Pak terror groups thriving on crime, money laundering: Report

A new government report obtained by the Pakistani media has revealed that the major source of funding for terror and extremist groups in the country is crime including extortion, smuggling and kidnapping for ransom.

The report by the Financial Monitoring Unit (FMU) in Pakistan titled "National Risk Assessment on Money Laundering and Terrorism Financing 2017" reportedly details how terror groups generate funds through criminal activities.

The News reported that the first of its kind report was planned to share with the World Bank (WB), the Financial Action Task Force (FATF) and Asia Pacific Group (APG) of Money Laundering. A team of assessors of all the stakeholders under the supervision of the FMU compiled the report, which revealed that Pakistan was short of adequate resources, skills and manpower to sufficiently take into account money laundering and terrorism financing.

"Annual operational budget of [these] terrorist organisations is from Rs 5 million to Rs 25 million. Average cost of operation per terror incident varies from Rs 0.5 million to Rs2.5 million depending on magnitude of incident," the 45-page confidential report revealed.

"Main sources of income of terrorists in Pakistan include foreign funding, drug trafficking, kidnapping for ransom, extortion from business, vehicle snatching, 'hawala/hundi', cash couriers, dealings in foreign exchange, contraband items in Fata and sale of items looted from Nato/ISAF containers," the report added.

On terrorism financing risks, the FMU in its report revealed that unrest in the Gulf led to mushrooming of extremist movements and militant organisation as the terrorists from hostile neighboring countries are expanding proxy war in Pakistan. Most preferred foreign destinations for parking billions of rupees and laundered money are the UAE, UK and USA followed by the South-Eastern countries.

Pakistan on request of the World Bank decided to carry out this national risk assessment exercise on money laundering and terror financing in 2015-2016. For this purpose, Islamabad formed a national team, which used the National Risk Assessment tool of the World Bank where the FMU also engaged Federal Investigation Agency, Security Exchange Commission of Pakistan, National Accountability Bureau, Anti-Narcotics Force, State Bank of Pakistan, Federal Board of Revenue and Ministry of Commerce.

According to the report, sense of money laundering threat alarmed the regulators when they seized an estimated Rs. six billion in past three years where the FIA, NAB, ANF, law enforcement agencies, Currency Declaration Units, SBP and FMU registered/investigated around 8,100 cases/complaints.

In money laundering trends, the regulators noted in the report that corruption was identified as major predicate offence while smuggling, drug trafficking, cheating and fraud, tax frauds, kidnapping for ransom and extortion remained additional factors.

Officials revealed that only one of 256 filed key cases of money laundering was decided by the courts in the last three years, adding that teams seized estimated Rs. four billion during this period.

The regulators arrested some 491 of total 664 accused involved in crimes of money laundering while special teams, under the National Action Plan, arrested 848 accused involved in money laundering, 'hawala and hundi' and illegal money changing during this period. The teams under the NAP also seized Rs. 851 million since January 2015.

Some of proscribed organisations are reportedly generating millions of dollars annually to conduct their operations within and outside the country. Among them the Tehrik-i-Taliban Pakistan, Lashkar-e-Taiba, Lashkar-e-Jhangvi and Sipa-e-Mohammad are taking the lead.