What are Kosher funds and how it can help terrorism during demonetisation

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A Kosher investment forms an integral part of any terror funding. Our previous article on how the recent currency demonetisation may have little effect on terror activities is related to this. Now, what are these Kosher funds?

These are basically Israeli funds that specifically cater to investors with a religious conscience. IN other words, Kosher funds are investment instruments with an economic and financial logic, which operate according to religious principles.


According to a leading journal in Israel's Business Arena-Globes, some such funds include Ave Maria Catholic Values Funds (AVEMX) and BNP Paribas's Islamic Equity Optimizer. AVEMX invests in value stocks and also invests according to Catholic Principles.

This means that it does not invests in companies that are involved in abortions or pornography. It also does not support companies that back the idea of one-parent families, or parenthood outside marriage.

BNP Paribas recently launched the Islamic Equity Optimizer, an exchange traded fund that tracks the Dow Jones Islamic Market Titans 100 Index, which is one of the eight Islamic indices of the company.

The company refuses to entertain companies that are unethical under the Sharia law, such as alcohol, pork production, financial services, entertainment (such as casinos), and pornography. However, there is a twist here. Tobacco, defence and arms industries are not banned entirely by the Sharia, but are excluded by the fund.

Israel too has mapped itself in the list of such Kosher funds. Recently, the Mercantile Discount Bank indicated that it will be launching kosher mutual funds. It also specified that these funds will operate in the interest of Jewish law (halacha), with Rabbi Arie Dvir, head of the Halacha Institute of Economics, acting as adjudicator.

This move was taken primarily to become a leader in the haredi, which is the ultra-orthodox sector.

A healthy bait for terror groups?

Given the way terror organizations function to attract funds, these kosher groups can be easily used. For instance, terrorism breeds deep in charitable organizations. Wikipedia has a list of such organizations that have been blacklisted by international agencies as ATMs terrorism.

To name some of them, the Afghan Support Committee, Al-Haramain Foundation, Al Kifah Refugee Center, Benevolence International Foundation, Holy Land Foundation for Relief and Development, Maktab al-Khidamat, Muslim Aid, and more.

[Read: Beware! Terrorism may be unaffected by demonetisation]

It is not difficult to join the dots here. Kosher funds, going by their definition, are likely to support any such organizations that may have hidden intentions related to terrorism.

Other options for funding

Even if we rule out the involvement of the Kosher fund in terror funding, we cannot rule out money coming from oil, extortion, kidnapping, contrabrand and politics.

Currencies here play a small role. Interestingly, several Iraqi, Kurdish and Syrian government officials explain how this works and how these avenues rule out the requirement of banks in the entire process of terrorism.

Contrabrand, oil and illegal weapons are easily transported across border as the security systems are weak here.

Moreover, a little money can make transit easier. ISIS also depends on steady incomes from private donors, heavy taxation that is levied on its captive population, the seizure of bank accounts and private assets in the lands it occupies, ransoms from kidnappings and the plundering of antiquities excavated from ancient palaces and archaeological sites.

[Read: Demonetisation will curb black money, terrorism: Ravi Shankar ]

Gulf donors are rich and willing to fund these agencies until the ISIS was declared "Enemy Number One" by the most senior Islamic cleric in Saudi Arabia. Looting ancient sites is another way of income for these groups. In fact, more than a third of Iraq's 12,000 important archaeological sites are now under ISIS control.

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