The Financial Action Task Force (FATF) was formed in 1989 by the G7 Summit in Paris to combat the growing problem of money laundering, monitoring legislative, financial and law enforcement activities taken at the national and international level, reporting on compliance, and issuing recommendations.
The organisation’s mandate was expanded to include terrorist financing following the September 11 terror attacks in the US in 2001.
Although FATF’s member-countries are the US and other Western countries, including many Islamic states, yet decisions of the US-led major Western countries prevail on the organisation. Hence, FATF shows duplicity, as it has become a tool of keeping pressure on Pakistan, while ignoring India.
In this regard, after five-day plenary meeting in Paris, FATF announced on June 25, this year that Pakistan will continue to remain on its grey list.
Announcing the decision in a virtual press conference, FATF President Dr Marcus Pleyer said: “Pakistan has made significant progress…has largely addressed 26 out of 27 items on the action plan.”
Pleyer also stated that the item on financial terrorism still needed to be addressed which concerned the “investigation and prosecution of senior leaders and commanders of UN-designated terror groups.”
Earlier, Foreign Minister Shah Mahmood Qureshi had said, as Pakistan had fulfilled 26 out of 27 action items of the Financial Action Task Force, there was no justification for the country to remain in the grey list.
But, reacting to the unexpected verdict of the FATF, Foreign Minister Qureshi questioned its decision, saying: “It is to be determined whether FATF is a political forum or a technical one…whether it is being used to achieve political objectives.” He regretted that “some forces want the sword to continue hanging over Pakistan.”
Besides, criticising the global financial watchdog’s findings, a number of senior journalists, politicians and activists took to Twitter, expressing surprise on the FATF, raising doubts on its integrity.
Particularly, Jamaat-i-Islami Central Vice President Mian Aslam sniffed a global conspiracy behind the FATF decision and asked the government not to surrender its freedom.
However, Pakistan’s continuation on the ‘grey list’ means that it will not get any respite in trying to access finances in the form of investments and aid from global entities, including international bodies like IMF.
Notably, in a second Follow up Report (FUR) on the Mutual Evaluation of Pakistan, released on June 5, 2021, the Asia Pacific Group (APG) which is a regional body of the Paris-based FATF said that Pakistan’s rating on 21 of the 40 technical recommendations of the FATF against money laundering and terror financing had been improved, but retained it on ‘Enhanced Follow-up’ for sufficient outstanding requirements.
Islamabad had submitted its third progress report in February 2021, few weeks ahead of a meeting of the FATF to decide on Pakistan’s grey list status.
After holding the plenary meetings virtually from February 22-25, 2021 in Paris, the FATF had kept Pakistan on the grey list for another extended period till June 2021 and asked for complying with the remaining three points of 27 action plan.
FATF’s three remaining demands includes (1) TF [terror financing] investigations and prosecutions of target persons and entities (2) TF prosecutions result in effective, proportionate and dissuasive sanctions and (3) effective implementation of targeted financial sanctions TFS [terror financing sanctions) against all 1267 and 1373 designated terrorists, specifically those acting for or on their behalf.
In fact, active Indian lobbying and propaganda campaign to blacklist Pakistan failed, while a minimum of three votes by FATF members are required to avoid the blacklist and Islamabad enjoys the unwavering support of Malaysia, Turkey, and its all-weather friend China.
Some pro-Indian European countries, especially France and Germany, had recommended to the FATF to maintain Pakistan on the gray checklist, saying that not all factors had been totally applied by Islamabad.
Last year, the PTI-led government got three laws—the Anti-Money Laundering (second amendment) Bill-2020, Anti-Terrorism Act (ATA) (third amendment) Bill-2020 and Islamabad Capital Territory Waqf Properties Bill-2020, which were passed in the joint sitting of Parliament.
In recent months, law enforcement agencies have cracked down on hardliner-religious groups such as Tehreek-e-Labaik Pakistan (TLP)—particularly Lashkar-e-Taiba (LeT) and its welfare arms, Jamaatud Dawa (JuD) and Falah-e-Insanyat—and on their sources of income, arresting, trying, and convicting several of their members and leaders.
Pakistan has been on the grey list of the FATF since June 2018. In this respect, some Western countries and especially India have been calling on Islamabad to take action against the terror groups to avoid ‘Dark Gray’ list status of the FATF. They have long failed to do. Indian media spreads disinformation that Pakistan may be put on ‘Dark Grey’ list.
For years, New Delhi has been, also accusing Islamabad of using the banking system to sponsor terrorism.
On the other side, involvement of Indian banks in money laundering and financing terrorism has been exposed. In this context, on September 27, last year, a report of the top-secret files of the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) which works to combat money laundering, terrorism financing and financial fraud has revealed the “involvement of Indian banks, including the state-owned banks in money laundering through transactions used in facilitating and financing acts of terrorism, particularly in the region—The entities and individuals were involved in money laundering of $1.53 billion through 3,201 illegal and suspicious transactions between 2011 and 2017.”
There are also reports that gold and diamond were also used for money laundering, while Indian Premier League (cricket tournament) has also been pointed out for money laundering practices by Indian judiciary.
It is mentionable that in November, 2020 at a joint press conference and a joint press briefing, Director General of ISPR Major-General Babar Iftikhar and Foreign Minister Shah Mahmood Qureshi unveiled a dossier containing “irrefutable evidence” of India’s sponsorship of terrorism in Pakistan. They revealed: “We have apprehended a RAW-sponsored sleeper cell in Karachi, which wants to create unrest in the country…India united Tehreek-e-Taliban Pakistan [TTP] with banned dissident [Terror] organizations…Indian intelligence agencies are also trying to establish Daesh-e-Pakistan…has recently shifted 30 terrorists of Daesh to Pakistan.”
Pakistan’s Ambassador to the UN Munir Akram handed over the dossier to the UN Secretary General Antonio Guterres.
In its 27th report, dated February 3, 2021, the UN Security Council’s monitoring team for tracking terrorist groups verified Pakistan’s dossier, while acknowledging Pakistan’s efforts in arresting individuals engaging in terrorism financing and noting the threat from the TTP—the reunification of splinter groups [of TTP] in Afghanistan, which enhanced the threat of terrorism not only to Pakistan but the entire region.
According to the UN report of July 26, 2020, “The banned Tehreek-e-Taliban Pakistan and its splinter group Jamaat-ul-Ahrar continue to target Pakistan from their bases in Afghanistan…the significant presence of ISIL-K (The Islamic State of Iraq and the Levant Khorasan) in Afghanistan”, which the UN warns “now pursues a global agenda.”
And the EU DisinfoLab continued unraveling gradually, India’s terror-network and anti-Pakistan propaganda campaign.
Nonetheless, the case of Pakistan will, again, be considered in the next plenary meeting of the FATF which is due to take place in October, this year, while this time, the decision of the FATF has clearly exposed its duplicity.
