Hafiz Saeed and FATF grey list


Hafiz Saeed and FATF grey list

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Hafiz Saeed’s conviction is likely to improve Pakistan’s prospects of being removed from the Financial Action Task Force’s (FATF) grey list this month. An anti-terrorism court in Lahore on Tuesday handed five-and-a-half years of jail sentence to the head of Jamaat ud Dawa (JuD), a proscribed charity group allegedly associated with militancy, on two counts of terror financing.
The verdict came a few days ahead of the global finance watchdog’s plenary meeting in Paris to decide Pakistan’s grey list fate.  The court has also convicted Zafar Iqbal, Saeed’s close aide, on the same charges. Alice Wells, chief US diplomat for South Asian affairs, hailed these convictions as a “step forward” for Pakistan.
This is the first high profile conviction of a top militant leader for terror financing, as Pakistan faces the threat of being blacklisted by the FATF. The country has been on the watchdog’s grey list since 2018 due to “strategic deficiencies” in its anti-money laundering and countering financing of terrorism regime. Since then, Pakistan has strengthened anti-money laundering laws and taken action against militant groups.
Pakistan’s failure to take effective measures to curb the funding sources of militant groups remained a major stumbling block for the country. Pakistani officials now appear confident that they have implemented the global watchdog’s 27-point action plan to curb money laundering and terror financing. Pakistan was cleared of 14 of the 27 points at the Asia Pacific Group meeting held in Beijing on Jan. 21-23.
Pakistan was mandated to show tangible progress within two months on other points. The FATF's five-day plenary session begins in Paris on Feb. 16 wherein it will decide whether to remove Pakistan from its grey list or downgrade it further by putting it on blacklist.
Downgrading to the blacklist will have serious ramifications for Pakistan – including increasing its international isolation. Although the watchdog does not have the power to impose sanctions, it can affect international transactions because it exposes states to greater scrutiny. Such restrictions would have disastrous implications for Pakistan’s fragile economy.
For a long time, Pakistan turned a blind eye to the activities of religious charities that are on the UN list of terror groups. But the threat of being blacklisted has forced the government to finally act against such groups. It launched crackdown on JuD and some other radical groups in 2018, following an FATF warning to deliver on its commitments.

The conviction of Hafiz Saeed may help Pakistan convince the global watchdog about its seriousness to curb terror financing and deal with militant groups that continue to work under cover of charity organizations.

Zahid Hussain

Last year, the security agencies closed the offices and various facilities run by JuD and its affiliate, Falah-e-Insaniat Foundation, after Pakistan’s Anti-Terrorism Act was amended to proscribe these charities. Saeed formed JuD in 2002 after Lashkar-e-Taiba (LeT) was proscribed under American pressure. However, Pakistan failed in time to convince the international community that JuD was just a benign charity organization. Despite the fact that the group has been on the UN terrorist watch list for a long time, the network has expanded its operations significantly.
Pakistan had arrested Hafiz Saeed in July last year on various charges, including terror financing.  Interestingly, the action against the founder of LeT, the most notorious of Pakistan’s militant groups, came on the eve of Prime Minister Imran Khan’s visit to Washington on President Donald Trump’s invitation.
The US has placed a $10 million bounty on Saeed’s head, but Pakistan previously resisted international pressure to act against the LeT leader. He is accused by the US and India of masterminding the 2008 Mumbai terror attack wherein more than 160 people, including several citizens of Western countries, were killed. President Trump had swiftly welcomed Pakistan’s action in a tweet, insinuating that it was after “great pressure” from his administration over the last two years that the arrest was made.
Under international pressure, Pakistan repeatedly detained Saeed over the past few years, but he was released on court orders every time. His speeches at public rallies provoked intense international reaction and news of his activities became a red rag of sorts for the global community. The threat of international isolation has finally compelled Islamabad to act against Saeed and other militant leaders.
The conviction of Hafiz Saeed may help Pakistan convince the global watchdog about its seriousness to curb terror financing and deal with militant groups that continue to work under cover of charity organizations.
– Zahid Hussain is an award-winning journalist and author. He is a former scholar at Woodrow Wilson International Centre for Scholar, USA, and a visiting fellow at Wolfson College, University of Cambridge, and at the Stimson Center in Washington DC. He is author of Frontline Pakistan: The struggle with militant Islam (Columbia university press) and The Scorpion’s tail: The relentless rise of Islamic militants in Pakistan (Simon and Schuster, NY). Frontline Pakistan was the book of the year (2007) by the WSJ.
Twitter: @hidhussain 

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