Pakistan Terror Groups Evolve Funding Tactics to Evade Global Scrutiny

The Financial Action Task Force (FATF) placed Pakistan on its "grey list" three times between 2008 and 2022 over inadequate measures to curb terror financing.

The Asia-Pacific Group (APG), a FATF-affiliated body, conducted an onsite mutual evaluation in October 2018. Its 2019 Mutual Evaluation Report found significant deficiencies in Pakistan's anti-money laundering and counter-terrorist financing framework, including weak enforcement of the FATF action plan, wrote Turkey-born journalist Uzay Bulut in a report published in PJ Media.

In 2019, the FATF stated that Pakistan had failed to demonstrate a proper understanding of terror financing risks posed by groups such as the Islamic State (ISIS), Al Qaeda, Jamaat-ud-Dawa (JuD), Falah-i-Insaniat Foundation (FIF), Lashkar-e-Taiba (LeT), Jaish-e-Mohammed (JeM), the Haqqani Network, and individuals linked to the Taliban.

Despite these concerns, the FATF later stated that Pakistan had met all 34 action plan requirements and removed the country from the grey list during its plenary session in France in 2022.

However, the PJ Media report claimed that Pakistan continues to promote terrorism, with militant groups now operating through proxy organisations and adopting new funding methods.

"Based on credible records and open-source intelligence investigations, terror groups continue to finance and promote Islamic terrorism, though their methods have evolved," the report stated.

According to the report, Jaish-e-Mohammed, which is listed under the United Nations 1267 sanctions regime and designated as a terrorist organisation by India, the US, the UK and New Zealand, has shifted to using digital wallets, mobile payment platforms and cryptocurrency, including USDT, instead of conventional banking channels.

JeM is reportedly using platforms such as Easypaisa and Sadapay, allegedly controlled by family members of its founder Masood Azhar, to bypass international monitoring. The group is also said to be raising funds under the pretext of humanitarian relief for Gaza and mosque construction.

The report claimed that JeM has launched fundraising drives for building more than 300 mosques in Pakistan.

Lashkar-e-Taiba has also reportedly shifted to collecting funds directly through digital wallets instead of bank accounts to avoid FATF scrutiny. Based in Pakistan's Punjab province, LeT has launched humanitarian initiatives to circumvent sanctions, according to information cited from the US Congress website.

The report stated that LeT maintains training camps, schools and medical facilities in Pakistan and coordinates its activities through front organisations such as Jamaat-ud-Dawa.

It added that LeT has collected donations under the guise of flood relief and rescue operations, including appeals for funds to purchase boats for disaster-hit areas.

"Terror outfits are increasingly using humanitarian projects, religious institutions, rescue missions and conflict-related campaigns to raise funds globally," the report said.

Such diversification of funding channels enables these groups to avoid regulatory oversight while sustaining militant activities and ideological outreach, it added.

- IANS