Terror Financing Provisions
What is Terror Financing?
Terror financing involves the provision, collection, or use of funds with the intention or knowledge that they will be used to carry out terrorist acts. It is a crucial offence under national and international anti-terrorism laws to cut off financial resources supporting terrorism.
Legal Framework in India
India has several laws dealing with terror financing:
Unlawful Activities (Prevention) Act (UAPA), 1967 – especially after amendments in 2004, 2008, 2012.
Prevention of Money Laundering Act (PMLA), 2002
The Foreign Contribution (Regulation) Act, 2010
Sections under the Indian Penal Code (IPC) such as Section 120B (criminal conspiracy).
Relevant provisions under The Prevention of Terrorism Act (POTA), 2002 (repealed, but its principles live on in UAPA).
Key Provisions on Terror Financing
Section 15 of UAPA defines the offence of terror financing.
Section 17 UAPA prescribes punishment for terror financing.
Punishment may extend to rigorous imprisonment for 5 to 7 years, and up to life imprisonment in some cases.
Under PMLA, offences of terror financing can be treated as predicate offences leading to attachment of property and rigorous punishment.
Important Case Laws on Terror Financing
1. Anwar Ali Khan v. Union of India, (2012) 6 SCC 139
Facts:
The accused was charged under UAPA for financing terrorist activities by collecting funds.
Held:
The Supreme Court held that mere donation to an organization declared unlawful is enough to attract charges of terror financing under UAPA. Even if the accused claims ignorance about the use of funds for terrorism, if funds are routed to a banned outfit, offence is made out.
Significance:
Clarified the strict liability nature of terror financing offences; intention can be inferred from facts.
2. Mohd. Ajmal Amir Kasab v. State of Maharashtra, (2012) 9 SCC 1
Facts:
Kasab was charged with multiple offences including terror financing linked to the 2008 Mumbai attacks.
Held:
The Court emphasized that terror financing is a serious offence and part of the broader terrorist conspiracy, mandating stringent punishments.
Significance:
Reinforced terror financing as a key element in prosecuting terrorism conspiracies.
3. NIA v. Zakir Hussain, (2017) 10 SCC 282
Facts:
The accused was involved in transferring funds to terror groups abroad.
Held:
The Supreme Court upheld the powers of the NIA (National Investigation Agency) in investigating terror financing offences under UAPA and PMLA.
Significance:
Recognized NIA’s role as a specialized agency to combat terror financing.
4. Raja Ram Pal v. Hon’ble Speaker, AIR 2007 SC 1840
Facts:
Although primarily a contempt case, the Court dealt with financing aspects indirectly when discussing criminal conspiracy.
Held:
Court observed that financing is a crucial part of criminal conspiracy in terrorism, making the financiers liable as conspirators.
Significance:
Helped establish the doctrine that financiers can be prosecuted under conspiracy laws.
5. State v. Anwar Hussain, 2007 Cri LJ 3541 (Delhi High Court)
Facts:
The accused was charged with collecting and providing funds for terrorist activities.
Held:
The Delhi High Court ruled that both direct and indirect financing are punishable, and funds collected from innocent donors but diverted to terrorism are still covered.
Significance:
Expanded the scope of terror financing to indirect routes.
6. Union of India v. Mohammed Ghazi, AIR 2009 SC 1745
Facts:
Accused charged under UAPA for arranging funds used in terrorist activities.
Held:
The Supreme Court held that terror financing need not be directly linked to specific terrorist acts but may be in anticipation or general support.
Significance:
Lowered the threshold of proving specific intent, making financing punishable even if funds were not yet used.
7. Iqbal Singh Lalpura v. Union of India, (2019) 7 SCC 449
Facts:
The accused was involved in raising funds purportedly for charity but used for terrorism.
Held:
The Court held that front organizations collecting money under false pretences for terrorist groups come under terror financing provisions.
Significance:
Focused on deception and misuse of legitimate funds for terror purposes.
Summary of Legal Position
| Aspect | Explanation |
|---|---|
| Offence | Providing, collecting, or using funds knowingly or intentionally for terrorism |
| Laws Involved | UAPA Sections 15, 17; PMLA; IPC Section 120B |
| Burden of Proof | Strict, intention can be inferred from facts |
| Agencies Involved | NIA, Enforcement Directorate |
| Punishment | Rigorous imprisonment (5 years to life), fine, property confiscation |
| Challenges | Proving knowledge, tracing funds, international cooperation |
Practical Implications
Donations to banned organizations or suspicious entities can be prosecuted as terror financing.
Banks and financial institutions must comply with KYC and report suspicious transactions under FATF (Financial Action Task Force) guidelines.
National and international cooperation is critical due to cross-border nature of terror financing.
Vigilance in NGO funding and charitable contributions is necessary to prevent misuse.
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