NEW DELHI: Global terror financing watchdog Financial Action Task Force (FATF) has raised concerns over the misuse of e-commerce platforms and online payment services by terrorist organisations, citing examples from India, including the 2019 Pulwama attack and the 2022 Gorakhnath Temple incident.
In its report titled Comprehensive Update on Terrorist Financing Risks, the FATF also highlighted the issue of state sponsorship of terrorism, stating that “certain terrorist organisations have been and continue to receive financial and other forms of support from several national governments”, based on publicly available information and inputs from member delegations.
“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 the 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 FATF said.
In June, while condemning the April 2025 Pahalgam terror attack in which 26 people were killed, the FATF said such acts would not have been possible without financial backing. It had indicated it would release a “comprehensive analysis of terrorist financing” based on case studies from its global network of 200 jurisdictions.
Citing a case study from India, the FATF said a key component of the improvised explosive device (IED) used in an attack—aluminium powder—was procured via the e-commerce platform Amazon. The material, it noted, was used to enhance the impact of the blast.
The report also referred to the Indian investigation into the 2019 Pulwama attack, which revealed that the incident was orchestrated by Jaish-e-Mohammed (JeM). Nineteen individuals were charged under the Unlawful Activities (Prevention) Act, including provisions related to terror financing. “Among those charged were seven foreign nationals, including the suicide bomber. LEAs also recovered moveable and immovable assets connected to the attack, such as vehicles and terrorist hideouts,” it added.
Indian authorities have repeatedly highlighted Pakistan’s continued support for terrorism and its alleged diversion of multilateral funds towards arms procurement. India maintains that Pakistan provides safe haven to designated terrorists, and, according to sources, believes this warrants Pakistan’s return to the FATF “grey list”.
The FATF flagged the increasing abuse of e-commerce platforms and online marketplaces by terrorists. It noted that such platforms are being used for operational procurement—including equipment, weapons, chemicals, and 3D printing materials.
“Terrorists have used these platforms to sell items to finance their projects and operations, including lower-value items that were previously not in demand,” the report said. “They can be used for fund-moving purposes inspired by trade-based money laundering schemes. Traded goods can indeed offer disguise to value being transferred from an accomplice to another member of the network. In such a scheme, the first actor would purchase items, send them to his accomplice through a platform, for the latter to sell in another jurisdiction and use the profits to finance terrorism.”
Detailing another case study, the FATF referred to the April 3, 2022, attempted breach at Gorakhnath Temple, where an individual influenced by Islamic State in Iraq and the Levant (ISIL) ideology attacked security personnel before being apprehended.
The financial investigation revealed the accused had transferred ₹669,841 (USD 7,685) via PayPal to foreign countries in support of ISIL, using international third-party transactions and VPN services to obscure his IP address. He also received ₹10,323.35 (USD 188) from a foreign source.
Further scrutiny found that the individual paid a VPN provider via his bank account. A detailed analysis of his PayPal account, accessed through email, showed approximately 44 international third-party transactions amounting to ₹669,841 (USD 7,736). He had also received funds from a foreign PayPal account.
“Due to the suspicious nature of these transactions and the potential for TF, PayPal suspended the accused’s account, thereby preventing further illicit fund transfers,” the FATF noted, citing a case study provided by India’s Ministry of Finance.
The report added: “As the offer of online payment services from Fintech companies grew substantially over the last 10 years, cases of terrorists opting for those services can be observed across all contexts, especially as it offers an opportunity to diversify fund-moving channels. These payment services also appear attractive for terrorist organisations for the low-cost and fast money transfer solutions they offer, with the possibility for enhanced opacity on initiators and beneficiaries through pseudonyms or fake accounts.”