FATF implications for Pakistan


Reema Shaukat
FINANCIAL Action Task Force (FATF) is a new debate nowadays but very few know the details of this international body and its effects for Pakistan. FATF was formed in1989 during the G-7 Summit to deal with the growing issue of money laundering. The task force at that time was charged with studying money laundering trends, monitoring legislative, financial and law enforcement activities taken at the national and international level, reporting on compliance, and issuing recommendations and standards to combat money laundering. After, 9/11 this watchdog extended its work parameters to terror financing and related funding of terrorist organizations. The FATF also works in close co-operation with a number of international and regional bodies involved in combating money laundering and terrorism financing. This watchdog is holding its annual meeting in Paris from February 18 to February 23, 2018. There is much hue and cry about Pakistan to be put on the grey list by this organization again. Pakistan already remained on the watch-list for a period of three years from year 2012-2015. Now there is again a move by USA to place Pakistan in the same category. The ulterior motives by elite powers to subjugate Pakistan are quite visible in the past few months. The reason for this move as US claims is that Pakistan must take action against all terrorist/militant groups and should not be selective. US this time approached UK, Germany and France prior to conference in order to have more votes against Pakistan.
For the past few months, the relations between USA and Pakistan seem going nose-dive however Pakistan stands firms on its stance. There is a constant pressure by USA to ‘Do more’ for which Pakistan is saying ‘No more’, as enough has been done by Pakistan in curbing militancy. It is admitted fact that USA is pressurizing Pakistan for its policy failures in Afghanistan and without any authentication, Pakistan is blamed for any terrorist act in Afghanistan and providing safe havens to militants. Pakistan continuously demands that if US thinks, there are such sanctuaries in Pakistan then US must identify those, so that action should be taken. However, US believes in its carrot & stick policy, and asserts for stopping financial aid for Pakistan. Now this FATF meeting appears another objective by US to coerce Pakistan. And Pakistan on its best is trying to defeat a move initiated by US to put Pakistan on a global terror-financing watch list with an anti-money-laundering monitoring group. Pakistan has been mounting in recent months to forfend being added to a list of countries considered non-compliant with terrorist financing regulations by FATF – a measure that may hurt its economy. The issue was also taken up with US Assistant Secretary of State Alice Wells during her recent visit to Pakistan who also assured Pakistan that such campaigns against Pakistan are not acceptable.
The FATF announced that the Feb 18-23 meetings would discuss important issues to protect the integrity of the global financial system and contribute to security. Over 700 delegates from the FATF global network, as well as the United Nations, International Monetary Fund, World Bank and other partners, will attend the meetings. In November 2017, the International Cooperation Review Group in Argentina adopted a resolution, calling attention to Pakistan’s support to the Lashkar-i-Taiba, Jaish-e-Mohammad and affiliated groups like Jamaat-ud-Dawa. The meeting also demanded a full report on Pakistan’s efforts to curb terrorist financing before the FATF meetings. If the resolution is adopted the resolution would place Pakistan on the FATF grey-list of “jurisdictions with deficient anti-money laundering regimes”. Unfortunately, this time US has partnered with other countries against Pakistan while Pakistan believes that during voting its allies like China, Russia, Turkey and some of sincere allies will not let its category down. India surely as an aggressor is trying to lobby against Pakistan. Though the legal authority of FATF and its existence is still questioned by masses but when such organizations get backing of major toothless organizations like UNSC then no one challenges their legality at international forums. Generally speaking, there is very less awareness among masses that how FATF decision will disturb Pakistan. In the long run, if the observations against Pakistan continue it will directly affect its image globally and setback to its efforts for war and fight against terrorism.
One of the major implications if Pakistan is placed in grey list by FATF, could imperil its trickle of remaining banking links to the outside world, causing real financial pain to the economy just as a general election are nearby. However, some of the banks in banking sector believe that such regulations by FATF will not affect their investments. There are concerns that Pakistan’s economy which is around $300 billion and is growing hugely with a 5 percent and expected to reach 6 percent before fiscal year 2018 will slowdown. If the regulations are imposed by FATF then Pak economy might witness some less trade, foreign transactions and investments by European countries but on the other hand, when economic surge is expected through CPEC, Pakistan must make efforts to draw more foreign investments. Regarding anti-terrorism efforts, recently President of Pakistan approved Anti-Terrorism Act 1997 with regards, to proscription of terrorist organizations and individuals and amended the list according to the entities listed by UNSC. This step by Pakistan before the meeting of FATF is significant in its efforts of eradicating terrorism completely from its soil. With the prevailing efforts of peace restoration and forthcoming economic boom in country, let’s hope that FATF is not able to have its regulations on Pakistan.
— The writer works for Pakistan Institute for Conflict and Security Studies, a think-tank based in Islamabad.

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