India rejects Pakistan’s charge of politicising FATF

‘Allegation meant to deflect attention’

June 23, 2019 10:17 pm | Updated December 03, 2021 08:33 am IST - NEW DELHI

Pakistan Foreign Minister Shah Mehmood Qureshi. File photo: Reuters

Pakistan Foreign Minister Shah Mehmood Qureshi. File photo: Reuters

India on Sunday rejected Pakistan’s allegation that it had sought to “politicise” deliberations at the Financial Action Task Force (FATF), which concluded its plenary last week with more strictures against Pakistan.

According to sources, the government has taken a strong view of Pakistan’s accusation that India had launched a “malicious campaign” to use the FATF’s process for its own “narrow, partisan objectives” against Pakistan. Pakistan’s Foreign Ministry was, in turn, responding to India’s statement that time was running out for Islamabad to show action “Against Money Laundering and Combating Financing of Terror (AML/CFT)” by groups that pose a transnational risk.

Calling Pakistan’s statement on politicisation a “false ploy” meant to “deflect attention and evade scrutiny of [Pakistan’s] poor compliance of global standards on AML/CFT and hoodwink the global community”, the government sources pointed to Pakistan’s own attempts at trying to influence the outcome of the FATF process, which has placed the neighbour on a “greylist” of countries of concern. In June 2018, the FATF decided unanimously to put Pakistan on the greylist, and hand it a 27-point action plan meant to be implemented within 18 months (by September 2019). If it fails to fulfil its FATF commitments, it could face the “next steps” or being moved to the “blacklist”, the FATF has warned.

 

The sources say that instead of moving seriously on the checklist, including shutting down support for groups such as the Lashkar-e-Taiba and Jaish-e-Mohammad, Pakistan’s leadership has been trying to influence FATF member countries for support. At the most recent FATF plenary, where proceedings are meant to be secret and taken by consensus, Pakistan is believed to have received the backing of China, Turkey and Malaysia to avert being put on the blacklist immediately.

In particular, the sources pointed to Pakistan Foreign Minister Shah Mehmood Qureshi’s visits to various capitals, and telephone calls to other FATF member governments asking for help in staving off pressure at the global watchdog body’s plenary session.

At the Orlando plenary, apart from China, Turkey and Malaysia, three countries Prime Minister Imran Khan has visited in the past few months, countries such as Indonesia, Saudi Arabia and the Gulf Cooperation Council members pitched for more time for Pakistan to comply with the action plan. However, the U.S., Japan and Israel joined India in ensuring a firm line was taken in the final outcome document.

 

Another potential worry for India is that China’s appointee Xiamen Liu has taken over the presidency of the FATF from the U.S. from this month. While the President essentially has an administrative position, he or she decides on the focus of the agenda. The outgoing president, Marshall Billingslea, for example, steered the body towards more strictures or “counter-measures” against Iran over the past year.

The rapid cross-fire of statements between Islamabad and New Delhi over the FATF’s latest strictures indicate that the next three months, ahead of the next plenary session when the task force will conduct a full review of Pakistan’s actions, will see more such heated exchanges. India has been publicly pushing for Pakistan to be placed on the “blacklist”, alongside Iran and North Korea for its failure to show “credible, verifiable, irreversible and sustainable measures” against terror groups operating within its territory.

Pakistan has often cried foul over India’s statements, and even wrote to the FATF earlier this year asking for India to be taken off the committee overseeing the review after former Finance Minister Arun Jaitley said Pakistan should be downgraded by the FATF.

A blacklist entry for Pakistan will mean it could lose potential loans and foreign investment, be shunned by the IMF, the World Bank, the ADB and the EU and also suffer a downgrade by credit rating agencies such as Moody’s, S&P and Fitch.

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