EPOMs, PayPal, and VPNs: Pulwama, Gorakhnath cases cited as FATF warns of online terror financing; says 'e-commerce and online payment platforms' misused
NEW DELHI: Referring to the 2019
Pulwama attack
, which resulted in 40 CRPF casualties, and the 2022 Gorakhnath Temple, the FATF on Tuesday said e-commerce and online payment platforms are being utilised for terrorist funding.
The FATF's 'Comprehensive Update on Terrorist Financing Risks', a Global terror financing watchdog, highlighted state-sponsored terrorism, noting that various public sources and delegation inputs indicate ongoing financial and other support from several national governments to specific terrorist organisations.
The FATF noted that delegations reported state sponsorship of terror financing as both a fundraising method and financial management strategy for certain terrorist organisations.
Support manifested in various forms, including direct financial assistance, logistical aid, material resources, and training provisions, PTI reported.
Following the April 2025 Pahalgam terror attack that claimed 26 lives, the FATF announced in June its intention to produce a detailed analysis of terrorist financing, incorporating cases from its global network of 200 jurisdictions.
In an Indian case study, the FATF detailed how aluminum powder, a crucial component for an improvised explosive device, was acquired through EPOM Amazon to amplify the explosion's impact.
"In February 2019, a suicide bombing targeted a convoy of Indian Security forces in Pulwama in Jammu & Kashmir, resulting in the deaths of 40 soldiers. India's authorities concluded that the attack was orchestrated by Jaish-I-Mohammed (JiM)."
The investigation led to charges against 19 individuals under the Unlawful Activities (Prevention) Act, including terror financing provisions. Seven foreign nationals, including the suicide bomber, were among those charged.
Law enforcement recovered related assets, including vehicles and terrorist hideouts.
Indian officials have consistently highlighted Pakistan's ongoing support for terrorism and its diversion of multilateral funds for weapons procurement. Sources indicate India believes Pakistan's actions warrant its placement on the FATF's "grey list".
The report identified terrorists' misuse of e-commerce platforms and online marketplaces for operational procurement of equipment, weapons, chemicals, and 3D-printing materials.
These platforms enable terrorists to generate funds by selling items, including previously low-demand products.
The FATF explained that EPOMs facilitate fund transfers through trade-based money laundering schemes. This involves purchasing items and sending them to accomplices via EPOMs for resale in different jurisdictions, using profits for terrorist financing.
The report outlined methods for raising, moving, and managing terrorist funds, noting that online payment services offer greater anonymity than wire transfers, making it difficult to identify transaction participants.
The report cited the April 3, 2022, Gorakhnath Temple incident where an ISIL-influenced individual attacked security personnel. The suspect transferred Rs 669,841 via PayPal internationally using VPNs and received Rs 10,323.35 from abroad.
Financial investigations revealed the accused's VPN service payments and approximately 44 international third-party PayPal transactions totalling Rs 669,841 to foreign accounts.
The suspect also received foreign funds through PayPal.
The probe uncovered payments to multiple ISIL followers abroad supporting terrorist activities.
"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," stated the FATF, citing India's finance ministry.
The report noted the significant growth in Fintech payment services over the past decade, with terrorists increasingly utilising these services for their low cost, speed, and ability to obscure participants through pseudonyms or fake accounts.
Europol's assessment indicates widespread use across terrorist organisations. Small cells, FTFs, and individual terrorists use P2P payment services for procuring military equipment, chemicals, and propaganda materials.
The report noted EoRMT groups' use of peer-to-peer payments for selling merchandise promoting extremist ideologies, forming a key revenue source.
Online payment services facilitate donations to larger organisations, particularly when integrated with social networks and content hosting services, enabling recruitment, crowdfunding, and fund transfers through a single platform.
The report concluded that online payment services provide less transparency than wire transfers, complicating the identification of transaction participants.
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