Global body alert on Islamic State’s funds

New Delhi/Paris: Concerned over an estimated $1 million a day funding received by Middle Eastern terrorist group Islamic State, 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 against entities liked to the Islamic State of Iraq and the Levant. 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 UNSC, which has named various ISIL-linked entities in its new list. ISIL is estimated to be earning as much as $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 UNSC 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.  FATF said the fig-ht against ISIL urgently needs more insight into sources and methods of their fund