How to tackle narco-terrorism

Narco-terrorism implies the involvement of terrorist organizations and insurgent groups in drug trafficking and utilizing the profits generated from drug trafficking for financing terrorism. In third world countries, including India, drug traffickers, terrorist organizations and insurgent groups are reportedly using the funds generated from the sale of drugs to exert economic, political and military pressure on the governments of the countries in which they operate.

Some of the major cases where terrorism was financed with laundered funds are illustrated below:

• The US government has not been able to determine the origin of the money used for the 9/11 attacks. Investigations revealed that an amount of US$400,000 and US$500,000 was provided by Al-Qaeda. Out of this85 to 95 percent of the funds was provided by Osama bin Laden from his personal wealth and the remainder came from Al-Qaeda’s funds. The money was sent by wire transfers, and the hijackers after their arrival in the US received approximately US$130,000 from overseas facilitators from a financial Centre in Dubai. Some amount was carried physically in cash and traveler’s cheques. Overseas accounts in the Saudi British Bank in Saudi Arabia and Citibank in the UAE were accessed by the hijackers through ATM cards. Extensive use of international banks such as Bank of America, Sun Trust, Hudson United Bank and Dime Savings Bank in New Jersey was made.

• According to Financial Action Task Force (FATF), charities and NGOs have been used for financing terrorism and area weak point in the global struggle to stop such funding at source. Some charities are founded with the express purpose of financing terror and other existing entities are infiltrated by terrorist operatives and supporters and co-opted from within. The now defunct Global Relief Foundation (GRF), founded exclusively for charitable religious education and scientific purposes, has ties with al-Qaida and Taliban. Another Al-Qaeda-linked NGO is Al-Haramain Islamic Foundation, located in Riyadh, Saudi Arabia, also had a website that encouraged donations.

• Terrorists are increasingly using the internet to finance terrorism since funds can be transferred electronically either from a computer or through a mobile phone. Online gambling sites and similar entities have also made it easier to launder money on the internet, which terrorist groups have taken advantage of in the recent years.

• Hamas has been accused by Palestinian nationalist political party, Fatah, of using imports into Gaza from Egypt to conceal money laundering and importing millions of counterfeit US dollars from Iran, which have been used today government employees.

• According to The Indian Express, the ULFA has reportedly stashed around Rs 800–1000 crore in tax havens in a number of accounts in Panama, Liechtenstein, Channel and Cayman Islands. Intelligence agencies have revised their estimates subsequent to a fresh assessment of seized documents by the United Command which is in-charge of anti-insurgency operations in Assam. Most of the money may have been garnered through extortion and taxes on businessmen and companies operating in Assam. The bulk of the money is reportedly channeled through Kolkata-based hawala operators. Money is also being laundered through Bangladesh, where the Rupee is converted into US dollars, again through the hawala route. These funds have been reportedly used for the purchasing of arms through Bangkok banks and ferried to southern-most tip of Bangladesh, from where it goes to Myanmar and then to Assam, the North-Eastern States and Bhutan. Another channel is through the Mymensingh District of Bangladesh.

To carry out any activity either to create unrest or to terrorize in ways other than finding sympathizers and volunteers for the cause, funds are required for the acquisition of weapons, training, travel and other needs of the terrorist outfit, including the maintenance of sleeper cells. Such funds come from the sale proceeds of drugs which after being laundered are provided to the terrorist organizations. In turn the drug trafficking syndicates take the help of terrorist organizations to provide protection and security for their network of transporting, storage, distribution and safe guarding of enormous funds generated in the sale of drugs.

It is a well-documented fact that terrorist organizations establish a network with other terrorist organizations nationally and internationally and undertake franchised operations for a price. It is at that stage that contacts are established by intelligence agencies of other countries with such groups to finance and promote their activities so that they can achieve the political agenda of the country concerned, by proxy. Eventually, there will be a time when the terrorist organization concerned is no longer interested in the ideology or the objective for which they initially started the conflict.

It is not uncommon for both traditional and non-traditional organized criminal organizations to engage in drug trafficking. Drug trafficking provides the criminal organizations to raise large amounts of funds in a short time. However, usually, the terrorist groups are averse to engage in such activity as it may have an adverse impact on their professed political goals and ideology.

According to a report submitted by Jeremy Haken to UNDP, the money generated in drug trafficking is estimated at $320 billion. The money that is generated in drug trafficking and other related serious crime is being used to finance terrorism is well documented. Al Qaeda’s terrorist activities are partly, if not to a large extent, financed from the money generated from the sale of drugs according to a UNODC Report (United Nations Office of Drugs and Crime).

Pakistan’s drug syndicates run a parallel economy in connivance with political and military establishments to de-stabilize India. According to a UNDCP report Pakistan’s heroin industry in terms of turnover is estimated approximately at Rs. 100 billion in the year 2000. The UNODC estimated the value of heroin passing through Pakistan to be around US Dollars $1 billion every year, on being transferred through illegal routes.

Pakistan’s Finance Minister Sartaj Aziz admitted to Financial Times (24 July 1991) that local branches of the Bank of Credit and Commerce International (BCCI) may have been used for laundering money from part of the country’s billion dollar heroin trade. Aziz also conceded that BCCI’s branches in Pakistan may have been used to channel covert CIA assistance to the Afghan resistance as well as managing a multimillion dollar ‘slush fund’ used to reward Afghan rebel leaders and Pakistani military officers coordinating the Afghan guerrilla movement.

The CIA was heavily dependent on cooperation from the Pakistani military to supply vital arms to the Afghan mujahedin after the Soviet invasion of Afghanistan and Pakistani senior officers were thought to have been generously rewarded through this fund.

However, Aziz denied the allegations that a ‘black network’ functioning as a global intelligence network had operated out of the branch of BCCI in Karachi. ‘I am not aware of any such activities’, he said in a telephone interview with the Financial Times.

According to information gathered from Militants apprehended in Jammu and Kashmir in 1991, the estimated payments that have to be made to terrorist forces per month are as follows: Militant leaders – Rs15 lakh to Rs 3 crore; Afghan Mujahids – Rs 40 lakh to Rs 2 crore; new recruits – Rs 2,500, Rs 15,000 to Rs 3 lakh

This type of expenditure can only be met from the enormous amounts of money generated in drug trafficking.

The unholy alliance of the organized criminal enterprises, syndicates involved in organized economic crime, drug trafficking and terrorist groups—all of them well-serviced by money laundering organizations and financial institutions mostly operating overtly in national jurisdictions—are a serious threat to any government, more so to the governments in the developing countries.

There is a cooperative link between organized crime and terrorism and this is the main reason as to why a coordinated policy approach is required. Narco-Terrorism, the involvement of terrorist organizations and insurgent groups in the trafficking of drugs, has become a problem with international implications. The regional terrorist groups have hybrid structure and smuggling of drugs, including smuggling of fake currency and terrorist operations are intrinsically linked. One would not be surprised if such syndicates resort to smuggling of nuclear materials, radiological ores, armaments, etc., since the region has the potential.

If this unholy nexus has to be combated with determination, a series of policy measures are required to be undertaken. Policy makers should have the political will with the conviction that narco-terrorism is a thriving reality. To combat this octopus there should be a coordinated and unified policy approach by converging the war on drugs and the war on terrorism.

(Writer is formerly DG, NCB, DG, DRI, and Member, CBIC)