The reviews conducted by the FATF over the last one year have exposed Pakistan’s so-called fight against terror financing.
ADITYA RAJ KAUL16 October, 2019 9:00 am IST
PM Narendra Modi | Photo: Vijay Verma | PTI
Text Size: A- A+
In a pre-dawn strike on 10 February 2018, three Jaish-e-Mohammad fidayeen attackers laid siege at the Sunjuwan Military Station in Jammu, which was hardly a few miles away from the Jammu University. The attackers, who were believed to be from the FATA region of Pakistan, kept the gun-battle raging for more than 24 hours in which six Army soldiers and a civilian were killed.
While India was caught unawares by this fidayeen strike, the North Block was fast losing patience with Pakistan’s hypocrisy in fighting terror and instead unleashing a proxy war through home-grown terror groups. After a nod from the South Block, days before this attack, multiple agencies sitting in the North Block began the painstakingly long exercise of putting together hard-evidence of Pakistani state financially supporting various terror groups operating on its soil. On top of its list were terror groups Lashkar-e-Taiba and Jaish-e-Mohammad, led by Hafiz Saeed and Maulana Masood Azhar, who operated through various trusts, NGOs and charities.
“Pakistan, in spite of us giving dossiers after dossiers, has not taken any action. On the contrary, we find people who are directly responsible for Mumbai attacks and many others are free and happily roaming in Pakistan (sic). We will be providing every evidence to prove that the handlers are back in Pakistan,” India’s then-Defence Minister Nirmala Sitharaman told me in response to a question, minutes after the counter-terror operation ended in Jammu.
However, this time around, the evidence was not going to be shared with Islamabad unlike after the Mumbai 26/11 attacks or even after the Pathankot and Uri terror attacks. In an unprecedented exercise, India prevailed over the member-nations of the Financial Action Task Force (FATF) headquartered in Paris after one-on-one interaction with countries about the sponsorship of terror from Pakistan to India and its global consequences.
On 23 February 2018, the FATF decided to put Pakistan on the watchlist; the country was officially put on the grey list of the anti-money laundering watchdog on 27 June.
The US motion to put Pakistan on the grey list, which was firmly backed by France and the UK, was initially opposed by China during the internal deliberations on 20 February 2018, but Pakistan faced its all-weather friend China’s betrayal as it revoked its objections at the last minute. The setbacks had just begun for Pakistan.
Pakistan & Chinese interests
Yet another FATF plenary session started in Paris this Sunday. All eyes will be on the 39 members of FATF and the participants from 205 jurisdictions, and their focus on finding ways to disrupt the financial flows linked to crime and terrorism for global safety and security.
The international attention, however, is on Pakistan, which has ignored multiple warnings of the international watchdog during the grey list period and has refused to show actionable evidence of its commitment towards the 27-point action plan shared by the FATF. The question being asked in India is: Will Pakistan be now put on the FATF blacklist?
The answer to that question cannot be given in isolation, without understanding the organisational structure of the FATF that has changed in the recent times. On 1 July 2019, Xiangmin Liu, Director General of the Legal Department at People’s Bank of China, was appointed president of the FATF.
Liu, who is known as the architect of China’s anti-terror financing policies, could be next in line to become the chief of the People’s Bank of China after his tenure at the FATF ends. The top appointment, however, needs the blessings of both Xi Jinping and the Communist Party.
With its massive investment in the China-Pakistan Economic Corridor (CPEC), Beijing would never let Islamabad suffer an economic onslaught, which would end up hurting its own interests. During the recent ‘Chennai Connect’, which was a sequel to the ‘Wuhan Spirit, Xi Jinping may have committed to fighting terrorism and radicalism along with India with focus on uprooting terror financing, but in the current scheme of global diplomacy, Beijing is unlikely to publicly give a cold-shoulder to Pakistan.
FATF losing patience
Liu, however, cannot give Pakistan a long rope. During his tenure as the vice-president of the FATF, Pakistan has often failed to demonstrate action against terror financing as per the initial 10-point action plan or the 27-point action plan shared at a later stage. The reviews conducted by the FATF over the last one year have exposed Pakistan’s so-called fight against terror financing.
In its Mutual Evaluation Report on Pakistan, released earlier this month, the Asia Pacific Group on Money Laundering (APG), which is a subsidiary of the FATF and based in Australia, has come down hard on Islamabad. “Pakistan has not taken sufficient measures to fully implement UNSCR 1267 obligations against all listed individuals and entities – especially those associated with Lashkar-e-Tayyiba (LeT)/Jamaat-ud-Dawa (JuD), and Falah-i-Insaniat Foundation (FiF) as well as the groups’s leader Hafiz Saeed,” the report read.
“Despite being listed by the UNSCR 1267 Committee in 2008 (JuD) and 2012 (FiF), before February 2018, JuD/FiF openly operated in Pakistan, including holding public rallies and fundraising events. Numerous Pakistani media reports showed FiF raising funds ostensibly for humanitarian relief, as well as operating a large ambulance fleet, which calls into question whether the prohibition on providing funds and financial services was being fully implemented’, the 229-page report said.
It’s evident that the FATF is fast losing patience with Pakistan. India on the other hand isn’t going to lose any opportunity to isolate Islamabad diplomatically, more so after the Pulwama terror attack on 14 February, which killed 40 paramilitary personnel and also brought about a paradigm shift in New Delhi’s Pakistan policy. Earlier, India had submitted a dossier to the FATF members, linking the Pulwama suicide attack to Pakistan-based terror group Jaish-e-Mohammad and revealing the funding network of the group through various trusts and charities.
Fighting the perception battle
Pakistan has satisfied the FATF only on six of the 27 parameters, which means that the global economic isolation of Pakistan could be imminent. An economic nightmare would entail Pakistan losing trust of not just the International Monetary Fund (IMF), but also the European Union (EU) and the World Bank – all of them have come to Pakistan’s rescue one way or the other in recent times.
It may take a little more than a week to know if Pakistan makes it to the blacklist, which already has countries like Iran and North Korea. But fighting the perception battle won’t be easy for Pakistan Prime Minister Imran Khan who has been lobbying desperately with China, US, Saudi Arabia and Turkey to avoid an economic deathtrap.
“Our Foreign Office did an analysis about the loss to the Pakistani government due to grey-listing,” a worried Pakistani Foreign Minister Shah Mehmood Qureshi told media-persons in April while answering questions on the FATF warning to Pakistan on the lack of steps taken against terror-financing on its soil. “Experts calculated the loss figure to $10 billion. It’s a scary picture. We have now asked experts to analyse the loss due to blacklisting. God save us from the blacklist,” he pleaded.
God may save Pakistan for the time being, with the country likely to move from the grey to the dark grey list, even as it continues to estimate the losses. Yet, how many shades of grey can come to Pakistan’s rescue before the black shadow engulfs it?
The author is an independent journalist. Views are personal.