ED cracks down on trader-terror nexus across LOC

In the first such case, four traders engaged in business across the Line of Control in Jammu and Kashmir have been booked by Enforcement Directorate in connection with alleged hawala racket for Lashkar-e-Tayiba terror outfit.

Cracking down on financial terror, ED, which had sent one of its senior officers to the Valley for reviewing hawala cases, decided to take up the investigation under Prevention of Money Laundering Act PMLA, official sources said.

Jammu and Kashmir police had busted a hawala racket in 2009 involving traders and businessmen in Punjab and Jammu, who allegedly channelised funds to Lashkar terrorists in the Kashmir Valley and used to get heavy percentage in return.

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This is the first case taken up by ED after the cross-LoC trade began in October 2008.

The sources said terror groups were taking advantage of the absence of legal banking facilities for trade across the Line of Control which is based on a barter system.

Police had arrested Mushtaq Ahmad, a Budgam resident and businessman, when he was handing over Rs 10 lakh to an over-ground worker, identified as Abdullah, who was also arrested.

According to the modus operandi, a Jammu-based businessman Suraj Singh and a Kashmiri trader from Kulgam set up companies which would receive goods from across the LoC via the Srinagar-Muzaffarabad road and Chakada Bagh in Poonch.

These goods were sent to two Amritsar-based businessmen identified as Vipin Kumar and Sanjeev.

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The two Amritsar businessmen, who were also arrested along with Suraj Singh, would send the cash directly to Mushtaq who would send it to Lashker terrorists and in return got cuts to the tune of 35 to 40 per cent, the sources said.

Financing of terror groups has been high on the agenda of the government and a high-level meeting was chaired by Union Home Secretary R K Singh in the Kashmir Valley recently to review the cases.

The home secretary had asked all stakeholders to choke the funding of terror and separatist groups in Jammu and Kashmir.

The Centre has constituted Combating of Funding of Terrorist cell within the Union home ministry. This is the first such cell and functions under the ministry of home affairs but will be headed by an officer of the Indian Revenue Service (Income Tax), the sources said.

The cell liaises with agencies like the Department of Revenue Intelligence, Intelligence Bureau, Income Tax Department, Enforcement Directorate, CBI and Directorate General of Customs and Central Excise Intelligence and scrutinises information collected from central police organisations and the Financial Intelligence Unit.

Terror Funding and Fake Currency Cell in National Investigation Agency has also been constituted to focus on investigating the flow of money to anti-national activities.