"Looking into the inter-state and international nature of terrorism, the need was felt to create the NIA and it is important to have a federal law, which is quite possible. I have recommended it in the Administrative Reforms Commission report," he said inaugurating a conference on 'The Constitution and Anti-Terror Laws' in New Delhi.
"This is an undeclared war, lets not forget about it. We have to address terrorism without any hesitation," he said at the event jointly organised by Rashtriya Jagriti Sansthan, South Asia Politics and Konrad Adenauer Stiftung, a German organisation.
Referring to the Constitutional protection vis-a-vis anti-terror laws, the minister, referring to the landmark D K Basu versus Bengal case, said encounter was not an answer, though some thought it was due to the delays in criminal justice system.
"Unless the criminal justice system in completely overhauled, which we would like to do in the future, it is necessary not only to build capacity of law enforcers, but also the judiciary," he said.
Noting that terrorist acts were aimed at destabilising nations and its citizens, Moily said, "It is an attack on our institutions of democracy, symbols of national pride, security and strategic infrastructure and on civilians."
"Time has come to meet the challenge head-on and not just walk up to problem, he said adding terrorism is a reminder for the global community to stop the rhetoric and perform to effectively fight the menace."
Moily said terrorism posed a new challenge for law enforcers and law makers alike and new approaches, techniques, weapons, expertise and laws were required to fight it.
"The law makers and enforcers need to change their mindset and will have to attune themselves to these new challenges posed by terror," he said.
The Law Minister said the situation created by external forces at the frontiers of the country challenged the sovereignty and democratic polity and the UN Security Council resolutions had called upon member-states to prevent and suppress terrorist acts and their funding.
"Financing is an important element and if you are in a position to cut down the terrorists' resources, 50 per cent of the problem can be solved," he said.
Moily said terrorism could not be classified as a mere disturbance of public order. "It is not as simple as that," Moily added.