Financial regulators to issue warning against Islamic State links, including India

Written by PTI | New Delhi/Paris | Updated: Oct 26 2014, 20:25pm hrs
ISILConcerned over an estimated USD 1 million a day funding received by ISIL, the Financial Action Task Force (Reuters)
Concerned over an estimated USD 1 million a day funding received by ISIL, the Financial Action Task Force has asked all countries, including India, to prevent the terror group from tapping their financial systems.

Financial sector regulators in India, including Sebi for capital markets and RBI for banking sector, are likely to soon issue similar warnings to caution institutions operating under their respective jurisdictions to put in place necessary safeguards.

Sanctions are already in place by the United Nations Security Council (UNSC) against entities liked to the Islamic State of Iraq and the Levant (ISIL).

However, it is for the first time that a public statement has been issued against this terror group by FATF, an inter-governmental grouping that sets global financial sector regulatory standards to tackle money laundering and terror financing activities.

In line with the UNSC sanctions, Sebi has asked market entities to stay cautious about any funds or entities linked to this terror group finding their way to Indian capital markets.

Following the FATF statement, Sebi and RBI among other regulatory agencies would now issue separate warnings to the entities regulated by them against dealing with ISIL-linked firms, individuals or funds.

While no instance of any ISIL-linked activities in the Indian markets has come to the fore so far, the regulator has informed stock exchanges about the updated Al-Qaida sanctions list of the United Nations Security Council, which has named various ISIL-linked entities in its new list.

ISIL is estimated to be earning as much as USD 1 million every day from oil sales, as per the US Treasury Department.

The warning from the FATF comes at at a time when the terror group is spreading its tentacles in the Middle East and the United Nations Security Council raising red flag about the terror group's funding activities.

"Deeply concerned with the financing generated by and provided to ISIL", FATF has said that all countries should take steps to prevent the terror group from accessing their financial systems.

In order to combat the threat posed by ISIL, the FATF this Friday reiterated "the need for all countries to fully implement the FATF standards to combat terrorist financing and calls on all countries to take steps to prevent ISIL from accessing their financial systems".

According to FATF, the fight against ISIL urgently needs more insight into sources and methods of their funding.

India, the United States and Japan are among the 34 member jurisdictions of the FATF.

Indicating the growing strength of ISIL, the US Treasury Department has estimated that the dreaded terror group is raising about USD 1 million from oil sales every day.

"... we estimate that beginning in mid-June, ISIL has earned approximately USD 1 million a day from oil sales," Under Secretary for Terrorism and Financial Intelligence David S Cohen said recently.

Besides, ISIL kidnaps innocent civilians to profit from ransoms paid to obtain their release.

"...ISIL raises money up to several million dollars per month through a sophisticated extortion racket," Cohen had said.

Meanwhile reiterating its recommendations on curbing money laundering activities, FATF has said that countries should ensure that non-profit organisations are not being abused by terrorist groups to raise, move, or use funds.