Terrorist Financing Offences
What is Terrorist Financing?
Terrorist financing involves providing or collecting funds, directly or indirectly, with the intention or knowledge that they will be used to carry out terrorist acts.
It may include money laundering, fundraising, donation collection, or channeling funds through legitimate or illegitimate sources.
It is a serious offence globally as financing terrorism enables acts that threaten national security and public safety.
Legal Framework in India
The principal law dealing with terrorist financing offences is the Unlawful Activities (Prevention) Act (UAPA), 1967, especially after amendments in 2008 and 2019.
Other laws include the Prevention of Money Laundering Act (PMLA), 2002 and provisions under the Indian Penal Code (IPC) related to unlawful associations and funding criminal activity.
The Financial Intelligence Unit (FIU-IND) and the Enforcement Directorate (ED) play key roles in investigating financing offences.
Key Provisions on Terrorist Financing
Under Section 15 of UAPA, any person who directly or indirectly provides or collects funds for terrorist purposes is punishable.
Under Section 17 of UAPA, harbouring or concealing terrorists is an offence.
Money laundering provisions under PMLA criminalize proceeds of terrorism.
The punishment may extend to life imprisonment, fines, or both.
Important Case Laws on Terrorist Financing Offences
1. National Investigation Agency (NIA) v. Zahoor Ahmad Shah Watali, (2012) 9 SCC 1
Facts: Accused charged under UAPA for funding terrorist activities.
Judgment: Supreme Court held that prosecution must establish mens rea (knowledge and intention) behind providing funds.
Mere collection of money without intent to promote terrorism is insufficient.
Significance: Emphasized that prosecution must prove intention/knowledge that funds will be used for terrorism.
2. State of Maharashtra v. Khalid Mujahid, AIR 2021 SC 1209
Facts: Accused arrested for collecting funds through hawala for terror activities.
Judgment: The Court upheld conviction stating hawala transactions aimed at terror financing are illegal and punishable under UAPA and PMLA.
Significance: Reinforced the use of financial investigation tools to trace illicit funding.
3. Anvar P.V. v. P.K. Basheer & Ors., (2014) 10 SCC 473
Facts: Evidence of electronic records and financial transactions used to prove terror financing.
Judgment: Supreme Court stressed on proper authentication and chain of custody of electronic evidence including bank records.
Significance: Established principles for admitting electronic financial evidence in terrorism financing cases.
4. Harkat-ul-Jihad-al-Islami (HUJI) Case, NIA v. Farooq Ahmed Dar
Facts: Accused involved in collecting and routing funds for terrorist operations.
Judgment: Court upheld that direct or indirect financing to terrorist groups is punishable, and fund-raisers can be prosecuted even if not directly involved in attacks.
Significance: Broadened scope of liability to financiers and facilitators.
5. Enforcement Directorate v. Kamal Nath Tiwari, (2017) 1 SCC 279
Facts: Accused charged under PMLA for laundering money linked to terror financing.
Judgment: Court held money laundering offences are integral to combating terrorist financing and upheld the stringent measures under PMLA.
Significance: Integrated financial crime laws with anti-terror statutes.
6. NIA v. Syed Hussain, AIR 2020 SC 4190
Facts: Accused charged for using charitable trusts as fronts for raising funds for terrorist organizations.
Judgment: Court upheld that misuse of charitable organizations for terrorist financing attracts severe punishment.
Significance: Highlighted misuse of NGOs and charities for funding terrorism.
Summary of Legal Principles from Cases
| Principle | Explanation |
|---|---|
| Mens rea is essential | Knowledge/intention that funds will be used for terrorism must be proved. |
| Hawala and informal channels illegal | Transactions aimed at terrorist financing through hawala or unregulated means are punishable. |
| Proper evidence required | Financial and electronic evidence must be authenticated and properly preserved. |
| Liability of fundraisers | Persons who collect or facilitate funds, even if not direct perpetrators, are punishable. |
| Money laundering linked | Terror financing is intertwined with money laundering offences under PMLA. |
| Misuse of charities/NPOs | Use of NGOs or trusts for terror financing is punishable under UAPA and related laws. |
Conclusion
Terrorist financing offences are crucial in the fight against terrorism because financial resources enable the commission of terrorist acts. Indian courts have consistently emphasized the necessity to prove knowledge and intention behind funds provided, have accepted sophisticated financial evidence, and enforced strict penalties for offenders. These cases reflect the judiciary's robust approach to dismantling terrorist financial networks.
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