Financial Action Task Force (FATF) Report on Terror Financing

The latest report by the Financial Action Task Force (FATF) highlights significant concerns regarding the misuse of digital platforms for terrorist financing. The report underscores the challenges faced by countries, including India, in fully understanding and responding to these threats.

Key Methods of Terrorist Financing

• Raising, moving, storing, and using funds through: 
  • Cash transportation and hawala systems.
  • Online payment services, including social media platforms like Facebook and Telegram.
  • Virtual assets and digital platforms.
  • Abuse of legal entities such as shell companies and non-profit organizations (NPOs).

Emerging Threats Identified

• Use of Chinese apps, crypto wallets, satellite phones, and the Darknet.
• Specific cases like the Rameswaram Café blast (2024) and Pulwama attack (2019) highlight these methods.

Complexity in Terror Financing

• Integration of digital technologies with traditional financing methods.
• Rising threat from lone individuals using microfinancing, petty crimes, and technology-enabled methods.

Challenges in Tracing Financial Trails

• Frequent ethnically, racially, or politically motivated attacks with low visibility of financial activities.
• Inconsistent designations and proscriptions add to the challenge.

The report calls for risk-based counter-terrorist financing measures to combat these evolving threats effectively, highlighting terrorists' adaptability in exploiting the international financial system.