Imperialist FATF’s divisive narrative | By Syed Qamar Afzal Rizvi


Imperialist FATF’s divisive narrative

IT has become now a veritable truth that the FATF body like the UNSC politicised forum is engaged in targeting the Muslim states.

Recently, India’s S Jaishankar admitted to influencing the anti-money laundering watchdog to keep Pakistan on the “grey list” which raised serious questions on the organistational-cum-institutional veracity of the FATF.

The October 22 decision of retaining Pakistan on its grey list while also scrolling a Muslim state Turkey in its grey list is highly reflective of the FATF’s narrative against the developing world, particularly the Muslim states.

A big game is being played where the Rothschild of the capitalist economy is trying to hit the economy of the developing world albeit on the apparent pretext of money laundering.

The FATF decision has come at a time when the US has left Afghanistan. Washington wants to use Pakistani airspace to monitor the Afghan situation.

It seems not impossible to change the goal post while asking a country to do more if the geopolitical dynamics so warrant.

Had Pakistan been successful in getting out of the grey list, it would have been substantially able to receive financial aids from international financial institutions on easy terms.

And most importantly, since June 2018, Pakistan’s placing on the grey list has cost the economic loss of approximately 38 billion US dollars.

Our ongoing dialogue with the IMF in Washington do have an unquestionable triggering effect on the future of our economy.

And yet, the FATF lawfare against Ankara is designed to undermine Turkey’s geopolitical leverage and Pakistan has decided to fight this out by taking a leaf from the international playbook and by using the language of the law.

While there is no doubt that the FATF has become an instrument of oppression with the twist of law, consequently, Ankara like Islamabad, has no choice but to play by the rules of the game.

Yet, of course, the strategic defence for Turkey seems nothing but a counter-lawfare accompanied by grit, resilience and astute planning.

On the pretext of the high risk jurisdictions, the FATF is taking actions against the Muslim states.

‘’High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing and financing of proliferation.

For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due to diligence, and, in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the money laundering, terrorist financing and proliferation financing (ML/TF/PF) risks emanating from the country. This list is often externally referred to as the “black list”.

Since February 2020, in light of the COVID-19 pandemic, the FATF has paused the review process for countries in the list of High-Risk Jurisdictions subject to a Call for Action, given that they are already subject to the FATF’s call for countermeasures.

What remains alarming is the fact that despite Indian involvement in the money laundering acts recently exposed by the EU info lab, FATF has so far taken no action.

Obviously, the narrative of high risk jurisdictions needs no further explanation since the developing world’s economy is on FATF’s hit list.

Needless to explain the material determinants of contemporary geopolitics are based on insights drawn from critical political economy.

Although the US continues to preside over a quasi-imperial system of power based on the global military preponderance and financial statecraft, thereby refusing to recognize the realities of global economic convergence wherein China is replacing the US global power matrix.

The age of imperial state hegemony is giving way to a new international economic order characterized by capitalist sovereignty and the competition between regional/transnational concentrations of power for geopolitical security.

From this angle, a rise in transnational strategic practice is much evident via powerful industrialized economies which mirrors predatory corporate rivalry for control over the global markets, thereby reproducing the transnational state form of capitalist economy — indicating the convergence between the EU and Israel.

Therefore, it appears that FATF’s review mechanism has some occult influence in manipulating its decision making.

The tumulus paradox of world order is that having created the institutional basis for multilateral trade and governance, the West is unwilling to sanction a minimum level of geopolitical rebalancing necessary to allow contenders a proportionate voice in international politics.

The very subversion of rationality by Western financial capital lies at the heart of recurring crises in the Western-led global economy which emerging economies blame on the ‘domestic needs of the country issuing the primary reserve currency [clashing] with international fiscal requirements’ (Hiro 2010: 287).

Undoubtedly, the FATF has a profound impact on the dynamics of the Benetton woods institutions (the World Bank and the IMF) vis-à-vis the developing world.

Albania, Syria, Iraq, Jordan, Pakistan, Turkey Zimbabwe, Morocco, South Sudan, Uganda, Yemen, and Senegal, Nicaragua, Malta, Jamaica, Haiti, Panama, Manutius, Cambodia, are the FATF listed countries under strategic deficiencies.

Notably, since June 2021, Pakistan has taken prompt steps towards improving its AML/CFT regime, including by enacting legislative amendments to enhance its international cooperation framework; demonstrating DNFBP monitoring for PF TFS and DNFBP supervision commensurate with the risks; and applying sanctions for non-compliance with beneficial ownership requirements.

In its current review, FATF expects that Pakistan should continue to work to address its other strategically important AML/CFT deficiencies, namely by: (1) providing evidence that it actively seeks to enhance the impact of sanctions beyond its jurisdiction by nominating additional individuals and entities for designation at the UN; and (2) demonstrating an increase in ML investigations and prosecutions and that proceeds of crime continue to be restrained and confiscated in line with Pakistan’s risk profile, including working with foreign counterparts to trace, freeze and confiscate assets.

Technically, any of the 39 member countries of the FATF can report another country needing to be watched more closely, and this can start proceedings for a greater watch — this is why we are stayed on the grey list thrice during the last one decade.

—The writer, an independent ‘IR’ researcher-cum-international law analyst based in Pakistan, is member of European Consortium for Political Research Standing Group on IR, Critical Peace & Conflict Studies, also a member of Washington Foreign Law Society and European Society of International Law.

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