Pakistan has a checkered past when it comes to money laundering and terrorist financing. It has misled the international community on several occasions. It has failed to take corrective institutional actions which would suppress both terror financing and money laundering.
Pakistan’s inadequate actions against domestic terror financing led the Financial Action Task Force (FATF) to place the country on its “grey list” three times between the years 2008 and 2022: from Feb. 2008 to June 2010, then from Feb. 2012 to Feb. 2015, and finally from June 2018 to Oct. 2022.
In 2018, the Asia-Pacific Group (APG), a FATF-associated body, conducted an onsite mutual evaluation visit from Oct. 8 to 19. The subsequent 2019 Mutual Evaluation Report identified significant deficiencies in Pakistan’s anti-money laundering and counter-terrorist financing regime, including in its implementation of the FATF action plan.
In 2019, FATF noted in a public statement following the Paris plenary (Feb. 17-22) that Pakistan did not demonstrate a proper understanding of the terror financing (TF) risks that 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 (HQN), and persons affiliated with the Taliban posed.
In 2022, Hafiz Saeed, the mastermind of the 2008 Mumbai terror attacks and founder of Lashkar-e-Taiba (LeT), was sentenced to 33 years in jail. Interestingly, this sentence was based on terror financing charges, rather than charges related to actual terrorist acts.
Yet despite all the documented evidence indicating Pakistan’s support for terror outfits, the FATF issued a statement that Pakistan had met all 34 items on its action plans. The task force subsequently removed Pakistan from its grey list during the plenary session held in Oct. 2022 in Paris, France.
However, as per the credible records and open-source intelligence (OSINT) investigations, Pakistan continues to promote terrorism from its soil. Terror groups now operate through several proxies, and unabashedly continue funding, financing and promoting Islamic terrorism. However, there have been some changes in their funding methods.
For instance, Jaish-e-Mohammed (JeM), or the Army of Mohammed, is listed in the United Nations 1267 Committee’s consolidated sanctions list. The governments of the U.S., U.K., Canada, New Zealand, India and Pakistan consider it a proscribed terrorist organization. Based in Pakistan, JeM operates primarily in Indian-Administered Jammu and Kashmir (JK).
According to a report from the Parliament of Australia,
JeM was founded in 2000 by Maulana Masood Azhar, a radical Islamic scholar and jihadist leader, following his release from an Indian jail in exchange for 155 hostages hijacked aboard an Indian Airlines aircraft on 31 December 1999. When released from prison, Azhar did not rejoin his former group, Harakat ul-Mujahideen (HuM). Instead, Azhar formed JeM, reportedly with support from Pakistan’s Inter-Services Intelligence (ISI), the Afghan Taliban, Usama bin Laden and several other Sunni extremist organizations in Pakistan.
Some of JeM’s notable attacks outside Kashmir include the 2001 assault on India’s parliament building; the 2002 murder of U.S. journalist Daniel Pearl; and two 2003 assassination attempts against Pakistani President Parvez Musharraf. JeM is well trained and supported. Consequently, it poses a terrorist threat to India and Pakistan, as well as to Western targets based in both of these countries.
JeM uses violence in pursuit of its stated objective of forcing the withdrawal of Indian security forces from Kashmir and uniting Kashmir with Pakistan under Islamic Sharia law. JeM (including its chief Masood Azhar) also endorse the wider aim of establishing an Islamic caliphate across South Asia and expelling Hindus from the Indian subcontinent. JeM is violently opposed to all other religions, including Shia Islam.
In its funding, JeM has shifted from using banks to Easypaisa, digital wallets, and crypto (USDT).
Local media reported that JeM has established a new mechanism with the support of Pakistan’s Inter-Services Intelligence (ISI), which collects funds. It is using digital wallets such as “EasyPaisa” and “Sadapay.” Family members of its founder and most wanted terrorist, Masood Azhar, control these. They use them to bypass scrutiny from global agencies such as the FATF.
JeM is also raising money on the pretext of Gaza relief aid. Hammad Azhar, son of Masood Azhar, is leading JeM’s efforts to raise money for terror activities via Gaza Aid. He asks women in Gaza to make videos praising him for his charity works. His social media alias is Qaisar Ahmad, and he asks everyone to donate to his Easypaisa bank account under the name of Khalid Ahmed, a separate alias. He receives donations from Pakistan and Gulf countries.
