Black Money And Terror

Quality of counter-terrorism, not currency crackdown, will prevent terrorism.

Written by Vappala Balachandran | Published:November 23, 2016 1:56 am
demonetisation, demonetisation effects, PM Modi, black money, terror funding, terrorism, corruption, black money demonetisation, demonetization india, demonetisation news, india news, demonetisation protests, protests demonetisation Global research has now found that terrorists seldom use tax dodgers or Hawala agents of target countries as they are known to local agencies.

On November 10 our prime minister said that demonetisation of high value currency notes was “a decisive war against the menace of corruption, black money and terrorism”. Social media claimed that the “PM had nuked terror funding”. Subsequent discourses saw official assertions that a “cashless economy” would end “black money” to make us “terror-free”.

But a “cashless economy” need not be “terror-free”. In November 2014, CNBC conducted a survey of the 10 top “cashless” societies. It found Belgium to be the world’s top cashless society with 93 per cent non-cash consumer payments and 83 per cent debit card use. France was second, then Canada, the UK, Sweden, Australia, Holland, the US, Germany and South Korea.

Unfortunately, Belgium and France were also the worst victims of indigenous and trans-border terrorism. This rampage started on January 7, 2015, with the Charlie Hebdo attacks in Paris. France did not detect that Amedy Coulibaly and Medi Nemmouche had bought their weapons from Brussels. Nor did Belgian agencies know that Molenbeek, a small 5.8-sq km area in their country was Islamic State’s busiest terror incubating unit in the world. This long bloody spree saw 15 serious terror incidents, killing 254 innocents and 16 terrorists.

Global research has now found that terrorists seldom use tax dodgers or hawala agents of target countries as they are known to local agencies. “Black money” is not preferred since it does not satisfy the principle of “volume, risk, convenience, simplicity, costs and speed”. Terrorists never hire crime cartels because they shift loyalty. Dawood might have been used by a hostile government once, but terror cartels never “outsource” their campaigns. Funds are moved using phoney legal means, although their origin might be through crimes like robbery, extortion or fraud. Terrorists usually do not collect funds from the places of their residence and certainly not in the country where attacks are planned.

The US Treasury Department’s National Terrorist Financing Risk Assessment (2015) report gives the details of innovative terror financing, mostly with a legal facade. Centralised inter-agency coordination is done to deal with global criminal activities like kidnapping, extortion, drug trafficking, charities, bank frauds and state sponsorship to link with funding. Many individuals not directly connected to “charities” were collecting funds through their personal bank accounts and transferring funds to terrorist organisations under proper “cover”.

Another great risk they faced was when money lands up in the US through foreign banks which do not follow the US’s due diligence practices and “suspicious activity identification” processes. Another problem is from a multitude of Money Service Businesses (MSB) in the US which could range from Fortune 500 companies to small stores who exchange currency as a side business. The same experience is evident through the report on ISIS financing by the Paris-based Financial Action Task Force (FATF), an inter-governmental body against terror financing and money laundering. Detecting terror financing through legal channels is an extremely onerous task, as the US Treasury and FATF reports would indicate.

Unfortunately, in India, such centralised monitoring is rendered difficult with a structural inadequacy and bureaucratic inelasticity to keep pace with innovative terrorism. Our counter-terrorism (CT) machinery is under 29 state governments and the NIA has not expanded to take over a country-wide mandate. That is why we had to be alerted by the British Channel 4 to locate the “Shami Witness” in December 2014. As a result, India never took note of the ISIS threat until late 2015, although the government was warned since 2014 by many, including this writer. Strangely even as late as May 24, 2016, our home minister had maintained that ISIS posed no threat to India

Again it was only during late 2015 that we started considering the need for de-radicalisation despite global indications of its benefits. The UK was saved from the ISIS when it was trampling upon Europe only because of its “channel process” programme from 2009. Under this, 4,50,000 frontline staff were trained on the legal “prevent” strategy, supplementing vigilance by the MI-5 and local police. UK has been terror free since 2013 even though nearly 850 of its youth had joined ISIS.

Finally, it is the quality of our CT machinery which prevents terrorism and not our currency. The joint ambush by the anti-talks ULFA and NSCN(K) in Pengari, Assam on November 19 killing three army Jawans is a clear indication that terrorists would strike with or without demonetisation. Thus “ending terrorism through demonetisation” will remain only a political slogan.

The writer is a former special secretary, cabinet secretariat and member of the 26/11 high-level enquiry committee.

