauds and money laundering back in the 1990s, Dr. Stott highlighted how a percentage of the money were allegedly funnelling cash to Al-Qaeda. He further unravelled the September 2018 raids on UK Sikhs, primarily in the West Midlands, who were connected to money laundering operations. Among them, Jagtar Singh Johal, Scottish Sikh in Indian custody was accused of delivering cash to the Khalistan Liberation Force. Dr. Stott further deliberated upon the emergence of a legal and political system where the former colonial power, or more accurately past representatives and individuals from it, take on some significant roles in the former colony. As a result, the UK has attempted to extend its legal reach into Pakistan in regards to family law, terrorism, finance and serious crime. Dr. Stott concluded by arguing that for terrorist groups cash serves as the oxygen which allows them to function, therefore it is essential to target those sources, while having in mind the adaptability and resilience of those outfits.
The event was followed by a vibrant Q&A session, during which the audience and speakers exchanged views in a debate on issues pertaining to South Asia and terrorist financing. The upcoming FATF review of Pakistan and its prospects of being blacklisted due to its sponsorship and financial support for terrorist organisations as well as Chinese protectionism for Pakistan were among the various topics discussed.