Govt looks to cut off terror funds

Regular meetings have started between senior officials of the ministries of Home, Law and Finance to discuss the modalities. So far, POTA was the only law dealing with terror funding, in addition to other aspects of terrorism.

FEMA — enacted to deal with economic offences and white-collar crimes — is not equipped to deal with funds coming into the country for militant activities.

‘‘Most funds which come in for terror activities are routed through the hawala channel. The worst affected in the regard has been Jammu and Kashmir, with funds originating mainly in Pakistan, sent through Dubai, Nepal or even London. These activities were covered under POTA but now it is going to be a problem,’’ said an Intelligence official dealing with J-K.

In its present form, FEMA does not even provide for the arrest of an accused. ‘‘If a person is arrested with a large amount of money — say Rs 50 lakh — he only has to explain the source or show it in his tax returns. If he fails to do it satisfactorily, the only penalty is a fine. And it is when he fails to shell out the fine money that the accused can be jailed — that too with easy bail provisions,’’ explained an Enforcement Directorate official.

FEMA is hardly a deterrent for those dealing with terrorist funding on a sustained basis, he added. The government is busy scrutinising the Act to strengthen it and plug the loopholes in it.

‘‘It is not going to be an easy task for the government to make FEMA more stringent because that will lead to complaints of its misuse — like it was the case with FERA — which was finally replaced by FEMA,’’ said the ED official. Law Minister in the NDA government Arun Jaitley said that terror funding was not the only aspect of terrorism which will suffer a blow on the repeal of POTA.

‘‘POTA was the only law which sought to define terrorism and allowed confiscation of profits of terrorism. It even allowed admissibility of confessions and intercepts as evidence in court,’’ he said.

He said the interception of communication was necessary for the prevention of terrorism. In Jaitley’s view — also shared by other senior party leaders, including former deputy prime minister L.K. Advani — it would have been better to plug the loopholes in the law by introducing more safeguards.

The NDA had already constituted a permanent central review committee under Justice A.B. Saharya — making the review time-bound and its decision binding on the state concerned.