WORLD> Asia-Pacific
US asks India to reinforce laws against terrorist financing
(Xinhua)
Updated: 2009-03-01 20:49

NEW DELHI -- The United States has asked India to reinforce laws for fighting terrorist financing through better controlling underground money remittances system in the country, according to local media reports on Sunday.

The United States government said in a recent report that the " Hawala" money remittances system in India is "directly linked to terrorist financing", according to the reports.

"Given the number of terrorist attacks in India and the fact that in India, Hawala is directly linked to terrorist financing", the Indo-Asian News Service quoted the US State Department report as saying. "(New Delhi) should prioritize cooperation with international initiatives that provide increased transparency in alternative remittance systems."

The local newspaper Pioneer quoted the report, entitled "2009 International Narcotics Control Strategy Report" and released Friday by the US government in Washington, as saying the Mumbai attacks last November "intensified concern about terrorist financing in India".

The report said there exists "a large underground economy" in India which widely uses the Hawala system, according to the Pioneer.

Originally a financial concept in the ancient Islamic law, Hawala developed into a fully-fledged money market instrument in South Asia by replacing formal banking system in the first half of the 20th century.

Hawala is presently used widely for migrant workers' remittances to South Asian countries.

In a separate report, local newspaper The Asian Age said on Sunday that Mumbai police has launched a probe to find out whether the funds used to sponsor the November attacks were channeled from a West Asian country.

The report quoted police officers as saying investigations have shown that an Indian-born Saudi, named Mahmoud Mohammed Bahaziq, is suspected to have financed the militant Lashkar-e-Taiba organization in staging the Mumbai attacks.