ISLAMABAD: Pakistan may be at risk of being placed back on the international terror-financing watch list of the Financial Action Task Force (FATF).
FATF began its six-day plenary meeting in Paris on Sunday to discuss the safety and security of the global financial system.
The resolution to place Pakistan on FATF’s list is spearheaded by the US, with the support of Britain, France and Germany. The US has reportedly had concerns about the depth of Pakistan’s commitment to tackling money laundering and terror financing.
US-Pakistan relations hit a new low last year when Washington — unveiling its new strategy for Afghanistan — accused Pakistan of harboring and supporting terrorists.
Pakistani Foreign Minister Khawaja Mohammed Asif is currently visiting Moscow on a four-day tour, at the invitation of his Russian counterpart Sergey Lavrov.
Asif will likely raise Islamabad’s concerns about the FATF in an attempt to muster Russian support against the four countries leading the attempt to include Pakistan on the watch list.
Last year, FATF’s International Cooperation Review Group resolved to scrutinize 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 the its next sessions. The global intergovernmental organization meets three times a year.
“This time (the effects) would be even greater because there are other pressures on Pakistan,” political commentator and retired Lt. Gen. Talat Masood told Arab News, speculating on what might happen should Pakistan be included on the watch list again.
“Pakistan’s balance-of-payment position is very adverse at the moment and internal stability is not good. It will have a greater impact than it had last time,” he continued, urging the government to take “appropriate measures” to combat the imminent danger of sanctions.
Pakistan spent five years on FATF’s watch list from 2010, before its compliance with international standards saw it removed from the list.
Masood said that if financial restrictions are imposed on Pakistan, it would be as a result of the country’s “foreign policy and internal situation,” which he said the government needs to review and revise to avoid risking Pakistan’s economic stability and further tainting the country’s international image.
Former diplomat Javed Hafiz, however, believes “it’s an institutional, not a policy, problem.”
Hafiz told Arab News, “It’s a pressure tactic to force Pakistan to do more than it’s already doing. It’s already in our national action plan not to allow banned organizations (or individuals) to operate, even under a new name, and to freeze their assets.”
Senior economist Dr. Syed Nazre Hyder described the potential impact of Pakistan’s inclusion on the watch list — should it happen — as “near lethal.” He pointed out that the cost to banks’ customers will rise, investors in the international capital market would request a much higher rate of return from Pakistan, and multilateral financing organizations would add risk premiums on any money borrowed.
Furthermore, financial experts fear the International Monetary Fund (IMF) may reject any loan extension Pakistan might request as a bailout to curb its widening trade deficit, or offer a new deal with stricter guidelines dictated by the US and the European Union.
“Pakistan will need a loan to pay off its debt burden,” Hyder told Arab News. “If it’s included on the list, the country will face a serious challenge sourcing funds for repayment leading to the possibility of default. This would cripple Pakistan economically.”
Dr. Ashfaq Hasan Khan, a former adviser to the Ministry of Finance, believes Pakistan’s inclusion on the FATF’s list may not have the expected impact, however.
“Pakistan has done a lot as far as anti-money laundering is concerned. It’s taken additional steps last week to further strengthen (that section of law),” said Khan, referring to the government’s seize, freeze, and control operation against Jamat-ud-Dawa (JuD) and its charity wing, the Falah-e-Insaniat Foundation (FIF).
Both JuD and FIF are linked to Hafiz Saeed, whom India accuses of masterminding the November 2008 attacks in Mumbai. Saeed has a $10 million bounty on his head.
Khan believes the impact on Pakistan’s relations with the international financial market would be insignificant. The FATF, he pointed out, “deals with terror financing and money laundering, against which we have taken action.”
Khan said the present government would not allow the US “to pull Pakistan’s strings financially.”
India has also lobbied for Pakistan’s inclusion on the FATF list. But Islamabad is banking heavily on support from China, Russia, Turkey, and members of the Gulf Cooperation Council.
Masood, for one, thinks Pakistan’s need for Chinese support is worrying.
“We are relying far too heavily on China. I don’t think even China likes that,” he said, adding that Pakistan needs to focus on internal stability before it can successfully resist international pressure, and that it should use its relationship with China to gain tangible benefits, rather than “frittering it away to counter negative pressure from the US, India and others.”
Pakistan could face financial sanctions from FATF, say analysts
Pakistan could face financial sanctions from FATF, say analysts
Canada PM Carney says can’t rule out military participation in Iran war
- Carney had said the US-Israeli strikes on Iran were “inconsistent with international law”
- However, he supports the efforts to stop Iran from obtaining a nuclear weapon
CANBERRA, Australia: Canadian Prime Minister Mark Carney said Thursday that he couldn’t rule out his country’s military participation in the escalating war in the Middle East.
Carney’s visit to Australia this week has been overshadowed by expanding war in the Middle East, sparked by a massive US-Israeli strike on Iran that killed its supreme leader, Ayatollah Ali Khamenei.
Speaking alongside local counterpart Anthony Albanese in Canberra, Carney was asked whether there was a situation in which Canada would get involved.
“One can never categorically rule out participation,” he said, while stressing the question was a “hypothetical” one.
“We will stand by our allies,” said Carney, adding that “we will always defend Canadians.”
Carney had said the US-Israeli strikes on Iran were “inconsistent with international law.”
However, he supports the efforts to stop Iran from obtaining a nuclear weapon — a position that Canada takes “with regret” as it represented “another example of the failure of the international order.”
The Canadian leader reiterated on Thursday his call for a “de-escalation” of the conflict.
Carney’s trip is part of a multi-country tour of the Asia-Pacific aimed at reducing reliance on the United States — a hedge against what he has described as a fading US-led global order.
The Australia leg of the tour is aimed at bringing in investment and deepening ties with a like-minded “middle power” partner.
‘Middle power’ rallying cry
On Thursday morning he issued a rallying cry in Australia’s parliament to “middle powers,” urging them to work together in an increasingly hegemonic world order.
Nations like Australia and Canada faced a stark choice — work together to help write the “new rules” of the global order or have great powers do it for them, he said.
“In this brave new world, middle powers cannot simply build higher walls and retreat behind them. We must work together,” he said.
“Great powers can compel, but compulsion comes with costs, both reputational and financial,” the former central banker added.
“Middle powers like Australia and Canada hold this rare convening power because others know we mean what we say and we will match our values with our actions.”
The Canadian leader also said the two countries would together as “strategic collaborators” to pool their vast combined rare earth mineral resources.
And he detailed renewed cooperation in areas from defense to artificial intelligence.
“We know we must work with others who share our values to build solid capabilities,” he told parliament.
Otherwise, he warned, they risked being “caught between the hyperscalers and the hegemons.”
The Canadian leader has frequently clashed with US President Donald Trump, who has repeatedly threatened to annex Canada and slapped swingeing tariffs on the country.
In a speech to political and financial elites at the World Economic Forum in January, Carney warned the US?led global system of governance was enduring “a rupture.”
