New Delhi: The government’s efforts to deal with the menace of terror financing has hit a road block with no state government sharing information on national risk assessment on threats to various financial institutions and capital market. Following a recommendation of the Financial Action Task Force (FATF), an inter-governmental body that looks after how to combat money laundering, terrorist financing and other related threats, the centre set up a working group to asses the terror threat, its vulnerability in banking, insurance, capital market and financing institutions.
The group had sent a letter on 19 August to all state governments and union territories along with the three templates on “terrorism threat", “terrorism financing threat" and “terrorism financing vulnerability" asking them to reply by 30 August. “So far, no response has been received from any of the state governments or union territories," a senior government official said.
The first template on “terrorism threat" aims to determine the extent of the threat based on the sources as identified through enforcement and intelligence data on terrorism in the jurisdiction and related financing information. The template collects data on the organisations and individuals that pose terrorism threat to the jurisdiction. It requires information on terrorism cases which includes number of reported or investigated cases, number of convictions, number of international assistance requests received, sent, property damage.
Qualitative information on future trends, other intelligence, the level of terrorism threat—low, medium or high, level of sophistication of operation, organisation average costs of operation, annual operational budget of operation, main income sources, main sectors or channels abused and originating jurisdiction of funds, the impact of terrorism financing threat—low, medium or high are other information which the state governments have to provide.
The second template on “terrorism financing threat" aims at identifying the direction of terrorism financing funds and the sources and channels that are being used for terrorism financing, using enforcement data and typology information as indicators. It seeks information on direction of funds, sources, criminal activity channels and overall terror financing threat.
On terror financing cases, it requires information on number of cases investigated, prosecuted, convicted, number of persons convicted, number of case files sent to law enforcement agencies, number of international assistance requests, received, sent, amount of terror financing funds seized or frozen or confiscated. On qualitative data, it requires information of Financial Intelligence Unit-Intelligence on terror financing, FATF mutual evaluation report (reference to source and destination of funds if available) on terror financing and estimation of undetected terror financing funds (incoming and outgoing). Lastly, it requires information on terror financing threat whether it is high, medium or low.
The third template on “terrorism financing vulnerability" aims at determining the strength of terrorism financing controls in the country context. It requires information on quality of legislation, quality of intelligence, effectiveness of terror financing related STRs, monitoring and analysis, adequacy of resources, effectiveness of international cooperation, awareness and commitments of terror financing, geographic and demographic factors and over all vulnerability of terror financing. All this information is to be classified according to strengths and positive aspects, weaknesses gaps and challenges, data, input from FATF, mutual evaluation report and negative impact on vulnerability.