Financial Action Task Force and Pakistan’s response
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The Financial Action Task Force’s (FATF) plenary meeting is scheduled in the last week of this month and Pakistan’s government is anticipating substantial relief in the session starting June 24.
In its last assemblage in February 2021, the FATF asked Pakistan to address three strategically important insufficiencies linked to probes and prosecutions of terrorism-financing cases. It also demanded proof and most importantly asked for the adequate implementation of targeted monetary sanctions against all UN Security Council designated incendiaries.
Declarations by officials seem to depict a Pakistan that is favorably approaching FATF recommendations with full compliance.
Asia-Pacific group (APG), an FATF affiliate on money-laundering issues, has published its second follow-up report on Pakistan and has evaluated Pakistan’s overall compliance as positive.
Pakistan was placed on the FATF blacklist in February 2008 based on the Asian Pacific group’s first evaluation report in 2004 due to widespread militancy in the country as a consequence of 9/11 and the Afghan war, the presence of several non-state actors and militant organizations like Al-Qaeda. South Asia, and Pakistan in particular, suffered acute militancy with civilian fatalities and destruction to the national infrastructure. For this, Pakistan was blamed by the global powers for inadequate control measures over the flow of funds that were allegedly being used for terrorist financing (TF).
Even though Pakistan has been implementing FATF recommendations effectively, it is up for debate why the country is still on the grey list and whether this has to do purely with the FATF’s technical parameters or with world politics.
Hina Ayra
Countrywide military operations surmounted the terrorism index and Pakistan’s rating at the FATF was revised from dark to grey in 2010. However, due to a lack of amendments in the Anti-Terrorism Act (ATA) 1997 and other deficiencies in the legal domain, Pakistan was still in the dark list in February 2012. After the amendment in ATA, Pakistan was listed in the grey list and remained there till 2015.
Since 2018, Pakistan has taken concrete measures by following the action plan given by the FATF. Till the last plenary session, Pakistan has progressed by achieving 24 out of 27 points and is likely to achieve the remaining as well.
Interestingly, Pakistan is the only country that is under dual scrutiny, even though it has been implementing the action plan effectively as well as its following of the mutual evaluation report (MER).
There is significant progress in this regard as well, with Pakistan accomplishing 31 recommendations out of 40 and is well poised to comply with the ones that remain.
Even though Pakistan has been implementing FATF recommendations effectively, it is up for debate why the country is still on the grey list and whether this has to do purely with the FATF’s technical parameters or with world politics.
FATF has always maintained it is neutral and claims that the observations it makes are for the betterment of the country.
Pakistan has come a long way since it undertook the FATF Action Plan in 2018. The country was previously blamed for not having concrete measures and laws in place to counter money laundering and counter finance terrorism, but since 2018, Pakistan has legislated 16 new and amended a few old acts and laws to effectively monitor all kinds of cash flows in and out of the country. These new laws and acts also cater for all kind of donations for charity.
The most important aspect all this effort, is the true resolve of the government, which succeeded in the legislation process and passed the desired laws.
A real colossal effort has been made to take action against organizations like Jamaat ud Dawa, which are allegedly blamed for various terror activities in and outside Pakistan. Their arrests have been taken over by the government and their networks dismantled to achieve the desired rating in the FATF action plan. The leadership of these organizations have been convicted and prosecuted for their offenses.
There is a dire need to consolidate all efforts put in during the last three years and to ensure these laws and acts are implemented across the board. The civil administration should be stimulated to keep a focus on people and entities involved in terror financing and outlawed organizations, which should not be allowed to re-emerge at any cost. No pressure group, financial institution, political, religious party or any section of society should be permitted to deviate from it as these are for the good of the system and ultimately Pakistan.
- Hina Ayra is an economist, business consultant and a writer. Twitter: @HinaAyra
