FATF: Where does Pakistan stand?

The Pakistani delegation in Paris received messages that India had asked other member states to put Pakistan on the blacklist.

Pakistan made a high-level political promise earlier in 2018 to work closely with the Financial Action Task Force (FATF) and APG to improve its Anti-Money Laundering/Combating Financing Terrorism (AML/CFT) policies and to cater to its strategic counter terrorist financing-related weaknesses. Steps were taken in order to operationalize the combined database for its currencies enunciation regime, as acknowledged by the FATF at a meeting earlier this February. The statement however concluded that Pakistan needed to meet the expectations of the action plan by May 2019 in order to be de-listed from the FATF’s ‘grey list’. Pakistani officials were surprised as they had been under the impression that the FATF had been appreciative of the steps that had been taken place in January as per requirement by the FATF and AML/CFT. Pakistan needs to address its geopolitical ‘deficiencies’ to be able to qualify for a de-listing.

Some of these ‘deficiencies’ include the understanding of the threat posed by terrorist groups like the Jaish-e-Muhammad and Falah-i-Insaniyat and that ‘authorities are identifying cash couriers and enforcing controls on illicit movement of currency.’ Further demotion from the ‘grey-list’ could hinder Pakistan’s foreign investment and deter the access to international markets as Pakistan is already deeply infested in a financial crisis. India pressed Pakistan to make public the measures taken against terrorist organizations to which Pakistan replied saying that it was up to them whether or not to publicize actions taken against these groups and that it would not kneel down to pressure from India. A country being labeled a ‘state sponsor of terrorism’ should not be an instrument used in order to halt terrorist activity; it is a very burdensome label to put upon a state struggling to save its own citizens from the threat terrorist organizations have posed for decades.

In Stephen Tankel’s words, it is a ‘really, really heavy hammer’. The sanctions that come along with this, make it nearly impossible for any other chance of engagement on other issues.

“Let’s declare Pakistan a state sponsor of terrorism today. But what next, if there’s no change?” Daud Khattak, Senior Editor Radio Mashaal stated.

The world has often been under the wrong impression about Pakistan, claiming that it is a land of Muslims celebrating Jihad. However, an ordinary Pakistani, condones this concept rather than celebrate it. According to a recent Pew global opinion poll, 89% of Pakistanis said that violence against civilians for the sake of religion was never justified.

Placing Pakistan on the watch list was a joint effort by the United States and Britain who also persuaded Germany and France to co-sponsor this measure.

This is a measure, which will not only halt foreign investment but will affect the country in the worst possible way – Pakistan’s capability to fight terrorism will be hurt and the interests of adversarial states served. Federal Minister for Finance Asad Umar expressed a concern over India abusing the apparent non-biased and transparent nature of the FATF, which legitimized Pakistan’s demand to remove India from the position of co-chair of FATF’s Asia Pacific Group (APG) review. It is said that India is using the FATF for political purposes as a forum to lobby against Pakistan. The Pakistani delegation in Paris received messages that India had asked other member states to put Pakistan on the blacklist. If Pakistan were blacklisted by the FATF, it would be termed as ‘non-cooperative’ in the fight against money laundering and terrorist financing which will result in the downgrading of the country by multilateral lenders like the IMF and World Bank.

It is impossible for Pakistan to perform as efficient as the G8 level countries within a span of a few years. To bring forth changes in the legislative, to build capacities of prosecution judges and officials and strengthening institutions for example the National Accountancy Bureau, the State Bank, Federal Investigation Agency amongst many others is a resource intensive, expensive and a time consuming task.

Pakistan, having a leading edge in the fight against terrorism, would gain from a collaborative approach rather putting international pressure for its placement on the watch list. The country should get international support from institutions such as the FATF, IMF and the UN to help strengthen its domestic policies. There are many other ‘avenues’ as stated by Madiha Afzal, the author of Pakistan under Siege; Extremism, Society, and the State, which are less implacable to shake Pakistan in order to take action against the spread of terrorist activity.

“Pakistan will listen”, she added as she urged the White House to collaborate with China over the issue of Islamabad’s role in Afghanistan.

Khadija Laghari is a researcher at PIIA. 











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Filed under Discussion, India, Pakistan, Pakistan Horizon, Politics, UK, United States

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