Sunday, Nov 27, 2022

Black Money And Terror

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

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.

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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.

First published on: 23-11-2016 at 01:56:04 am
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