Illicit Trading in Nepal: Fueling South Asian Terrorism

PRIO Paper

Miklian, Jason (2009) Illicit Trading in Nepal: Fueling South Asian Terrorism [South Asian Briefing Paper #3]. PRIO Paper. Oslo: PRIO.

A tight-knit network of informal traders is exploiting a vacuum of law enforcement in southern Nepal to generate significant operating capital for the Pakistani militant group Lashkar-e-Taiba (LeT). The traders employ the same money laundering techniques as others in Nepal did a decade before, as the legal loopholes, lack of infrastructure, and widespread corruption that created these opportunities were not addressed. Nepal and India continue to focus on individual criminals in their attempts to shut down the networks, rather than reforming the structural conditions allowing the networks to operate. As a result, the traders operate in an environment conducive for the creation of vast sums of informal wealth with few barriers to operation and at little risk.

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