IS raises funds via loans, government schemes to finance activities: FATF report

NEW DELHI: Islamic State terrorists are using every trick in the book to finance their activities, from bank loans to government benefits schemes to exploitation of natural resources, according to an October 2015 report of Financial Action Task Force (FATF). The plenary meeting of the inter-governmental task force, with a focus on terror financing activities of the IS, took place in Paris last month, just weeks before the multiple attacks in the French capital. India, one of the members of FATF, supplied details of the modus operandi used to finance the deadly 26/11 attacks.

According to investigations carried out by the task force members, one emerging trend includes foreign terrorists applying for small short-term loans from banks, with no intention to repay them. The 50-page report on the IS states that a framework needs to be developed to choke funds for these terror groups.

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Besides India, member countries including the United States, France and Russia also highlighted the use of social media by the IS to raise funds. “Fundraising advertisements are usually placed in social networks and thematic websites, as well as in specialized media, closed online forum and sent in private messages,” the report says. A case in point is the pro-IS Twitter handler Mehdi Masroor Biswas, who was arrested by Karnataka police for running @ shamiwitness.

Explaining a modus operandi, the report says, “Individuals associated with ISIL calls for donation via Twitter and asked the donors to contact them through Skype. Once on Skype, the donors are asked to buy an international prepaid card and send them the number of this prepaid card via Skype. The fundraiser will send this card number to one of his followers in a neighbouring country from Syria, who would sell this card number at a lower price and give the cash proceeds to ISIS.”

Another trend being noticed worldwide for terror financing is “crowdfunding techniques” which is being used to transfer funds abroad by avoiding regulated financial entities. Canada’s Financial Intelligence Unit shared its experience, saying the authorities recently zeroed in on an individual who left Canada, prompting an investigation. The probe was linked to a crowdfunding website that allows people to easily set up fundraising web pages and collect donations.

From the investigations carried out by member countries, FATF also came out with the various other methods being used by terror groups and individuals of IS to finance their activities. The home ministry, which participated on behalf of India at the plenary, explained how counterfeit currencies were used for 2008 Mumbai attacks.

As per the Indian dossier, the 26/11 attacks were financed using fake Indian currency whereby American born Pakistani national David Coleman Headley was supplied with fake currency in Pakistan. Investigations revealed that the money was later used to set up an immigration office at Mumbai by Headley.