Bangladesh’s Long Road Ahead in Countering Terrorist Fundraising

In early May, a Spanish court sentenced a British citizen of Bangladeshi origin to seven years in prison for financing and supporting terrorism. The convict, Ataul Haque, brother of the head of Islamic State’s technological wing (killed in a targeted U.S. drone strike in Syria in 2015), had reportedly sent 47,000 euros from Spain to Bangladesh via China using an informal channel known as “hundi.” The money, reportedly intended to finance the activities of the Islamic State in Bangladesh, was seized and its carriers and recipients had been arrested by Bangladeshi authorities in late 2015. Ataul Haque is one of many sources through which Bangladeshi militants have, and continue to, access financial resources.

Although external funding for terrorism, such as the case mentioned above, remains an important challenge, funding from internal sources in Bangladesh is no less important. The latter sources of terrorist fundraising in Bangladesh can be garnered through self-funding, criminal activities, and legitimate businesses. Funds raised from domestic fronts are arguably harder to detect, especially as they tend to be enmeshed within a broader and deeply entrenched economic ecosystem that includes legitimate businesses. Moreover, there are questions about who should respond to this insidious threat and how. While the first two categories seem to be generally known and being dealt with by the law enforcement agencies, legitimate businesses as a source of terrorism financing are still a grey area in terms of how they should be countered.

Self-funding or monthly contributions by group members are an important internal source of funding for Bangladeshi militant groups. This is applicable for both Islamic State (IS) and al-Qaida (AQ)-centric groups operating in the country. Monthly contributions or “yanat” can be as low as 10 Bangladeshi taka (12 cents); contributions depend on the financial capability of individual members. There are instances when members have contributed large donations for militant organisations. The 8 million Bangladeshi taka donation by Rokonuddin Khondoker, a pediatrician, is a case in point. Khondoker traveled with his family to Syria in October 2015 to work at an IS-controlled hospital in Raqqah. An ex-major from the Bangladesh Army, Jahidul Islam, also reportedly donated his full retirement benefits totaling 10 million Bangladeshi taka to Neo-Jama’atul Mujahideen Bangladesh (Neo-JMB), an IS-centric group in Bangladesh. Jahidul was later killed in a law enforcement raid at a militants’ den in Dhaka. Another individual, Tanveer Kaderi, donated to the Neo-JMB the sale proceeds of his apartment amounting to 10 million Bangladeshi taka.

Both the AQ-linked JMB and its IS-linked offshoot (Neo-JMB) have raised funds from industrialists. For example back in 2017, Bangladeshi authorities arrested a garment manufacturer who gave 400,000 Bangladeshi taka to a militant who is believed to have joined IS in Syria in 2015 and 200,000 taka to the wife of a JMB leader who was arrested in November 2016. Terrorist groups in Bangladesh also tap obligatory donations especially during Muslim festive seasons such as Eid ul-Fitr and Eid al-Adha. While most of the donations come from members, supporters or sympathizers, the groups have raised public funds by masquerading as community organisations providing social services or building infrastructure for religious purposes.

AQ-centric groups, namely the JMB and Harkatul Jihad al Islami-Bangladesh (HuJI-B), have reportedly turned to criminal activities such as bank robberies to finance their activities. A 2019 media report indicated that in the case of HuJI-B, at least 30 percent of the proceeds from robberies account for the group’s funds. In this context, it is significant that some JMB recruits have criminal backgrounds including as robbers. These persons were possibly recruited by senior JMB members in prisons. In 2016, Bangladeshi authorities arrested seven alleged members of JMB who had confessed during their interrogation to taking part in robberies to raise funds.

But beyond these sources of terror financing lies fundraising from legitimate businesses. Although profits from legitimate businesses are not a new source of terrorism financing in Bangladesh, terrorists are increasingly seeking it partly because they are trying to ensure a sustained source of income.

According to a 2014 media report, JMB leaders reportedly invested the proceeds from donations (through “hundi” channels) into legitimate businesses including companies in various industries, as well as land and property in Dhaka. JMB reportedly owns land and other properties worth 120 million Bangladeshi taka in the capital city. According to the police, JMB made these investments to strengthen the group’s financial base. For example, a garments factory, “Rahat International,” in Dhaka and a tiles factory in Narayanganj are reported to have been set up by a JMB leader. In 2016, Bangladeshi authorities had also identified at least five business entities involved in terrorism financing. Bangladeshi terrorist groups are also allegedly investing in the local transport industry, including in taxis that run under a multinational ride-hailing company. IS-centric terrorist groups are also known to have invested in the gold market where there is a significant presence of illicit actors involved in smuggling.

There are also a large number of legitimate businesses and nonprofits allegedly colluding with extremists, albeit indirectly. According to the Bangladesh Economic Association (BEA), the apex body of local economists, the “fundamentalist economy” yielded more than half a billion dollars in 2019. The sectors involved include banking, healthcare, education, real estate and others. According to the BEA, fundamentalists reportedly own at least 231 trusts and foundations in Bangladesh. These trusts and foundations provide a wide range of social services including education and healthcare, which observers believe should be audited due to their suspected links to terror financing.

Bangladesh faces two key challenges in countering terrorism financing activities in the country. First, there is a general lack of institutional capacity to adequately investigate and prosecute such cases. Here, a lack of manpower with appropriate technological and investigative skill sets are the main hindrance. Second, there is no agency with specific jurisdiction to monitor and respond to the economic ecosystem that benefits terrorists. For example, the country’s Financial Intelligence Unit (FIU) can only monitor the formal banking sector; other agencies such as the Counter-Terrorism and Transnational Crime Unit and Anti-Terrorism Unit are involved in incident-based investigations. As such, although Bangladesh has come a long way in suppressing terrorist activity in recent years, challenges remain in neutering the incubating financial environment that enable terrorist groups to conduct their activities.

Bangladesh needs to empower and enable the relevant agencies to proactively respond to terrorism financing in all forms. It is important to ensure that these agencies not only investigate specific incidents or cases but are also able to monitor, analyse and respond to the broader and evolving financial ecosystem on which terrorist groups depend for their survival and expansion. Many observers in Bangladesh believe that if this wider aspect of terrorism financing remains outside the jurisdiction of the counterterrorism agencies, Bangladesh’s ongoing efforts will go in vain and militant groups will continue to regenerate.