FATF Flags E-Commerce in Terror Financing Risks
The Financial Action Task Force (FATF) has issued a critical report in 2025 denoting the growing threat posed by the misuse of e-commerce and digital payment platforms for terrorist financing. This comprehensive update reveals that terror groups are increasingly exploiting online systems to fund operations and evade detection. The report stresses the urgent need for global cooperation and improved detection mechanisms to counter these evolving methods.
Evolution of Terror Financing Methods
Terrorist financing techniques are rapidly changing. Traditional funding like cash smuggling and informal transfers are now supplemented by digital tools. Online shopping, social media, gaming platforms, and digital wallets are being used to move and launder funds. These methods are tailored to local contexts, making detection harder. Many countries lack the capacity to fully identify and disrupt these activities.
Case Studies – Pulwama and Gorakhnath Attacks
The report cites the 2019 Pulwama attack where explosives were bought via Amazon. The attackers used e-commerce platforms to procure materials, exposing vulnerabilities in online marketplaces. Another case is the 2022 Gorakhnath Temple attack, where the attacker received ₹6.7 lakh through PayPal. The attacker used VPNs to conceal transactions. PayPal detected suspicious activity and blocked the account, preventing further misuse.
Misuse of E-Commerce Platforms
E-commerce sites are increasingly exploited for money laundering. Terror groups buy goods online and ship them internationally. These goods are sold locally to generate clean money. This cycle helps hide the true origin of funds. The FATF warns that without strict oversight, these platforms risk becoming conduits for terror financing.
Challenges in Global Detection and Prevention
The report reveals that 69% of assessed countries fail to effectively investigate or prosecute terror financing. Weak regulatory frameworks and poor data sharing hinder efforts. Terror groups exploit these gaps to sustain operations. FATF urges enhanced cooperation between governments and private sectors. Sharing data on suspicious payments, travel, and social media activity is critical.
International Support to Terrorist Groups
The report also marks that some terrorist organisations continue to receive direct or indirect backing from certain states. This support includes financial aid, weapons, and training. FATF calls for global pressure to end such sponsorship, which undermines international peace and security.
Recommendations for Governments and Providers
FATF advises governments to strengthen legal frameworks and enforcement. Digital service providers must implement robust monitoring to detect suspicious transactions. Developing advanced tools for pattern recognition in payments and online behaviour is essential. Collaboration with international bodies like the United Nations Counter-Terrorism Committee Executive Directorate (UN CTED) is recommended.
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