Money laundering watchdog: Government flays blacklisting decision

Officials say US ‘pressurising Pakistan to accede to its terms’.

ISLAMABAD:

Terming the international money laundering watchdog’s decision to blacklist Pakistan “unjustified and unreasonable,” the government believes it has already met all international standards regarding amendments to the Anti-Terrorism Act.

The Financial Action Task Force (FATF), an inter-governmental body working to combat money laundering and financing terrorists, blacklisted Pakistan along with four other countries for not meeting deadlines and flouting recommendations made to them to fight the menace. The FATF blacklist now includes 17 countries.

The government will give a formal response after reviewing the implications, but authorities believe that it was more an act of the United States “pressuring Pakistan to dictate its terms.”

A top finance ministry official on the condition of anonymity said that “Pakistan is neither running away from meeting international standards nor is it a law-deficient state.” The official added that in October 2011, the FATF preliminary report proposed amendments in the Anti-Terrorism Act 1997.

These amendments, pertaining to freezing of assets and forfeiture, have already been covered in the National Accountability Bureau Ordinance and Anti-Money Laundering Act, said the official. Pakistan contended that it was ready to incorporate these amendments in the Anti-Terrorism Act, but needed more time to take stakeholders into confidence.

The official said the country needed at least one year to complete the consultation process and get the amendments passed by Parliament. He said one of the adverse implications could be that international trade will get affected due to the difficulties in opening letters of credit.

He said the US hectically lobbied among the European countries to get Pakistan blacklisted in an attempt to put more pressure on Islamabad. The FATF is likely to review its decision in June.

Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh said in a terse response that “the government had anticipated its blacklisting and tried to resolve the issue through dialogue.”

Analysts, however, say the authorities had sufficient time to amend laws. “Keeping in mind the adverse implications of being blacklisted, the government should have promulgated an ordinance earlier,” said Dr Ikramul Haq, an expert in anti-money laundering issues. He said if the government can introduce a constitutional amendment within 25 days, changes to the Act or at least the promulgation of an ordinance was much easier.

Haq said that if Pakistan did not amend its laws, it would affect new investment and international trade. Haq added that the government was collaborating with Australia, World Bank and the United Nations to impart training to the judiciary and law enforcement agencies regarding issues  of the anti-money laundering act.

Published in The Express Tribune, February 18^th, 2012.