Pakistan’s FATF Test sans Godfather Chairman
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Issue Net Edition | Date : 30 Aug , 2020

At the third and final plenary of the Financial Action Task Force (FATF) held virtually on June 24, 2020, the decision was to keep Pakistan in the “Grey List” as it had failed to check flow of money to terror groups like the Lashkar-e-Taiba (LeT) and the Jaish-e-Mohammad (JeM). It is pertinent to note that Pakistan was placed on the ‘Grey List’ by the FATF in June 2018 and continues to be in that list since then as it has failed to comply with the tasks given by the FATF to stop terror financing.

Pakistan should have actually been placed on the ‘Black List’ but the FATF plenary was under the Presidency of China’s Xiangmin Liu. After the FATF decision, calls were raised that if Pakistan continues on the ‘Grey List’, it will be difficult for the country to get financial aid from the IMF, World Bank, ADB and the European Union, thus further enhancing problems for the nation which is in precarious financial situation.

India has been maintaining that Pakistan extends regular support to terror groups like LeT, JeM and Hizbul Mujahideen whose prime target is India and has been urging FATF to take action against Pakistan. The above FATF decision came a day after the US Country Report on Terrorism slammed Pakistan as a safe harbour for “regionally focused terrorist groups” and allowing LeT and JeM to operate from its soil.

The US State Department report said Pakistan allowed groups targeting Afghanistan, including the Afghan Taliban and affiliated Haqqani Network, as well as groups targeting India, including LeT and its affiliated front organizations, and Jaish-e-Mohammed (JeM), to operate from its territory.” Pakistan rejected the US report calling it “disappointing”.

News reports of April 22, 2020 revealed findings of New York-based Castellum that in last 18 months Pakistan had quietly deleted nearly 3,800 names from the Proscribed Persons List without explanation or notification to the public. Castellum automates compliance of nations placed on watch lists for their terror-related activities. The Pakistani list in 2018 contained about 7,600 names which has been reduced to 3,800.

Notably, no public explanation was given for the removal of the names. International standards call for nations to declare “de-listings” to the financial sector immediately after taking such action. But Pakistan, which designates entities and persons with suspected links to terrorism under its Anti-Terrorism Act of 1997, has deliberately not been doing so. According to Castellum, “Removing nearly 4,000 names without a public explanation is very unusual and it raises important questions about the listing process.”

The smart act by Pakistan is that many names removed from the terror list appear to be nicknames of designated terrorists listed on US or United Nations sanctions lists and lack of identifiers like the dates of birth makes it impossible to discern identities. About 1,800 names removed from the terror list since beginning of March 2020 includes Zaki-ur-Rehman Lakhvi – mastermind and LeT operations commander during 2008 Mumbai terror attacks.

The proscribed persons list is maintained by Pakistan’s National Counter Terrorism Authority (NACTA) which is supposed to help financial institutions avoid doing business with or processing transactions of suspected terrorists. The obvious intention is to dupe FATF and convey to financial institutions at home and abroad that they can deal with a confounded terrorist like Zaki-ur-Rehman Lakhvi because he is no more on the proscribed list. Besides, Pakistan has no intention of probing the 2008 Mumbai terrorist attack. Lakhvi is just one example of Pakistan’s subterfuge.

Apparently Pakistan has now realized it has overplayed deception and that the next FATF plenary would be under Presidency of Marcus Pleyer (Germany), not Godfather Xiangmin Liu of China as in June 2020. Germany assuming FATF’s Presidency on July 1, 2020 probably jolted Pakistan’s comfort zone. So Pakistan issued a fresh notification on August 18, 2020 proscribing 88 terrorist leaders and members of terrorist groups including 1993 Mumbai blasts mastermind Dawood Ibrahim, LeT commander and 26/11 accused Zaki-ur-Rehman Lakhvi, Hafeez Saeed and Masood Azhar in compliance with the new list by the United Nations Security Council (UNSC).

