It is the volume of funds from overseas that sustains Tiger activities. These external funds, constituting about four-fifths of the total revenue of the LTTE, come from three main sources: diaspora contributions, profits from commercial ventures, and proceeds from drug-trafficking.

'Refugee Funds'

Contributions from the Sri Lankan Tamil diaspora spread across Canada, United States, UK, France, Switzerland, Australia, Sweden, Finland, Norway and India constitute the major sources. It is estimated that the LTTE raises about $2 mn from the diaspora monthly; a quarter of it comes from Canadian Tamil expatriates. Two groups of diaspora are relied upon by the LTTE for funds:

1. the more established expatriates who believe in the Eelam and the Tigers' mode of fighting; and
2. those illegal Tamil migrants who rely on the LTTE to facilitate their integration into the host society through forged identity papers, jobs and housing.

While the contribution from the above two categories come voluntarily, extortion is the common mode to extract money from the others.

The contribution is fixed according to the income of the family, which varies from $40 to $80 a month, to begin with. Funds are collected in a sophisticated manner by major front organisations like World Tamil Movement, Federation of Associations of Canadian Tamils, World Tamil Association, United Tamils Organisation, Tamil Eelam Economic Development Organisation etc. Tamil media abroad is extensively used for this purpose. The LTTE International Secretariat based in London is responsible for the overall global coordination of collection and transfer of funds. Money is usually routed through donations given to pro-LTTE Tamil cultural, human rights, or humanitarian agencies. This routing is followed to evade legal and political counter-measures being taken by the international community. The main problem in checking financial flows to terrorist organisations by individual governments is the difficulty in proving that the funds collected are being used for terrorist activities.

Tiger Inc.

The LTTE has commercial ventures in Kuala Lampur, Singapore, Yangon, Dhaka, and Chittagong, apart from Western countries. These ventures range from running ocean liners to maintaining restaurants. The LTTE, which was using chartered ships for transporting its arms and other goods, acquired its own fleet during 1985-86. It is believed to have around ten freighters, generally registered under Panamanian, Honduran or Liberian flags (famously called as "Pan-Ho-Lib"). While arms are shipped to the LTTE base in northern Sri Lanka, goods are transported for commercial purposes. Thus, the LTTE uses its fleet for dual purposes. The fleet is also used for human/refugee smuggling to Western countries for a charge. 'KP' (Kumaran Pathmanathan) Department is in charge of international freight and investments abroad. Businesses are usually run through proxies. While the LTTE makes an initial investment, the business ventures are run by trusted people and profits are split on an agreed basis.

Money also flows in from counterfeiting passports and visas, money laundering, arms trafficking and other organized criminal activities. This does not mean that the LTTE is directly involved in these activities, but it has linkages with the Tamil gangs involved that contribute a share to the Tigers.

Narcotics

The LTTE's reliance on drug-trafficking for its 'National Defence Fund' is very evident. Because of its vast international clandestine network the militant group is adept in smuggling drugs, raw or processed, from the 'Golden Triangle' and the 'Golden Crescent' to any destination of the world. The main drugs involved are 'mandrax' (methaqualone) and heroin. There is a strong nexus between the LTTE and narcotics cartels and other militant groups involved in narco-terrorism. Migrants and asylum seekers are also used to smuggle drugs, apart from using the LTTE's sophisticated transport network. It is estimated that the annual smuggling of drug cartels linked to the LTTE is about 1000 kg (worth of $250 mn in the international market).

Closing the Tap

Due to the diplomatic initiatives of the Sri Lankan government the LTTE has now been listed as a terrorist organisation in many important countries like India, United States, Britain, Australia, Canada and South Africa. Contributions to the LTTE are therefore a criminal offence and fund raising is prohibited. This apart, the UN Security Council, through its resolutions 1269 (19 October 1999), 1368 (12 September 2001) and 1373 (28 September 2001), has called upon all States to cooperate with each other in not providing support to terrorist groups, including their financing. Of late Sinhalese expatriates are also involved in successfully lobbying with their respective host countries to impose stringent government restrictions against the LTTE's financial networks. All these measures have affected external financial flows to the Tigers, but only to some extent. The LTTE's continued economic prosperity indicates that these counter-measures are not adequate.