Pakistan could escape being blacklisted by the Financial Action Task Force (FATF) on Friday, but even if it does, the international watchdog on terror finance is likely to issue strong warnings to the South Asian nation’s government, in addition to keeping the country on the grey list, sources said.
On Tuesday, the FATF’s International Co-operation Review Group (ICRG) discussed Pakistan’s actions for countering terror financing and anti- money laundering (CFT/AML), and the final discussion is scheduled to be held on Friday.
Diplomatic sources stressed that no decision on the Pakistan listing had been taken as yet by the task force, and that the 39-member body would only decide whether to continue keeping Pakistan on the grey list or downgrade it to the blacklist, at its final plenary meeting on Friday. Given that China, Turkey and Malaysia were ranged against blacklisting Pakistan at the plenary session in June, and continued to support Pakistan during the UNGA on other issues, officials have been saying that it was unlikely these countries would allow a blacklisting at this time.
The latest mutual evaluation report released by the Asia Pacific Group (APG) on CFT and AML released on October 14, assigned a national risk-rating of ‘medium’ to Pakistan.
The report said that “several United Nations listed organisations continue to operate openly in Pakistan, including holding fundraising events” and that since February 2018 Pakistan had taken positive actions against these organisations “but UNSCR 1267 is not being fully implemented”.
Pakistan is expected to be kept under “significant and sustained” pressure to deliver on the 27-point action plan by February 2020, when the next plenary session will be held, the sources added. “While there has been acknowledgement that some action has been taken [by Pakistan], it is not enough, and the pressure will only increase from this point on,” said a diplomat, speaking on condition of anonymity. Government officials expect that Pakistan will be issued severe warnings to comply with the full plan in the next few months.
Pakistan was previously placed on the FATF’s grey list in February 2012, and had been removed from the grey list in 2015 after it passed a National Action Plan (NAP) to deal with terrorism after the Peshawar School massacre in December 2014. The country, which had been placed under severe restrictions between 2008-2012, was put back on the grey list in 2018. The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
The APG said in its report that Pakistan faces “significant risks of terrorist financing both from legitimate and illegitimate sources as well as weak, or no, regulation/supervision of certain sectors (such as hawala/hundi) and porous borders.”
“Pakistan’s geographical links to regional neighbours (Afghanistan and Iran, in particular) heighten Pakistan’s terrorist financing (TF) risks associated with bulk cash smuggling. Also terrorist groups operating in Pakistan are reported to include, but not limited to, Islamic State in Khorasan province (ISKP), Tehrik-e Taliban Pakistan, Quetta, Shura Taliban, Haqqani Network, and Lashkar-e-Taiba (including its affiliates Jamaat-ud-Dawa and Falah-i-Insaniat Foundation), which raise funds through a variety of means including direct support, public fundraising... and through criminal activities,” the APG said.
In the period under review, Pakistan registered 228 TF cases and convicted 58 individuals, which is not consistent with Pakistan’s overall level of TF risk, the group said.
“The vast majority of TF investigations, and all of the convictions entered, were obtained at the provincial level with 49 convictions in Punjab. A total of nine TF convictions for all other provinces in Pakistan is not consistent with province-specific TF risks,” the APG said.
Earlier this week, National Security Adviser Ajit Doval lauded the efforts of Indian agencies at the FATF platform. He said that the “biggest pressure on Pakistan is from FATF” and this could be done as evidence collected by various agencies against Pakistan’s involvement in terror activities was placed before the international body.