- The latest findings of NIA investigations on terror funding in the Kashmir valley have revealed that the separatist groups in Kashmir have been receiving a steady flow of funds through the ‘hawala’ route through Pakistan and UAE-based businessmen.
- Recently in early June 2019, the NIA arrested Yasin Malik, leader of JKLF, Asiya Andrabi of Duktaran-e-Milat, Shabir Shah and Masrat Alam of Muslim League.
In focus: Terror Funding Probe of NIA
- In the aftermath of the encounter of Burhan Wani, the then commander of Hizbul Mujahideen, in 2016, Kashmir witnessed violent agitations, including stone pelting, in a well-planned and well-funded strategy to create unrest in the valley.
- To tackle the unrest, the central government decided to crackdown the sources and channels of terror funding.
- In this direction, the National Investigation Agency (NIA) has been conducting number of investigations in cases of terror funding since May 2017 across the country.
- Laws targeting terror funding
- The cases of terror funding are registered in general under Sections 120-B (criminal conspiracy), 121 (waging war against government) of IPC and Sec 17 of Unlawful Activities (Prevention) Act, 1967 (terror financing) and Prevention of Money Laundering Act (PMLA), 2002.
- Probe on Terror-Funding
- NIA, since July 2017, has made a number of arrests and been investigating the modus operandi of raising, receiving and collection of funds aimed at separatist and terrorist activities in the valley.
- Key Findings on Modus Operandi
- The separatist leaders in the valley have been organizing well-charted protests in the valley by issuing “Protest Calendars“
- The main source of terror funding in valley is Pakistan’s ISI, LeT, business community in UAE and Kashmir Diaspora in foreign countries.
- The funding is pumped in the following ways
- In the name of donations to build mosques
- Floating of various shell companies by foreign remittances
- Over-invoicing in inter-state trade, mainly in carpets and dry fruits
- Investment in real estate
- The main channel through which the funds flow is ‘Hawala’ conduits.
What is Hawala?
- When money is transferred from one party to another without the actual movement of money, the transaction is called Hawala.
- It is primarily based on trust and takes place without any promissory note.
- The transactions take place outside the banking system and thus leave no trail.
- Hawala is generally used by people to send remittances.
- A person in a country X wants to send money to a person in country Y. The person in the country X approaches a ‘hawala operator in that country and pays him the money. The hawala operator in country X contacts the ‘hawala operator’ in the network in country Y and the fund is transferred to the recipient.
- Due to no trail feature, hawala is the preferred channel in cases of money laundering, drug trafficking and terror-financing.