Strategy to deal with Terror Financing and Money Laundering

The Government has a well established strategy and institutional mechanism to effectively deal with terrorist financing and money laundering problem.

• The Unlawful Activities (Prevention) Act, 1967(UAPA) and the Prevention of Money laundering Act, 2002 (PMLA) are effective instrumentalities to combat offences relating to Terrorist Financing and Money laundering.
• A special Combating Financing of Terrorism (CFT) Cell has been created in the Ministry of Home Affairs in 2011, to coordinate with the Central Intelligence/Enforcement Agencies and the State Law Enforcement Agencies for an integrated approach to tackle the problem of terror funding.
• Also a Terror Funding and Fake Currency Cell has been set up in the National Investigation Agency to investigate Terror Funding cases.

Recent amendments to legislative structure to include terror financing

The Unlawful Activities (Prevention) Act, 1967

• The Unlawful Activities (Prevention) Act, 1967 has been strengthened by amendments in 2013
• They include

1. enlarging the scope of proceeds of terrorism to include any property intended to be used for terrorism,
2. enlarging the scope of Section 17 relating to punishment for raising funds for terrorist act by including within its scope,
3. raising of funds both from legitimate or illegitimate sources by a terrorist organization, terrorist gang or by an individual terrorist, and
4. includes within its scope offences by companies, societies or trusts.

Prevention of Money laundering Act, 2002

• The PMLA has also been strengthened in 2013 by incorporating the provisions relating to

1. removing the monetary threshold for schedule offences,
2. strengthening confiscation and provisional attachment powers with regard to money laundering investigation,
3. covering new financial institutions and designated non-financial business and professions within the scope of PMLA,
4. enhancing the powers of Financial Intelligence Unit (FIU) to access information from banks and financial institutions and
5. introduction of broad range of sanctions under PMLA including sanctions against designated Directors and employees of reporting entities.