WASHINGTON, March 3: Terrorist organisations sometimes use some madressahs in Pakistan for money laundering and financing their activities, says a US government report.

The State Department’s International Narcotics Control Report for 2007 blames lack of government control over madressahs and religious charities for this anomaly.

“The lack of control of madressahs, similar to the lack of control of Islamic charities, allows terrorist organizations to receive financial support under the guise of support of Islamic education,” says the report.

“Another issue is the use of madressahs as training grounds for terrorists.”

The State Department notes that money laundering and terrorist financing are often accomplished in Pakistan via the alternative remittance system called hundi or hawala.

This system is also widely used by Pakistanis for informal banking and legitimate remittance purposes.

The United States, however, does not consider Pakistan a regional or offshore financial centre for drug 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 notes.

The US government believes that Pakistani criminal networks play a central role in the trans-shipment of narcotics and smuggled goods from Afghanistan to international markets.

According to this report, Pakistan has very little control of the border area, which allows the flow of smuggled goods to the Federally Administered Tribal Areas and Balochistan.