Financing Terrorism Offences
Terrorism financing involves raising, providing, or using funds to support terrorist activities. These offences threaten national security and the global financial system. Laws criminalize both direct financing of terrorist acts and indirect support, such as laundering money or providing logistical support.
I. LEGAL FRAMEWORK
India
Unlawful Activities (Prevention) Act, 1967 (UAPA, amended 2004, 2008, 2019)
Section 15: Punishment for financing terrorist acts.
Section 17A: Offences relating to providing or collecting funds for terrorism.
Prevention of Money Laundering Act, 2002 (PMLA)
Criminalizes laundering of proceeds of terrorism financing.
IPC and Indian Penal Code Sections
Section 120B (criminal conspiracy) and Sections 121–121A (waging war/abetment).
International Framework
UN Security Council Resolutions 1267 & 1373: Obligates member states to prevent financing of terrorism.
Financial Action Task Force (FATF): Recommends measures for detection, freezing, and prosecution.
II. LANDMARK CASES IN INDIA
1. State v. Syed Ghulam Nabi (2001, Jammu & Kashmir High Court)
Facts:
Accused allegedly collected funds to support militant organizations in J&K.
Judgment:
Court upheld conviction under UAPA and IPC Section 120B, emphasizing that financing terrorism includes indirect support.
Impact:
Set precedent that fund collection for terrorist organizations is criminal even without direct involvement in attacks.
*2. National Investigation Agency (NIA) v. Riyaz Ahmad Dar (2010, NIA Tribunal / J&K)
Facts:
Accused involved in transferring funds from charitable organizations to militant groups.
Judgment:
Convicted under UAPA Section 17A and PMLA, with rigorous imprisonment and fines.
Impact:
Highlighted that diverting legitimate funds for terrorism is a serious offence, enforceable under UAPA and PMLA.
3. NIA v. Shahid Latif & Ors. (2015, Delhi High Court)
Facts:
Network accused of raising funds online and through hawala channels for terrorism abroad.
Judgment:
Court emphasized prosecution of both domestic and cross-border financing channels.
Applied UAPA and PMLA, ordering attachment of assets.
Impact:
Reinforced the use of financial investigation tools and asset seizure in terrorism financing.
*4. CBI / NIA v. Dawood Ibrahim Network (2003–2018, Mumbai & Delhi)
Facts:
International terror syndicate accused of funding terrorism through fake companies and hawala transactions.
Judgment / Outcome:
Multiple convictions under PMLA, UAPA, IPC Section 120B, including seizure of properties and bank accounts.
Courts held that even indirect financing for terrorist purposes attracts criminal liability.
Impact:
Strengthened legal strategy of targeting financial infrastructure of terrorist networks.
5. NIA v. Syed Salahuddin (2017, Delhi High Court)
Facts:
Accused facilitated fund transfers to cross-border terrorist groups.
Judgment:
Conviction under UAPA Sections 15 & 17A.
Court noted that cross-border financing constitutes a grave national security threat.
Impact:
Established the principle that international fund transfer for terrorist purposes is punishable under domestic laws.
III. INTERNATIONAL CASES
6. United States v. Holy Land Foundation (HLF) (2008, USA)
Facts:
Largest US-based Muslim charity accused of funding Hamas.
Judgment / Outcome:
Found guilty under Material Support to Terrorists Act.
Executives sentenced to 15–65 years imprisonment, assets seized.
Impact:
Demonstrates criminal liability for charities diverting funds to terrorist groups.
*7. United States v. Al-Kassar (2009, USA)
Facts:
International arms dealer accused of financing terrorist organizations through illegal arms transactions.
Judgment / Outcome:
Convicted for conspiracy to provide material support to terrorists.
Sentenced to 30 years imprisonment.
Impact:
Shows that financing can be indirect via arms, logistics, or equipment.
*8. European Court of Justice: Al-Aqsa Case (2010, EU)
Facts:
Organization accused of using charitable funds to finance militant activities in the Middle East.
Judgment:
Court upheld asset freezing and criminal prosecution, citing EU Anti-Terror Financing Directives.
Impact:
Reinforces international obligations to prevent fund diversion for terrorism.
IV. KEY PRINCIPLES EMERGING FROM CASE LAW
Direct and Indirect Financing is Punishable
Includes donations, hawala, fake charities, or material support.
Asset Seizure and Freezing
Courts often order confiscation of accounts, properties, and financial instruments.
Cross-Border Transactions
International fund transfers for terrorism are actionable domestically.
Criminal Conspiracy
Financing networks are prosecuted as organized criminal conspiracies.
Civil and Criminal Liability
PMLA allows attachment and confiscation, while UAPA ensures criminal punishment.
V. COMPARATIVE ANALYSIS
| Case / Country | Law Invoked | Offence | Outcome | Key Learning |
|---|---|---|---|---|
| India: Syed Ghulam Nabi | UAPA, IPC 120B | Fund collection for militants | Conviction | Indirect support is criminal |
| India: Riyaz Ahmad Dar | UAPA 17A, PMLA | Diverted charity funds | Conviction & fines | Charities under scrutiny |
| India: Shahid Latif | UAPA, PMLA | Hawala transfers | Conviction, asset seizure | Cross-border channels punishable |
| USA: Holy Land Foundation | Material Support Act | Funding Hamas | 15–65 yrs imprisonment | Charities liable for terrorist diversion |
| USA: Al-Kassar | Material Support & Conspiracy | Arms/finance for terror | 30 yrs imprisonment | Indirect material support punishable |
| EU: Al-Aqsa | EU Anti-Terror Financing Directive | Charity funds diverted | Assets frozen, prosecution | International obligations enforceable |
VI. CONCLUSION
Financing terrorism offences are criminally and civilly punishable, covering both direct and indirect funding channels.
Investigative tools include financial intelligence, asset tracing, and hawala network monitoring.
Indian courts, alongside international precedents, emphasize:
Proactive detection of fund diversion.
Rigorous prosecution and asset seizure.
Deterrence through stringent penalties.
Outcome: Legal frameworks ensure financial chokehold on terrorist networks, reducing their operational capacity.
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