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The global terror financing watchdog Financial Action Task Force (FATF) on Tuesday cited the 2019 Pulwama terror attack and the 2022 Gorakhnath Temple incident in India to flag the growing misuse of e-commerce platforms and online payment services for terrorist financing (TF).
In its Comprehensive Update on Terrorist Financing Risks, the FATF said that “certain terrorist organisations have been and continue to receive financial and other forms of support from several national governments” and warned of state sponsorship as a key concern. The report also drew attention to how terrorists are exploiting digital financial platforms and online marketplaces.
“Delegations reported on this trend by referring to the use of state sponsorship for TF either as fundraising technique or as part of the financial management strategy of the certain organisations engaging in terrorist acts,” the FATF noted. “Several forms of support have been reported, including direct financial support, logistical and material support, or the provision of training.”
Amazon, PayPal flagged in case studies
The FATF highlighted that in the February 2019 Pulwama suicide bombing, which killed 40 Central Reserve Police Force (CRPF) personnel in Jammu & Kashmir, a key component of the improvised explosive device — aluminium powder — was procured using the e-commerce platform Amazon (referred to as EPOM in the report).
“This material was used to enhance the impact of the blast,” the report said.
Following investigations, 19 people were charged under India’s Unlawful Activities (Prevention) Act, including seven foreign nationals. Authorities also recovered moveable and immoveable assets, including vehicles and terrorist hideouts.
In its June statement condemning the April 2025 Pahalgam terror attack, in which 26 people were killed, the FATF had said such attacks “would not have been possible without financial support” and announced plans for this comprehensive analysis.
Separately, the FATF cited a case study of the April 3, 2022 Gorakhnath Temple incident, in which an individual influenced by Islamic State in Iraq and the Levant (ISIL) ideology attacked security personnel. The individual was arrested immediately after the attempted breach.
Impact Shorts
View AllAccording to Indian authorities, the individual used online services to transfer Rs 669,841 (USD 7,685) via PayPal to foreign countries to support ISIL, including 44 international third-party transactions. He also received Rs 10,323.35 (USD 188) from abroad. VPNs were used to obscure his IP address.
“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 report stated.
Wider misuse of digital platforms
The FATF warned that e-commerce platforms (EPOMs) are being used not only to procure chemicals and components for attacks but also as a means of value transfer through trade-based money laundering.
“EPOMs can be used for fund-moving purpose 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,” the FATF said.
It also flagged that peer-to-peer (P2P) payment services and fintech platforms have become attractive to terrorists due to their fast, low-cost transfers and the ability to obscure identities via pseudonyms or fake accounts.
“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,” the FATF said.
According to the report, Europol assesses that such services are used across all types of terrorist organisations, including small cells and lone actors. These platforms are reportedly used for purchasing military equipment, chemicals, propaganda material, and for receiving crowdfunding donations via social networks.
The FATF also noted that Ethnically or Racially Motivated Terrorism (EoRMT) groups sell merchandise such as books, music, and clothing through P2P systems to raise funds.
It concluded that “online payment services offer less traceability and transparency compared to wire-transfer, making it harder to clearly identify initiators and recipients of transfers.”
With inputs from PTI