After pursuing a cross-border money laundering case for several years, Indian investigative agencies have zeroed in on the leadership of the Pakistan-based Hizbul Mujahideen (HM) and its front charity organization for allegedly funding terror activities in Jammu and Kashmir (J&K, Indian-administered Kashmir) and beyond. On March 11, the Enforcement Directorate of India registered a case under the Prevention of Money Laundering Act (PMLA) taking notice of a First Information Report (FIR – the first step in opening a criminal investigation in India) registered by the National Investigation Agency (NIA) late last year against ten people. Those cited included Muhammad Yusuf Saha (a.k.a. Syed Salahuddin), the supreme commander of HM and present chairman of the United Jihad Council (UJC), a Kashmir militant conglomerate based in Pakistan-administered Kashmir (PAK).
The NIA, India’s premier terror investigating agency, declared Salahuddin, his deputy Gulam Nabi Khan and eight others militants proclaimed offenders (i.e. fugitives sought in connection with a major crime of violence) and charged them with channeling huge sums of money into J&K for subversive activities. Among those charged, Dr. Dawood (a.k.a. Muhammad Shafi Shah) and Talib Hussain Lali (a.k.a. Wasim) are in NIA custody (Daily Excelsior [Jammu], December 1, 2013). The NIA has found that Dr. Dawood collected millions of rupees to finance militancy. An August 2013 media report on NIA investigations into the funding of Kashmir terrorist groups wrote that they had received approximately $100 million for terror operations through donations and relief funds during the past two years. The most active organization in this distribution was the Jammu and Kashmir Affectees Relief Trust (JKART) (Rediff.com, August 7, 2013). The NIA has been tracking the systematic funding activity of HM since October 2011 in a first of its kind investigation involving multiple channels, including cross-border trade, cash couriers/hawala (informal money transfers involving few if any records) and formal banking systems.
HM was founded in Pakistan in 1989 by Jamaat-e-Islami zealots, primarily to spearhead the so-called “liberation movement” in Indian Kashmir and to carry out jihad against the Indian political establishment. With active support from Inter Services Intelligence (ISI – Pakistan’s leading intelligence agency) and religious political parties like Jamaat-e-Islami, HM and its leader Syed Salahuddin became the face of Pakistan’s “proxy war” strategy against India. At the behest of the Pakistan government, other Kashmir-centric militant organizations such as Tehreek-e-Jihad Islami (TJI), Hizb al-Mujahideen-l-Jihad Commandos and the Allah Tigers merged with HM in 1991 to further armed militancy (Asia Times, March 11, 2005; The Hindu, January 16, 2009). Salahuddin’s HM and other anti-India elements in Pakistan, including Lashkar-e Taiba and Jaish-e-Muhammad, have formed the United Jihad Council (UJC) in Muzafarabad in Pakistan for a unified Kashmir struggle, taking responsibility for the distribution of resources like money, arms, ammunition and propaganda literature in support of the Kashmir jihad.
HM required intensive funding in its formative years. Much of that monetary support came from Pakistan’s ISI to carry out militant activities in India (Tribune [Chandigarh], November 29, 1999).  From bank heists to extortion, HM leaders have used every possible method to fund Kashmir militancy as well. Over the years, the organization has developed wider financial networks, both secretive and above-ground channels, to sustain the largest militant group in the Kashmir region. In mid-2009, J&K police unearthed a well-established hawala network. According to the NIA, the hardline Syed Ali Shah Geelani faction of the All Party Hurriyat Conference (APHC) was involved in running hawala networks to finance HM and other militant groups in the J&K.
HM and Salahuddin have invested heavily to mobilize popular opinion behind the Kashmir struggle and to find recruits through the provision of relief for the family members of slain militants. For this purpose, HM and its sympathizers have utilized shadow NGOs and educational and humanitarian charities like JKART and the Falah-e Alam Trust to fund militant activities in Kashmir. In 2011, the NIA named two Pakistani nationals affiliated with JKART, chairman Mahboob-ul-Haq and general secretary Masroor Dar, as prime organizers behind monetary transactions the HM operatives carried out in the J&K and Pakistan-administered Kashmir (Indian Express [Mumbai], December 8, 2011).
According to the NIA charge sheet, over $2 million had been channeled into the Kashmir Valley for JKART, an organization used by Hizbul Mujahideen to finance militant activities in J&K (Economic Times [New Delhi], December 1, 2013). Established in the early 1990s, JKART aims to provide health care, food and shelter to Kashmiri families displaced by the conflict. With headquarters in the garrison city of Rawalpindi in the Pakistani Punjab, JKART also has branches in the Pakistani capital of Islamabad and in Muzafarabad, the capital of PAK.
Although HM leader Syed Salahuddin is officially banned from PAK, he continues to operate within Pakistan proper with impunity, giving public sermons, media interviews and organizing fundraisers in Rawalpindi, Lahore and Muzafarabad. In many of his media appearances Salahuddin asserts that Pakistan has been extending moral, military and diplomatic support to HM for continuing the armed struggle against India (Rediff.com, August 28, 2001). He even once declared his full faith in the Pakistani civil–military leadership and expressed confidence that Islamabad would never hand him over to India. The most famous statement came in May 2012, when he threatened Islamabad, saying: “We are fighting Pakistan’s war in Kashmir and if it withdraws its support, the war would be fought inside Pakistan” (Arab News [Jeddah] May 31, 2013).
With the shadow charity groups active on the ground, HM used to receive foreign donations targeted at helping the marginalized people in Kashmir region. One such event came under scrutiny when the Canada Revenue Agency (CRA) revoked the charitable status of the Islamic Society of North America’s Canada’s Development Foundation when it was found to have distributed over $280,000 between January 2007 and December 2009 to the Kashmiri Canadian Council/Kashmiri Relief Fund of Canada to fund in turn the Pakistan-based Relief Organization for Kashmiri Muslims, the charitable arm of Jamaat-e-Islami Pakistan (Weekly Press Pakistan [Toronto], November 22, 2013). The CRA expressed concern “that the Organization’s resources may have been used to support the political efforts of Jamaat-e-Islami and/or its armed wing, Hizbul Mujahideen.” 
Indian authorities undoubtedly hope that the results of the latest NIA investigation into terrorist financing and charges of official Pakistani complicity will put fresh pressure on Islamabad to clamp down on the activities of Kashmir-centric Islamic front charities like JKART (Hizbul Mujahideen) or the Falah-e-Insaniat Foundation Pakistan (Lashkar-e-Taiba).
Animesh Roul is the Executive Director of Research at the New Delhi-based Society for the Study of Peace and Conflict (SSPC).
1. See K. Santhanam, Sudhir, Saxena and Manish, Jihadis in Jammu and Kashmir: A Portrait Gallery, Institute for Defence Studies and Analyses/Sage, 2003.
2. Canada Revenue Agency News Release, “The Canada Revenue Agency revokes the registration of the ISNA Development Foundation as a charity,” Ottawa, September 20, 2013, http://news.gc.ca/web/article-en.do?nid=773409.