Pakistan’s FATF woes and challenges for the incoming government

In its latest plenary meeting in Paris, the Financial Action Task Force (FATF) decided to keep Pakistan on its grey list. Pakistan has been kept on the so-called Grey List, which includes countries accused of financing or aiding terrorism. The FATF was established in 1989, with its headquarters in Paris. The main objectives including combating financing of terrorism, money laundering and preserving the integrity of the international financial system.

Pakistan’s listing at the FATF meeting, though expected, failed to take into consideration the fact that the country is currently governed by an interim setup. The interim setup’s mandate and priority number one is holding July polls on time. Hence, focusing on other matters, such as terror financing, do not seem as an urgent priority for the interim government. Having said that, his should not any excuse for Pakistan.

Since February’s listing, Pakistan had more than three months to take concrete measures to thwart global perceptions that the country was responsible for financing terror outfits; mainly the Jamaat ud Dawa (JuD) and Lashkar e Taiba (LeT). On the contrary, a global perception against Pakistan is developing that it has done little to counter terror and extremist groups, and instead trying to politically mainstream such groups.

With far right Tehrik e Labaik and Hafiz Saeed’s aides and associates contesting the upcoming polls, Pakistan’s case is becoming weaker by the day. Moreover, the unfreezing of assets of ASWJ’s (Ahle Sunnat Wal Jamaat) Ahmed Ludhianvi also puts a major question mark on Pakistan’s efforts and weakens its FATF case. Ironically, Ludhianvi’s decision coincides with Pakistan committing to a comprehensive 26 point action plan at the FATF, spanning 15 months, to avoid being put on the black list. The action plan requires Pakistan to choke terror financing of groups such as ISIS (or Daesh), Al Qaeda, Haqqani Network, JuD, LeT and Jaish-e-Mohammed (JeM).

On social media, the decision was seen as a binary, with one side blaming the PML N government whereas the other holding the military responsible for lack of concrete action against banned groups. It is unfair, in the current situation, to blame the outgoing PML-N government alone for this fiasco. Everyone involved in the policy making process, including the military and bureaucracy, should equally take blame for this global shame.

Also, where the ISPR’s spokesperson alluded to proposals for mainstreaming extremist groups recently, the diplomats, on the other hand, also failed to present an effective case highlighting Pakistan’s counter-terror efforts both globally and at the FATF. Finally, the Sharif-led government, embroiled in its own Panama/Iqama fiasco in the final years, gave little attention to this issue. On top of that, the unchecked entry, and progression, of hate-inciting Tehrik e Labaik Pakistan (TLP) and its leader Khadim Hussain Rizvi also showed lack of Pakistan’s seriousness in this regard. Mainstreaming extremist groups looks good on paper, however, it also comes at a cost. A cost that creates complications for the country with it comes to global politics and bilateral relations, along with its global financial transactions kept under strict scrutiny taking longer than usual time.

Pakistan’s current interim setup is currently busy in the day to day management for the upcoming elections, however taking corrective measures in light of the 15-month action plan, submitted to the FATA, should be an equal priority. If Pakistan – in the worst case scenario – is added to the FATA blacklist in future, the incoming government would have a major task on hand to undo the damage caused in the international arena. Where Pakistan’s forex reserves and exports are already on a constant downward spiral, getting on the blacklist would only make things worse. Moreover, in case of inadequate action, Pakistan might even find it hard to keep its friends, mainly China, on board. China has occasionally voiced concerns in this regard, and hence wants Pakistan to take concrete action. These demands could become serious in case Pakistan is placed on the FATF’s blacklist, hence leaving the country with no allies.

In these circumstances, blaming a single party or entity – whether the PML N or the Army – for Pakistan’s FATF woes is not the solution. If the country aims to come clean and get its name off the grey last, only a concerted effort – with the united civil-military effort – against extremist, militant and terror groups is the need of the day to help Pakistan’s case.


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