Published as a Statutory Regulatory Order (SRO) by Pakistan’s Ministry of Foreign Affairs the notification mentions Dawood’s residential address in Karachi contradicting earlier claims that Dawood was not in Pakistan. The latter too may be partially true with Member Parliament Subramanian Swamy telling a TV channel with respect to the probe in the death of Sushant Singh Rajput that all top politicians of Maharashtra meet Dawood Ibrahim in Dubai regularly to convert black money. Perhaps the advance headquarters of Dawood’s notorious D-Company is located in Dubai.

After trying to promote Turkey as leader of the Islamic world in place of Saudi Arabia and splitting the Organization of Islamic Countries (OIC) Pakistani army chief General Qamar Javed Bajwa accompanied by ISI chief Lieutenant General Faiz Hameed dashed off to Saudi Arabia for making amends.

But Crown Prince Mohammed bin Salman declined to meet them, as did Major General Fayyad Al Ruwaili, Saudi Arabia’s Chief of General Staff (CGS). They had to settle for a meeting with the Deputy Defence Minister Sheikh Khalid Bin Salman.

Earlier, Pakistan’s foreign minister Shah Mahmood Qureshi (who was also part of Musharraf’s cabinet) issued a virtual warning to the OIC and indirectly to Suadi Arabia by telling media, “If you (OIC) cannot convene it (meeting on Kashmir), then I’ll be compelled to ask Prime Minister Imran Khan to call a meeting of the Islamic countries that are ready to stand with us on the issue of Kashmir and support the oppressed Kashmiris.”

Amid speculation in Pakistani media that Prime Minister Imran Khan was amenable to sack Shah Mahmood Qureshi, Qureshi rushed to Beijing. Being an old China loyalist, Qureshi is secure in his post and there was no need for him to seek support on Kashmir and the China-Pakistan Economic Corridor (CPEC). His trip was primarily to apprise the Chinese leadership of Pakistan’s compulsion to issue the fresh proscribed list of terrorists on account of the new list issued by the UNSC, and to seek support for the next review by FATF under Presidency of Germany.

Pakistan’s aim at the next review by FATF would be: first, be taken off the ‘Grey List’ by hook or crook’ including under plea that continuation on ‘Grey List’ would deny Pakistan securing more loans that may be catastrophic, and; second, avoid being placed on the ‘Black List’ like North Korea and Iran at all costs.

Pakistan giving up promoting terrorism is out of the question. Restrictions on proscribed terrorists are a façade as they are the proxy arm of Pakistan’s ISI. Pakistani media has revealed in the past that even jail terms for terrorist leaders mean red carpet treatment without any curbs. No worthwhile probe has been conducted in numerous terror attacks in India.

The National Investigation Agency (NIA) has recently charge sheeted JeM chief Masood Azhar, his brother and deputy Rouf Asgar, their cousin Ammar Alvi and 16 others as the prime masterminds behind the February 2019 suicide bombing in Pulwama that killed 40 CRPF personnel.

Prime Minister Imran Khan failed in his effort to get two-FATF related bills passed by the Pakistani Senate on August 25; Anti-Money Laundering (Second Amendment) Bill and the Islamabad Capital Territory (ICT) Waqf Properties Bill, passed by the National Assembly a day before. It is just that the Senate has opposition majority otherwise both bills would have sailed through to help fool the FATF.

Given its past record, there is no way that Pakistan will be able to meet the requirements of FATF. Having repeatedly failed to meet the FATF requirements, Pakistan should have been placed on the ‘Black List’ long back but will it happen in the next review?

The FATF has 39 members including two regional organizations — the European Commission and Gulf Cooperation Council. India is a member of the FATF consultations and its Asia Pacific Group. But to escape the ‘Black List’ Pakistan just needs three countries against the move. It already has firm supporters in Turkey and Malaysia and if it cannot secure support of a third member, China may help ‘buy’ one. Also, Pakistan should not be able to get off the ‘Grey List’ but given the dynamic geopolitical situation none can ever be sure.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Lt Gen Prakash Katoch

is a former Lt Gen Special Forces, Indian Army

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