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Pakistan’s counterfeiting jihad against India

March 11, 2011

It’s not just a figment of the collective imaginations of India’s newspapers and Internet forums.  The U.S. State Department has released a report implicating Pakistan in the organized counterfeiting warfare operation against India and its economy.  The counterfeiting racket also helps fund terrorism.  From the Economic Times on Mar. 4:

WASHINGTON: India faces an increasing inflow of counterfeit currency, produced primarily in Pakistan, and terrorist and criminal networks use this money to finance their activities in the country, an official US report has said.

“India faces an increasing inflow of high-quality counterfeit currency, which is produced primarily in Pakistan but smuggled to India through multiple international routes,” said the 2011 International Narcotics Control Strategy Report of the State Department.

“Criminal networks exchange counterfeit currency for genuine notes, which not only facilitates money laundering, but also represents a threat to the Indian economy,” it said.

Tax avoidance and the proceeds of economic crimes (including fraud, cyber crime and identity theft) are still the mainstay of money launderers in India, but laundered funds are also derived from human and narcotics trafficking, transnational organised crime, illegal trade, particularly in endangered wildlife and illegal gems (principally diamonds), and corruption, the report said.

Noting that India is a significant target for terrorist groups, both external and domestic, the report said most terrorist activities are conducted by international terrorist groups and entities linked to the global jihad, with the support of both state and non-state external actors.

In addition, several domestic separatist and insurgent groups are active.

Terrorist groups often use counterfeit currency and hawaladars, as well as physical cross-border currency smuggling, to move funds from external sources to finance their activities in India, it said…

The rest of the article describes the State Department’s recommendations for the Indian government which you can read here.

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