Syed Qamar Afzal Rizvi
THE Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. A meeting of the FATF member states started on February 18-23 in Paris, where it is speculated that the organization, the embodiment of 35 member states, sets global standards for fighting illicit finance –could adopt a motion jointly moved against Pakistan (by US, UK, France and Germany). But Islamabad is diplomatically engaged in foiling such a measure.
The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, Groupe d’action financière(GAFI), is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. In 2001 its mandate expanded to include terrorism financing. It monitors progress in implementing the FATF Recommendations through “peer reviews” (“mutual evaluations”) of member countries. News broke on last Tuesday that the US along with the UK, France and Germany had put forth a motion with the FATF to place Pakistan on the watchlist of countries considered non-compliant with global anti-terror financing measures. FATF six days meetings- with regard to global financial system’s safety and security- involved over 700 delegates from 203 jurisdictions of FATF Global Network, as well as UN, IMF, World Bank and other partners.
The week’s meetings seem to be concluded with the second Plenary meeting under the Argentinean Presidency of Santiago Otamendi, on 21-23 February. Among many other issues, the discussions during the Plenary seem to be focused on counter-terrorist financing: The new operational plan will provide a forward looking and comprehensive plan of action for FATF in tackling terrorist financing.
Proliferation financing: The moot will discuss FATF’s efforts to help prevent UN-sanctioned entities from using the financial system to support their programmes to develop weapons of mass destruction. The moot is to devise new guidance to help public and private sector understand and implement the obligations of the United Nations Security Council Resolutions so that proliferation-related assets are frozen. Iceland, Norway and Spain: The moot seems to be reviewing the mutual evaluation of Iceland and the effectiveness of the country’s efforts to tackle money laundering and terrorist financing. It will review the actions that Norway and Spain have taken to address the deficiencies identified in their 2014 assessments. The moot will accordingly discuss and update the statements identifying high-risk and other monitored jurisdictions.
FATF is also intended to discuss its engagement with the FinTech and RegTech sectors and future steps to support responsible innovation. FATF Heads of Financial Intelligence Units discussed the issue of FIU. Pakistan had been on FATF watchlist from 2012 to 2015. Last year, FATF’s International Cooperation Review Group resolved to scrutinise Pakistan’s apparent support of proscribed groups operating on its soil and requested a report on the country’s efforts to combat terror financing ahead of its next sessions.
Pakistan has repeatedly denied providing safe haven for terrorists and has pointed to the thousands of military and civilian casualties it has sustained fighting insurgent groups on its soil. A senior US official who follows U.S. policy in the region said Pakistan has “always been selective” in cracking down on militants who use its territory as a base. “It is time for that to stop, and so we are working with our allies. Who also are affected” said the official, referring to militants operating along the border with Afghanistan.
US State Department Spokesperson Heather Nauert has expressed concern about ‘’Pakistan’s deficiencies in the implementation of anti-money laundering and counterterrorism laws’’. Since November, 2017 India has been consistently raising the issue of Pakistan’s support to terrorists and terrorist groups at FATF meets. The Money Laundering Control Act of 1986 is a United States Act of Congress that made money laundering a federal crime. It consists of two sections, 18 U.S.C. § 1956 and 18 U.S.C. § 1957. The ICRG noted: “Pakistan made some progress to implement UNSCR 1267. However, residual concerns related to UNSCR 1267 remain, specifically that designated individuals and entities of concern continue to receive and disperse funds without controls being applied by the competent authorities.” Pakistan put bar on all operations of the Jamaatud Dawa (JuD) and the Falah-e-Insaniat (FIF) across the country.
“Today I can say with pride and conviction that there are no organised camps on our side of the border. However, presence of terrorists of various hues and colours cannot be ruled out. “We still have their active and sleeper cells and they are hiding in mountains, border towns and 54 refugee camps, besides some major town and cities,” said General Qamar on Saturday while speaking at the Munich Security Conference (MSC) in Germany.
In order to counter the FATF’s proposed legislation, Islamabad has tried to get diplomatic support from Germany, Netherlands, Belgium, Russia , Turkey and Saudi Arabia. The Time-test China has been the only country who stands against the US proposed resolution against Pakistan. Pakistan is a member of Asia Pacific group on anti-money laundering (APG). There are three stages involved in money laundering; placement, layering and integration. How far this anti-Pakistani proposed resolution does fulfil this criteria, remains a valid question? Though Pakistan’s domestic laws need more prompt legislation to curb money laundering, the global community must not ignore the growing sensitivities that Islamabad has expressed regarding CIA-NDS-RAW’s anti-Pakistan terrorist gamut to destabilise Pakistan.
— The writer, an independent ‘IR’ researcher-cum-analyst based in Karachi, is a member of European Consortium for Political Research Standing Group on IR, Critical Peace & Conflict Studies.
Syed Qamar Afzal Rizvi