Terror groups use madrassas in Pak for money laundering: report

ISLAMABAD: Terrorist organisations sometimes use some madrassas in Pakistan for money-laundering and financing their activities, a report has claimed.

"The lack of control of madrassas, similar to the lack of control of Islamic charities, allows terrorist organizations to receive financial support under the guise of support of Islamic education," the Dawn newspaper reported, quoting a report of the United States State Department.

"Another issue is the use of madrassas as training grounds for terrorists," the paper quoted the International Narcotics Control Report for 2007.

Money-laundering and terrorist financing are often accomplished in Pakistan via the alternative remittance system called 'hundi' or 'hawala', it claimed.

The US, however, does not consider Pakistan a regional or offshore financial centre for laundering but points out that financial crimes related to narcotics trafficking, terrorism, smuggling, tax evasion and corruption are significant problems.

"As a result of tighter controls in the financial sector, smuggling, trade-based money laundering, hawala, and physical cross-border cash transfers are the common methods used to launder money and finance terrorism in Pakistan," the report claimed.