Terror Under The Mask Of Charity: FATF Flags JeM, LeT For Routing Terror Funds Through Sham NGOs

Pakistan-based terrorist outfits Jaish-e-Mohammed (JeM) and Lashkar-e-Tayyiba (LeT), both reportedly affiliated with Al-Qaeda, have been using sham non-profit organisations (NPOs) to raise funds, recruit operatives, and facilitate logistics under the guise of humanitarian assistance, the Financial Action Task Force (FATF) has said in its latest report 

The global anti-money laundering watchdog, in its detailed risk assessment of terror financing, found that these designated terror groups have set up fraudulent NPOs in East Asia and other regions to collect donations under false pretences. These NPOs often claim to provide relief and charitable services, typically presenting themselves as disaster relief groups, religious charities, or educational institutions, while covertly funnelling donations into terror infrastructure.

“What may look like a free meal, a school for orphans, or a relief fund is, in many cases, a facade for terror financing,” FATF has cautioned. Alarmingly, investigations have revealed that even funds raised during public drives for natural calamities such as floods and earthquakes were diverted to bankroll militant training camps, mobilise operatives, and smuggle arms across borders.  

The FATF report highlighted that two UN-designated outfits, both aligned with Al-Qaeda, have methodically created a network of sham NPOs to mask their illicit operations. These groups either set up entirely fake charities or infiltrate credible ones, exploiting their legitimacy to launder money under the guise of humanitarian aid. Beneath this carefully constructed facade lies a sophisticated financial machinery that fuels radicalisation, facilitates logistical coordination, and enables the execution of cross-border terror plots with chilling precision.  

FATF noted that such NPOs may be based in conflict regions or even internationally, beyond the direct territorial control of terrorist organisations. 

The report highlighted a disturbing evolution of terror-linked NPOs strategically embracing modern digital tools to broaden their influence and fundraising reach. These entities now operate sophisticated online ecosystems, run targeted social media campaigns, exploit crowdfunding platforms, post emotionally charged appeals, and use encrypted messaging apps to engage donors. Alarmingly, many contributors remain oblivious to the fact that their generosity is being manipulated to fund extremist agendas and sustain global terror networks.

Once funds enter the system, they are swiftly rerouted through a complex network of legitimate financial institutions, informal remittance channels, and even registered front companies,all carefully designed to obscure the trail between the original source and the terror-linked beneficiaries. Fundraising begins on social media, encrypted messaging apps, online platforms, and crowdfunding sites, with the money moving seamlessly through formal banks, hawala systems, and virtual assets. Eventually, the laundered funds are converted into cash or logistical aid used to support terror operations.  

In several jurisdictions, the FATF has uncovered how donations are funneled through seemingly legitimate NPOs into front businesses, where the funds are further layered, disguised, and managed to avoid detection.The report notes that even officially registered and compliant-looking NPOs are being systematically misused to finance terrorism. Many of these entities, though legally sound on paper, operate in regions with weak regulatory oversight, particularly in parts of Pakistan, Afghanistan, and areas along India’s border enabling the smooth movement of illicit funds under the cover of charitable activity. 

Earlier this month, FATF condemned the April 22 terror attack in Jammu and Kashmir’s Pahalgam, which claimed the lives of 26 tourists. The strike, attributed to The Resistance Front (TRF), a proxy of LeT, has exposed the critical role of clandestine funding channels in enabling such acts of terror. Condemning the attack, FATF stated that “such an assault would not have been possible without the money and the mechanisms in place to transfer funds between terrorist supporters.” The FATF has stressed the urgent need to identify and dismantle these shadow financial networks that continue to fuel cross-border terrorism.

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The National Investigation Agency (NIA) is currently probing the funding trail, with the TRF’s financial and logistical networks under intense scrutiny. The Resistance Front (TRF), a Lashkar-e-Taiba proxy, has been officially designated as a foreign terrorist organization by the United States following its role in the April 2025 Pahalgam attack. The FATF and Indian agencies have linked TRF to cross-border terror funding and digital radicalisation networks. 

The FATF has also uncovered the use of modern financing methods by terrorist groups, including procurement of materials through e-commerce platforms, use of online payment gateways, and deployment of virtual assets, all aimed at deliberately obscuring transactions and evading detection.   

To counter these risks, FATF has urged urgent reforms under recommendation, which focuses on terror financing vulnerabilities in the non-profit sector. The watchdog has called for enhanced due diligence and routine audits of high-risk NPOs, real-time monitoring of NGO-linked bank accounts, swift enforcement of UN-mandated sanctions and asset freezes, and stronger international cooperation in financial investigations. The report concludes with a stark warning that unchecked misuse of charitable structures not only poses a grave threat to global security but also erodes public trust in genuine humanitarian efforts.