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    Gomathi Raghavan
    Feb 17, 2017 at 4:21 am
    an excellent write up on militancy lt;br/gt;the term used is note ban certainty as expatiated in the article, there is no correlation between note ban and militancy infact it was never intented to be so ultras are gaining legitimacy which never happened before drastic measures are needed to put systems in order again further deterioration has to be halted
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      Prashant
      Nov 23, 2016 at 8:22 am
      Criticizing is one of most easiest thing u can do,,,,,,,,,,he say india shd adopt UK model,,,,,,,,In UK,,cash transaction is minimum(in comparison 2 india),,,,,first India will achieve this,,,,,next India will train it's IT experts abt terror funding nd transaction mechanism,,,,,,,,It's a step by step process,,,,,,
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        Dinakaran
        Nov 23, 2016 at 8:05 pm
        Only people with Black money and corrupt will complain against Demonetization.
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        1. H
          Haru Mandal
          Nov 23, 2016 at 8:37 am
          From the point of economy of scale and cost-benefit , USA and US Dollar should be the biggest target and most vulnerable from fake currency "generator" (and from terrorism for USA) . How they and other countries (Euro and British Pound) deal with that - without ABRUPT and disruptive demonetisation?
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            K SHESHU
            Nov 23, 2016 at 1:59 pm
            Most terrorist outfits use legal currency . They have various levels of obtaining money for their operations
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            1. O
              Observer
              Nov 24, 2016 at 4:51 am
              you fremind me of George Orwells dystopian novel "Animal Farm"
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                Loksatta Vaachak
                Nov 23, 2016 at 2:43 am
                The currency demonetization cuts the supply line of terrorism. This tactically cuts the local handlers support ( which is only due to payments made to them). Without the local support it's not easy for terrorists. As local can give intelligence support and tactical support. This demonetization has hit them hard. Anti terrorism works on (Intelligence, Action, corroborative measures). All are important. Demonetization is a later one.
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                  Col S
                  Nov 23, 2016 at 2:32 am
                  Do not THUMP chest on ONE SURGICAL STRIKE. To fight terror strikes, DECIDE STRATEGY and make SURGICAL STRIKES as a DOCTRINE.lt;br/gt;Thumping chest for FAILURES too has become a habit.Must PONDER and DECIDE .
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                    Col S
                    Nov 23, 2016 at 2:28 am
                    To fight TERROR , WE ALL MUST be on SAME PAGE.. INDIA ONE. Netas have DIVIDED the country digitally-SAFE NETA and INSECURE nation and public by VIP SECURITY which is a curse on the NATION. It is LOOT of national resources and revival of FEUDALISM.VIP Culture NEED be KILLED.
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                      Srinivas
                      Nov 23, 2016 at 3:12 am
                      The problems in the country are many.We should debate but accept the Ideas of the govt of the day.The outcomes of their decisions hv to be left to the people to decide in the era of social media main rung media should not force their opinion which only aggravated the situation.If the decision is bad it will surely reflect in the voting after the term of govt expires so patience is d mantra.
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                      1. K
                        Kishor
                        Nov 23, 2016 at 8:00 am
                        Dear Mr. Vappala Balachandran - Hope you will agree with that there is not single action which can be taken considered for counter terrorism...a bunch of activities are required... the currency ban is one of them... You may agree to disagree that after demonetization we don't see or listen any stone plating at Kashmir....
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                          Mahender Goriganti
                          Nov 23, 2016 at 3:59 am
                          It is one of the two very important steps that demonetization took out fake money finance, black, hawala an important easy terrorist methods. Other is recruitment of hardcore and paid guys doing the foot work so the paid guys are cut out. lt;br/gt;that leaves 1/4 of the problem where unfortunately no choice but our military need to sacrifice and fight.
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                            Mahender Goriganti
                            Nov 23, 2016 at 12:42 pm
                            quality of counter terrorism is drawing s with economic and unsustainable cost at LOC
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                              Parth Garg
                              Nov 23, 2016 at 8:26 am
                              What the author has opined finds adequate support in the news that the new pink Rs 2000 note was found in possession of a terrorist in Kashmir and the next one that in Nagaland: Rs 3.5 crore seized from chartered plane at Dimapur went missing.
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                                Rakesh Roshan
                                Nov 23, 2016 at 2:25 pm
                                First of all you gave examples of Europe. So even though the countries you specified are cashless. The euro is available all around. So please specify that too.lt;br/gt;You know that illegal things are very difficult to do using bank transactions as banks are never illegal. If banks would be illegal with no track record for people,lt;br/gt;then cashless will have no effect. But fortunately all banks have to go through a country's regulatory body.lt;br/gt;So, please do not just present biased facts to justify your story. You are not a politician who have to justify something. You are a reporter, who has to presentlt;br/gt;facts and that too unbiased.
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                                  R. Singh
                                  Nov 23, 2016 at 2:41 pm
                                  A quick google search for "Global Research", shows up the site based in a western country, promoting ISIS views.lt;br/gt;lt;br/gt;lt;br/gt;Does IE really expect such a site, to say that Black money, counterfeit money, and hawala /money laundering is not the prime source of terror funding?lt;br/gt;lt;br/gt; lt;br/gt; Why is IE not doing its due diligence, before spreading propaa.?
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                                    R. Singh
                                    Nov 23, 2016 at 2:34 pm
                                    What is this outfit " Global Research", and how does it claim to have such full and detailed access to Terrorist networks secret information?
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                                      Ravindra
                                      Nov 23, 2016 at 5:49 am
                                      As usual, people are nitpicking to find arguments against demonetisation. Is this not one of the moves , which will help counter terrorism? Of course , it is not one point answer to stop terrorism. No body has said so. They have only said, it will help in reducing terrorism. Stop nitpicking. If you oppose on some worthwhile points, say so.
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                                        Sitaram
                                        Nov 23, 2016 at 2:24 pm
                                        There is no silver bullet like just one counter terrorism .. need to try all options available.lt;br/gt;If really government ped some law or introduced more military or police, then the clamor would be not to use force but some soft measures, track-2 etc. Modern terrorism seems to be so well oiled machine that government needs to use every measure possible to mitigate its effects.
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                                          S K
                                          Nov 23, 2016 at 5:32 am
                                          problem with with authors is that they talk pure theory based on umptions. No wonder our bureaucracy messed up our country.lt;br/gt;Are effective effective counter terrorism and going after fake currency mutually exclusive. Both are needed and Modi has taken these and more steps.
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                                            Sameer Pawar
                                            Nov 23, 2016 at 5:59 am
                                            BJP gets huge amount of party funds from unaccounted sources. Isn't that black money too.And btw in recent years it is Hindu terrorism than has been an actual threat to India than Islamic terrorism and will continue to be so with the present government in power.
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