Charity and Terror Financing

By Huma Baqai

Published in Pakistan Observer:

The link between charity and terror financing is also a phenomenon which jelled in the eighties. Many charitable and service organizations emerged that served as fronts for international terrorist groups, providing them funding, material, recruits and more. Authorities globally have failed to take decisive action against the vast network of charities identified as tied to terrorist groups. For countries like Pakistan, it is an even more difficult to address.

Few people know that Al-Qaeda pre-curser was Maktab Al-khidmat/ Al-Kifah Refugee Centre, Brooklyn, New York. Wadi Al-Haque, a convicted Al-Qaeda operative was called to New York in 1991 to help direct the Al-Kifah Refugee Centre. He was responsible for cultivating individuals involved in the 1993 World Trade Centre and New York city marked bombing cases. He participated in the 1998 East Africa Embassy bombing and at one time served at Osama Bin Laden’s personal secretory. Omar Al-Farooq, Al-Qaeda’s operational point man in South East Asia, revealed during the interrogations that Al-Qaeda’s operations in the region were funded through the Saudi based Al-Harmain Islamic Foundation.

The War on Terror is far from over, the use of charities and non-governmental organizations as a means of terror financing stand out for a variety of reasons, foremost being the fact that the humanitarian nature of these charities and NGO, places their offices and employees on the ground in conflict zones, without raising much suspicion. In conflict zones, the weakness and inability of the state to provide for the basic needs of the citizenry stands exploited. These soft states can neither monitor these organizations nor provide for the people, making the ground extremely fertile for terror outfits to have front organizations to fund their activities. Charities are also used to raise funds and subsequently become vehicles for laundering and transferring them. They are perfect covers for terrorist operatives who gain the sympathy and support of the local population, who will provide them cover, protection and alibies when needed.

The efforts to deny terrorists, the ability to rain funds through charities has met with some success in the Western world. The major tools to achieve this has been awareness campaigns. The lead and recommendations provided by the Financial Action Task Force (FATF) on money laundering has also helped many countries combat money laundering domestically and in coordination with regional and international partners. Freezing of terror related funds is also a deterrent.

The now infamous National Action Plan also calls for choking of terror financing. A National Terrorists financing call was also established. FIA, the State Bank, FBR and intelligence agencies are to jointly operate this cell. Suspicious accounts have been frozen. Pakistan has so far frozen the accounts of 5000 suspected militants, of about 3 million dollars. However, the fact that Pakistan’s economy is largely undocumented, remains a factor. Moreover, as rightly pointed out by Shahid Kardar, former Governor State Bank, that Pakistan is the only country in the world that has legally recognized the category of “non-fillers” of income tax returns, does not help the situation.

Concerns about the resurrection of banned groups also remain on the table. The government either lacks the capacity or the political will to completely ban individuals and groups from operating in the field. Political parties of all shades have accommodated and facilitated organizations that are not completely clean for electoral gains. Banners of banned organizations having terror links are seen openly displayed in the various cities of Pakistan this Ramadan, a month where the philanthropy by Muslim devout is the highest. Although those responsible say that the provinces were put on notice even last year. They continue to function and operate freely without any fear inspite of bans and legislation as if sure of some support, somewhere.

Individual donations and support from small businesses in rural and urban areas is an even bigger challenge. Documentation is next to impossible. There are no prevention mechanisms. The foot soldiers of these organizations operate with impunity at public transport junctions and in public transports, outside mosques and around small business centers going from shop to shop collecting funds. Those donating are partly convinced of their cause and are largely unaware of their terror linkages. Their humble outfits and attitude gives them immediate acceptability. There is no alternative narrative in circulation. The concept of clean charity, donating wisely, linkages of charities and terrorist organizations and of their fund raising mechanisms are non-existent on the ground. This inconspicuous donor is a huge contributor to terror financing who is neither identified, nor reached. The so-called awareness campaigns are for the converted. This is also very damaging because these people not only give them money for sustenance, but are also their sympathizers and may be cultivated as facilitators of terror activities.

Technology has also given a huge boost to terror financing and must be addressed. Social media is not just used to turn hearts and minds, but also is an easy access to the wallets of the vulnerable. 41 of Pakistan’s 64 banned outfits are active on the Facebook. Terror operatives are apt at accommodating to changing counter terrorism environment and finding innovative ways to continue.

The War on Terror can never be won unless a collective effort to choke terror financing is in place. Pakistan has taken some efforts to remain off the terror list. However, real steps at grass root level need to be taken, because it’s not about remaining off the terror list, it’s about our survival.

(Dr. Huma Baqai is an Associate Professor in Institute of Business Administration, Karachi in the Department of Social Sciences and Liberal Arts)

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