Stone pelters financial trail leads to Christian aid agencies

Posted on August 12, 2010


Security agencies suspect development aid from north European countries is being routed to Kashmir NGOs with links to militants. Some embassy officials of South Asian origin, who are first or second-generation migrants to Europe, are thought to be behind the funding and are being watched for the past few months, sources said.

“Their activities and modus operandi are suspect to say the least,” a source said, citing how the embassy officials under the scanner change their cellphones frequently.

The NGOs receiving the money claim to be working for human rights in the Valley, but youths employed with them have been involved in the ongoing street violence, sources said.

Suspicion has centred on funds from specific Christian aid agencies. But the government is treading softly because India has extremely cordial relations with the countries in question.

Security agencies are confident the mission officials of South Asian origin and not the donor country or agency are behind the funding. “These officials have influenced the decisions of these donor agencies,” sources said.

The government may soon relay to the mission heads the “undesirability” of keeping these embassy officials in India.

Security agencies have already been investigating a money trail from Spanish cities and towns to Kashmir. Home ministry sources say this cash from Pakistan’s ISI — mostly small amounts — is being paid to stone-throwers in the Valley and is even financing gunrunning.

Minister of state Ajay Maken told the Lok Sabha that “militants/terrorists active in India are also funded by their outfits based abroad, particularly in Pakistan, often routed through third countries”.

India, the minister added, has “recently become a member of the Financial Action Task Force (FATF)”.

Maken said central intelligence and security agencies, working in tandem with their counterparts in the states, had arrested “a number of persons involved in facilitating funds/financing of terrorism”.

In 2008, Parliament amended the Unlawful Activities (Prevention) Act, 1967, to reinforce punitive provisions to fight terrorism, including its financing. The Prevention of Money Laundering Act, 2002, was amended in 2009.

However, the FATF, a global task force which tracks money laundering and terrorist financing across national borders, had last month raised doubts about the efficacy of India’s laws in combating terrorist financing and money laundering.

The FATF, which admitted India as its 34th member in June, had in its report identified fund transfers from foreign Non-profit Organisations (NPOs) as one of the “major sources for terrorist financing” in the country.

“India does not maintain a unified database for NPOs… statistics on the number of registered NPOs under the various statutes are not generally available in India. However, by government estimates, there are approximately two million foreign and domestic NPOs operating in India.

“India has not yet undertaken a review of its NPO sector, as envisaged by the FATF standards. There has been no effective outreach to the NPO sector by the Government of India or by state governments in relation to risks and vulnerabilities of the sector to terrorist financing abuse,” the report had said.

The report further said that “except under the Income Tax Act and the Foreign Contribution (Regulation) Act, the NPO sector is subject to limited or no monitoring and supervision, but the NPOs registered under these Acts only account for a small number of entities within the sector”.

It also flagged the Suspicious Transaction Reports (STRs) of banks and financial institutions to the finance ministry’s financial intelligence unit as appearing to be “extremely low, raising further questions about the implementation and effectiveness of the STR reporting obligation”.

“While Indian officials indicated that they believe the terror financing risk in the NPO sector is small, it is difficult to understand how they can maintain this confidence,” the report had said.