In a major revelation, the Financial Action Task Force (FATF) has highlighted that e-commerce platforms and online payment services are increasingly being misused for terror financing, citing examples from India including the 2019 Pulwama terror attack and the 2022 Gorakhnath Temple incident. The global anti-terror financing watchdog issued these observations in its latest report titled 'Comprehensive Update on Terrorist Financing Risks'. According to the FATF, digital platforms are also becoming a tool for terrorists to mobilise funds, evade detection, and finance deadly operations. The report mentions that 40 CRPF jawans were killed in the Pulwama attack, a tragedy that shocked the nation and the world, and adds that the use of online channels for funding such attacks remains a growing concern.
FATF flags state sponsorship angle
"Delegations reported on this trend by referring to the use of state sponsorship for TF (terror financing) either as a fundraising technique or as part of the financial management strategy of certain organisations engaging in terrorist acts. Several forms of support have been reported, including direct financial support, logistical and material support, or the provision of training," the Financial Action Task Force (FATF) said.
Pulwama, Pahalgam cases under scanner
In June, the FATF, while condemning the April 2025, Pahalgam terror attack, in which 26 people killed, and saying such attacks would not have been possible without financial support, had said it would come out with a "comprehensive analysis of terrorist financing", compiling cases provided by its global network consisting 200 jurisdictions. Giving the case study of the use of an e-commerce platform for the procurement of materials for terrorist attack in India, the FATF said a key component of the improvised explosive device used in the attack -- aluminum powder -- was procured through the EPOM Amazon. This material was used to enhance the impact of the blast.
Pulwama attack probe and findings
In February 2019, a suicide bombing targeted a convoy of Indian Security forces in Pulwama in Jammu & Kashmir, resulting in the deaths of 40 soldiers. India's authorities concluded that the attack was orchestrated by Jaish-e-Mohammed (JeM). As a result of the investigation, 19 individuals were charged under relevant provisions of the Unlawful Activities (Prevention) Act, including sections related to TF. Among those charged were seven foreign nationals, including the suicide bomber. LEAs also recovered movable and immovable assets connected to the attack, such as vehicles and terrorist hideouts.
India points to Pakistan's role
Indian authorities have repeatedly highlighted Pakistan's persistent support for terrorism and its funnelling of multilateral funds for arms procurement. India has consistently held that Pakistan has given safe haven to designated terrorists and according to sources, India views that such action by Pakistan warrants that the country be put in the "grey list" of the FATF. The FATF report flagged that terrorists have been abusing e-commerce platforms and online marketplaces and said terrorists have used such platforms for their operational procurement (equipment, weapons, chemicals, 3D-printing material). EPOMs can also be used by terrorists to sell items to finance their projects and operations, including lower-value items that were previously not in demand.
Online payments aid terror funding
The FATF in its update on TF risks also highlighted the methods used to raise, move, and manage funds and other assets for terrorist financing purposes and said online fund transfers using payment services platforms offer less traceability and transparency compared to wire-transfer, making it harder to clearly identify initiators and recipients of transfers. Giving a case study on the use of online payment service and VPNs to fund lone actor terrorist act, the FATF cited the April 3, 2022, Gorakhnath Temple attempted breach incident wherein an individual, influenced by Islamic State in Iraq and the Levant (ISIL) ideology, attacked security personnel leading to immediate arrest.
The financial investigation revealed that the individual transferred Rs 669,841 (USD 7,685) via PayPal to foreign countries in support of ISIL, using international third-party transactions and using VPN services to obscure the IP address. He also received Rs 10,323. 35 (USD 188) from a foreign source.
Transactions linked to foreign ISIL cells
Further financial scrutiny uncovered that the accused had made a payment to a VPN provider through his bank account to secure these services. A comprehensive analysis of the accused's PayPal transactions, obtained via email, indicated that about 44 international third-party transactions totalling Rs 669,841 (approximately USD 7,736) had been made to foreign accounts. Additionally, the accused received funds from a foreign account through PayPal. It should be mentioned here that the investigation also uncovered that the accused had sent money to multiple individuals identified as ISIL followers in foreign jurisdictions to support terrorist activities.
(With inputs from PTI)
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