Discuss counterfeit currency and money laundering as major sources of terror funding in India. State the actions being taken at…

Counterfeit currency and money laundering are major financial lifelines of terrorism in India. High-quality Fake Indian Currency Notes (FICN), pushed by Pakistan-based syndicates through porous borders, fund groups such as Lashkar-e-Taiba while undermining economic stability; hence BNS Section 113 (like the UAPA) treats producing or circulating high-quality counterfeit currency as a terrorist act. Money laundering, from cross-border hawala to crypto-assets and misuse of NPOs, lets terror groups hide the origin and movement of funds.

International Measures The 1999 UN Convention for the Suppression of the Financing of Terrorism and UNSC Resolution 1373 oblige states to criminalise terror financing and freeze terrorist assets, while the 1267 sanctions regime lists terrorists globally. The Palermo Convention enables mutual legal assistance and extradition, the Egmont Group links Financial Intelligence Units, and India's 'No Money for Terror' conference (2022) pushed cooperation.

Role of FATF and Compliance The FATF sets global standards through its 40 Recommendations: Recommendation 5 criminalises terrorist financing, 6 imposes targeted financial sanctions, 8 protects non-profits from abuse and 15 covers virtual assets. It checks compliance through peer mutual evaluations and follow-ups, and places deficient jurisdictions under increased monitoring (grey list) or a call for action (black list); Pakistan's grey-listing (2018–2022) forced reforms.

Member states comply by translating the standards into law and institutions. India uses the PMLA, 2002, the UAPA (amended in 2019 to designate individual terrorists), FIU-IND and the NIA's Terror Funding and Fake Currency cell, and was placed in 'regular follow-up' after its 2024 evaluation. Closing gaps on virtual assets and real-time intelligence sharing remains vital.