Pakistan and FATF grey list

Pakistan and FATF grey list

We no longer can live in a cocoon and maintain isolation

The decision to place Pakistan on the FATF grey list was a foregone conclusion.

This will have an immediate effect on Pakistan’s financial institutions reflecting upon ‘deficiencies’ leading to check money laundering and failure to prevent terror financing, making funding by international financial institutions tougher on Pakistan.

Acting Secretary of State Alice Wells stated as per Reuters report that the desire to place Pakistan on the list was only partly due to its failure to take stringent actions against the head of JuD Hafiz Saeed, which Washington feels is a cover up in garb of charity for Lashkar-e-Taiba, a military group. Also as per Reuters, the international community continues to have concerns about deficiencies in Pakistan’s anti-money laundering and counter-terrorism financing system.

Though Pakistan did proscribe core groups by seizing their assets, it does not meet the high bar set by FATF.

Unfortunately, the decision of FATF to put Pakistan on the grey list has come at a time when Pakistan is being governed by an interim set up. The current dispensation does not have the mandate to make long term commitment or implement them. Saudi Arabia and China have both failed to support Pakistan at the meetings of the Financial Action Task Force held in Paris. This should be an eye opener for those in the power corridors. In international relations there are no ‘friends’ only alliances based on national interests. Pakistan needs to rethink its policy of going soft on internationally designated terrorist outfits. This approach is causing serious damage to Pakistan.

The timing of FATF to place an interim set up in being answerable to policies followed before does not speak well of the watchdog’s impartiality. The decision making of FATF is vague and not as transparent as they should be in terms of stating specific steps it requires Pakistan to undertake. The sacrifices of the common man as well as our law agencies both army and police in combating terrorism are undeniable. However according to a local newspaper, “the proscribed Ahle Sunnat Wal Jamaat (ASWJ) is likely to contest the upcoming general election on its own but in disguise by fielding candidates either as independent or as representatives of another registered party.” (March 12, 2018) Creating laws alone when designated terrorists are not physically nabbed will not deliver like the SECP anti-money laundering regulations. The Securities and Exchange Commission of Pakistan (SECP) had issued Anti Money Laundering and Countering Financing of Terrorism Regulations, 2018 upon FATF directions to deal with this issue.

According to FATF rules; if a minimum of three countries fail to give support to a proposal going through, the proposal stands defeated

Both the civil and military leadership of Pakistan must be on the same page in devising an all-inclusive policy to together deal with this issue. This must be one of the two top most priorities of the incoming government. The other one being dealing with the water crisis that will lead to water scarcity by 2025 if left unaddressed.

The bar set by FATF to scrutinise Pakistan’s subsequent efforts include identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for terrorist financing (TF). It also includes improvement in “the inter-agency coordination including between provincial and federal authorities on combating terrorist financing risks.” (Business Recorder June 30th 2018)

It is important that convictions are made and all inclusive efforts made against proscribed outfits. Allowing such outfits to operate damages Pakistan own internal structure besides bringing a bad name internationally.

We are living in a world where communication is a click away, news travels fast, nations are linked at different levels ie economically, security wise and at different other levels. A happening in one country has an impact at another part of the world. We no longer can live in a cocoon and maintain isolation. The geopolitical and geo economic world is a complex one. The fact that this movement to place Pakistan on the FATF grey list was sponsored by US, France, UK and Germany is a comment on the changing geopolitical world scenario.

According to FATF rules; if a minimum of three countries fail to give support to a proposal going through, the proposal stands defeated. US worked on Turkey and Saudi Arabia with India going after China who had blocked awarding of the terror designation to entities like JeM’s Maulana Masood Azhar in the United Nations. “Eventually, the Indian delegation, acting on instructions from New Delhi, struck a deal with the Chinese team that related to support for a greater FATF role for Beijing in the future.”(The Print Sunday, 1 July, 2018)

According to The Indian Express, “the Chinese turnaround came after the US offered it the vice-presidentship of FATF from July 1. The FATF Vice-President is also the FATF President-designate, which means that Beijing will head the terror financing and money laundering watchdog for one year starting July 2019. Sources said that the US also leaned on Saudi Arabia, which is hoping to become a full member of the FATF in June, to ask the GCC to drop its opposition to the proposal. The US and the three co-sponsors then moved the proposal, which was opposed only by Turkey.” This was pre-June meeting. However it is said the then foreign minister’s early celebration and tweet stating Pakistan had received a three month breathing space and “it was “grateful to friends who helped,” turned the mood against Pakistan leading to renewed and vigorous lobbying.

What needs to be counter balanced with Pakistan’s efforts to combat militancy is the need for the world to understand and appreciate the sacrifices made by Pakistan and the fact that a hundred per cent result in a complex situation cannot be achieved overnight.

Source: https://www.pakistantoday.com.pk

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