Terror financing: Facing challenges

Iqbal Khan

Knowing the ‘Ugly American’ mentality well, one could postulate that recent pressure via
Financial Action Task Force’s meeting was just the beginning of the new round of American nastiness. The FATF, is an intergovernmental body based in Paris that sets global standards for fighting illicit finance, it had previously warned Pakistan that it could, once again, be put on the watch list it if does not make further efforts to meaningfully crack down on money flow to militants. Earlier also Pakistan had remained on the global terror financing watch list from 2012 to 2015.
America’s motion in the FATF motion was focused on Hafiz Saeed, indicating that the United States had put forward the motion at India’s behest. “The US has consistently expressed our longstanding concern about ongoing deficiencies in Pakistan’s implementation of its anti-money laundering and counterterrorism finance regime,” said a spokesperson from the US Embassy in Islamabad. The United States was “absolutely not” acting on behalf of India in pressing Pakistan on the issue, the spokesperson said. A lot more is to come. Pakistan has a wide-ranging experience of such “Americonics”. Soon America dominated multilateral entities like the World Bank, IMF etc. would start applying economic pressures, and simultaneously dubious American entities would start screaming on Human Rights, religious persecution, minority rights etc.
Time has come for Pakistan to draw its redlines starting with specifying transit fee on every American truck and aeroplane that uses Pakistani territory and air space for connecting to Afghanistan, alongside an escalation factor chart corresponding to each American action. And let brother Modi arrange logistics for Trump’s war machine in Afghanistan via Chabahar port. Sending the Afghan refugees back is another necessity. Americans should be asked to create conditions for that; and also institute effective border management on their side of Pak-Afghan border. The US should also share the cost of border management that so far is being singly borne by Pakistan. Pakistan managed a last-minute exculpation at the Paris conference as participants did not reach consensus on American wish list of placing it on global list of countries that finance terrorism. However, nuisance would continue, it’s just a pause.
As of now, Asia Pacific Group has been asked to report on the matter in June—which is not far away. For now, Pakistan has been able to avoid a major international embarrassment. Foreign office has attributed the success to Pakistan’s frantic diplomatic efforts. China, Turkey, and Russia, opposed the motion which was jointly-moved by the US and the UK against Pakistan. And after failing to arrive at a consensus, the FATF dropped its plan to table the motion for voting in its plenary session starting. Presumably, Pakistan’s recent move to ban Jamaat-ud-Dawa and related charities run by Hafiz Saeed has played a crucial role in putting the things on the hold.
Had the US move succeeded this time, Pakistan’s economic woes would have multiplied. Not only the cost of doing business would have increased, but the foreign investment could have dried up as well, worsening the country’s macroeconomic position which is already under pressure due to a widening trade deficit and falling foreign exchange reserves. This does not mean that American move would continue to fall apart again and again. Pakistan has called the US move “politically motivated” with an aim to undermine the country’s economic growth. It is part of over all American strategy to contain China, and Pakistan is being pressured for joining the CPEC initiative. America thinks that the CPEC would undermine its Asia-Pacific rebalance effort whose sole objective is to keep China entangled in its local conflicts pertaining to South China Sea and East China Sea. America is encouraging the countries of Asia Pacific to be more assertive in their territorial claims against China.
While delisting Pakistan from terror financing watch list in February 2015, the FATF had noted that Pakistan had made significant progress in improving its anti-money laundering and counter-terrorism financing regime and also established the legal and regulatory framework to meet its commitments in its action plan regarding the previously indicated shortfalls. Pakistan has been working with the Asia Pacific Group to address the full range of issues identified in its mutual evaluation report, particularly, like full implementation of UNSC Resolution 1267. Pakistan has taken very meaningful steps to check such flow of money through a whole range of banking reforms to remain compliant with global anti-money laundering and counter-terrorism financing regimes. Pakistan had sent Adviser to Prime Minister on Finance Dr Miftah Ismail as head of a very potent team to plead its case to FATF members in Paris. He also visited Europe to convince FATF member countries about the actions that Pakistan had taken. The FATF held meetings spread over six days to discuss issues ‘to protect the integrity of the global financial system and contribute to safety and security’. The meetings involved more than 700 delegates from the 203 jurisdictions of the FATF Global Network, as well as the UN, IMF, World Bank and other partners.
Presently 11countries are on the high risk and monitoring list of the FATF, which include North Korea, Iran, Iraq, Syria, Yemen, Ethiopia, and Sri Lanka. US has shown concern over Pakistan’s ‘deficiencies in implementing anti-money laundering and counterterrorism laws’. Earlier US State Department Spokesperson Heather Nauert had expressed concern about ‘Pakistan’s deficiencies in the implementation of anti-money laundering and counterterrorism laws’. The spokesperson had told reporters that the US had been concerned for a long time about the actions of Pakistani authorities. “We have therefore decided that we want to place Pakistan on an international watch list. Further details about the matter are confidential, and cannot be revealed at the moment,” Nauert added.
Pakistan says it has been taking steps to curb terror financing, money laundering. It is time for the blame game to stop. The United States has been threatening to get tough with Islamabad over its alleged ties with militants, and last month President Donald Trump’s administration suspended aid worth about $2 Moves to put Islamabad on the FATF watch-list were counter-productive when Pakistan was already undergoing “mutual evaluation” by experts from other countries, who are measuring progress in curbing illicit fund flows. “It’s a very intrusive process and…we are happy to work with them, but while we are being given mutual evaluation, it makes no sense for us to be now put on the watch-list,” Ismail said. American are not going to stop. It is time for finance ministry to get hold of FATF’s evaluation checklist as well as action points of UNSCR1267, implement pending points and ask FATF for a comprehensive evaluation before June. Although Pakistan has done a lot in this field, yet it is not adequate. There is a need to document whole range of national economy, including flow of charity, for only then one would be able to trace the origin and destination of money, until then every Tom Dick and Harry would have space to point figures.
—The writer is a freelance columnist based in Islamabad.

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