Another new funding method JeM uses is mosque construction. JeM has reportedly launched a massive fundraising drive in Pakistan under the guise of building over 300 mosques.
The terror outfit started the online fundraising campaign through digital wallets to collect 3.91 billion Pakistani rupees (Rs), that is, $14 million U.S. dollars, for constructing 313 new markaz (central) buildings, local media reported.
On social media platforms such as Facebook and WhatsApp, JeM-linked proxy accounts (such as those used by JeM commanders) have posted posters, videos and a letter from Masood Azhar, urging supporters to donate wholeheartedly. They say that each mosque requires Rs 12.5 million ($45,000 USD) for construction and smooth operations.
In addition to these accounts, over 250 EasyPaisa wallets are reportedly used to fundraise. Alongside social media appeals, the terror outfit circulated an audio recording of Azhar’s brother, Al Saif, via its official propaganda channel, MSTD Official. The message urged supporters to contribute 21,000 Pakistani rupees ($75) per person, the officials said.
The 3.91 billion-rupee fundraising drive would secure JeM’s operational and weapons financing for at least a decade, Indian officials said.
JeM is also aided through a winter survival kit, which was launched via a public fundraising campaign seeking contributions for its fighters operating in Kashmir. Specific items and their costs are listed, including a coat, boots, blanket, gloves, socks and similar items. These kits are given to their terrorists.
Meanwhile, another terrorist group, LeT, has shifted to direct wallets. LeT has started collecting funds directly into its wallets instead of bank accounts, in order to dodge FATF scrutiny.
Lashkar-e-Taiba (LeT), also known as Army of the Righteous, was formed in the late 1980s. LeT is one of the largest and most proficient of the Kashmir-focused militant groups. The United States and United Nations have designated LeT an international terrorist organization.
Based in Pakistan’s Punjab Province and in Pakistan-occupied Kashmir, it has “launched humanitarian projects as a means of circumventing sanctions,” according to the official website of the US Congress. LeT was responsible for the Nov. 2008 terrorist assault in Mumbai, India, as well as several other high-profile attacks. During the Mumbai attacks, terrorists used automatic weapons and grenades to attack several sites, murdering more than 160 people.
Pakistani authorities in April 2015 released on bail the head of LeT operations, Zaki ur Rehman Lakhvi, pending prosecution of him and several other LeT leaders for the Mumbai attacks.
LeT recruits internationally, as evidenced by the arrest in the United States of Jubair Ahmed in 2011, Headley’s arrest in 2009, and the indictment in 2003 of eleven LeT terrorists in Virginia.
In 2003, authorities also disrupted an LeT plot to attack Australia, and in 2009 LeT put on hold a plot to attack Denmark in retaliation for cartoons drawn of Islam’s prophet Muhammad.
LeT maintains facilities in Pakistan, including training camps, schools, and medical clinics. LeT coordinates its activities through its front organization, Jamaat-ud-Dawa (JuD).
LeT is also collecting donations under the guise of flood relief. A banner advertised an appeal for donations to fund boats which would carry out rescue activities in flood-affected areas of Pakistan. JuD/Pakistan Markazi Muslim League (PMML)’s Khidmat Khalaq Wing, Gujranwala would conduct these activities. The amount sought for a rescue boat is 1,200,000 Pakistani rupees ($4,300).
Islamic terrorist organizations – including those active in Pakistan and Kashmir – are diversifying their funding methods and finding ways to bypass scrutiny by global agencies. They are exploiting humanitarian activities, mosques, rescue missions and wars to raise money internationally — including in the U.S. This allows them to spread militant Islamic messages and increase support for their terrorist activities.
Ultimately, the goal of their ideology is to create a global caliphate consisting of Islamic states. They want to conquer and dominate all non-Muslim nations. This includes the imposition of Sharia law, which is the totalitarian Islamic legal code.
The world has seen many times what happens when Islamic supremacists and jihadists take control of a country – from the Muslim Brotherhood-ruled Egypt to Iran, Syria, Turkey, Afghanistan and Pakistan, amongst others. How alert is the West to these terror groups and their new deceitful funding methods? And more alarmingly, how driven is the West to fight against those Islamist groups whose religiously motivated ambitions have not changed, and who have even gained significant success since the seventh century?
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