Special Article
RAASHID WALI JANJUA
WHY would you lose a leverage when that works to your entire satisfaction? The Financial Action Task Force is an instrument that works fine for those who want to extract maximum concessions out of an economically harried and geopolitically beleaguered Pakistan. The pressure being exerted is a part of a bigger geopolitical game being played on the global chessboard for political gains in a region that connects the emerging energy and economy hubs. Pivot to Asia’s metamorphosis into Rebalancing Asia-Pacific and its latest reincarnation as IndoPacific strategy is a poignant reminder of geopolitics trumping geo-economics in the putative Asian Century. When the honest intent gets lost in the fog of political expediency the motive of even the most altruistic of the actions becomes suspect. It is precisely for above reason that FATF’s counter-terrorist financing initiatives are being perceived as a geopolitical chicanery to promote political interests of the global powers. Ostensibly FATF promotes counter terrorism strategies to stamp out the vestiges of terrorism, choking the financial lifeline of terrorist organizations. It serves the Pakistan’s national interests by starving the terrorist organizations to death through anti-money laundering measures and countering financing of terrorism in an economy that thrives on informality. So what is wrong with the noble intent of an international Good Samaritan organization loaded to the gills by the white man’s burden of a responsibility to rid us of terror? The fear lies in the selective imposition of the morality wherein a country like Afghanistan which does not even qualify for the status of a proper functioning state is not put on FATF’s grey list. The worry for Pakistan compounds when one views the second plank of FATF other than counter terrorist financing. That second plank is denuclearization. The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the ministers of its member jurisdictions. The objectives of the FATF are to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. When the 39-member body adopts denuclearization as the dominant plank of its action matrix then Pakistan has a reason to be concerned. As per Para 3-b of the “Mandate of the Financial Action Task Force (2012-2020), ie “developing and refining the international standards for combating money laundering and the financing of terrorism and proliferation”, the nuclear proliferation could be the next frontier to be explored by the body. When that happens the difficulties for Pakistan can worsen. Since all decision making is through consensus in the plenary India can easily make things complicated for Pakistan. India has been the silent instigator of several FATF strictures imposed upon Pakistan. The mutual evaluation by all member states through consensus of a potential target state or the new member to be invited is also subject to the whims and caprices of any strong member state. India plays its negative part duly supported by USAin making things difficult for Pakistan. The mutual evaluation provision through which the existing member states scrutinize Pakistan’s current compliance on 40 recommendations of (Anti-Money Laundering / Combating Financing of Terrorism) is a ready peg to hang terrorist financing facilitation allegations. Till now Pakistan has addressed 14 of 27 action items of FATF’s Action Plan Statement dated October 2019. It urges Pakistan to swiftly complete the remaining action points till June 2020. Pakistan has demonstrated partial compliance to 28 recommendations of FATF but it is not a measure of comfort considering fact that FATF considers “largely compliant” and “complete compliant” as satisfactory conditions of compliance not the partial compliance. 41-member APG had adopted 3rd Mutual Evaluation Report (MER) on Pakistan duringAug 13-18 meetings in Canberra (Australia) downgrading country to “Enhanced Follow-up” category over technical deficiencies to meet normal international financial standards by Oct 2018 because of which Pakistan is now required to submit quarterly progress reports starting 1 Feb 2020 to show improvement in its technical standards on AML/CFT. The above portends a new sword of Damocles hanging above Pakistan. The NACTA officials dealing with the subject prognosticate problems for Pakistan due to FATF’s monitoring mechanism which is more political than technical. Pakistan for the first time in its history has gone to IMF under extremely hostile political environment due to Indian animus and USA’ tacit encouragement of Pakistan’s encirclement. Going by the geopolitical developments in South Asia where Pakistan has to deliver on Afghan peace and US sensitivities on CPEC, FATF is not going to loosen its stranglehold any time soon. As per Pakistani response planners the country could come out of the grey list in June 2020 and go back to the same or even the much dreaded black list by October 2020 due to mutual evaluation criteria tilted strongly against Pakistan. Pakistan needs to declare antiterrorist money laundering emergency in its own interests taking due cognizance of the strictures imposed by a very large segment of its informal economy (50%). Diplomatic thaw with India, positive engagement with USA especially while rendering helping hand in Afghan peace and tightening financial controls over potential conduits of terrorist financing should be the strands of a national strategy to evade being pushed over the precipice. — The writer, a Retired Brig, is a PhD scholar at NUST, Islamabad.
