Pakistan to go on FATF terror financing list in June

Published: February 24, 2018
Senior officials claim FATF did not follow own procedure, try to downplay negative impact of listing. PHOTO COURTESY: FATF

Senior officials claim FATF did not follow own procedure, try to downplay negative impact of listing. PHOTO COURTESY: FATF

ISLAMABAD: The Financial Action Task Force on Wednesday decided to place Pakistan back on its terror financing watch-list on a list of countries that financially aid terrorism with effect from June but Islamabad believed the decision was politically motivated that may affect its future cooperation.

Despite initially agreeing to Pakistan’s viewpoint, the FATF Plenary decided to place the country on the Grey List from June, confirmed a senior government official who attended FATF meetings in Paris, France. Pakistan was previously on the Grey List from 2012 to 2015.

The federal government does not see any major impact of the FATF’s decision on its economy and the country’s de-facto finance minister said that during 2012 to 2015 period, Pakistan signed agreements with the International Monetary Fund and issued sovereign bonds in international capital markets.

Sources claim Pakistan back on FATF watch-list, govt says no ‘official intimation’ yet

Pakistan’s financial system was strong and its anti-money laundering and counter-terrorism financing regimes were among the most stringent in the world, said Dr Miftah Ismail.

The decision is seen as being against the norms of the FATF and its sister organisations, as the country’s Mutual Evaluation – a process of assessing levels of implementation of FATF recommendations, was currently undergoing.

The Mutual Evaluations also provide an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.

The decision to place a member country on the FATF list is usually taken in light of the Mutual Evaluation, so FATF’s latest move suggests that Pakistan was falling victim to international politics, government officials said while requesting anonymity.

“Pakistan has serious concerns and objections to the introduction of this new nomination procedure, which is unprecedented and in clear violation of the established rules and practices of FATF”, the FO spokesman said on Friday.

Most of the concerns raised by the US regarding deficiencies in our Counter Financing Terrorism and Anti money laundering regime had already been addressed in 2015, when Pakistan was taken off the “grey list”.

Where from here

Now, FATF would require Pakistan to submit an Action Plan in May in order to be removed from the list in the coming months or years. Once the FATF approves this Action Plan in June, there will be a formal announcement from FATF about placing Pakistan on the Grey List.

If Pakistan fails to submit a plan, the FATF has the option of placing the country on its Black List, which carries adverse implications. This limits Pakistan’s ability to decide whether it should cooperate with the FATF or not due to the global body’s ‘unjust decision’.

The US and UK jointly submitted a resolution to the FATF nominating Pakistan for placement in the Grey List. France and Germany subsequently joined this nomination.

FATF move ‘unjust’, Trump aide told

Reforms issues

The Financial Action Task Force (FATF) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT).

About two and half years ago, the global body had struck off Pakistan’s name after the country agreed to take actions against Hafiz Saeed’s Jamaat-ud-Dawa (JuD) and the Falah-e-Insaniyat Foundation (FIF) and Lashakar Tayiba.

However, some of these actions remained pending, and Pakistan only finished checking the off about two months ago. During the International Country Risk Guide (ICRG) session that took place a day before FATF plenary, some member countries had raised the question that there was no analysis available to judge Pakistan’s action, said the officials.

Upon this Adviser to Prime Minister on Finance Dr Miftah Ismail offered that Pakistan was ready to submit a report on its action plan and after that the FATF should take the decision, the officials said. At that point, Japan supported Pakistan’s view that action should be taken on the basis of the evidence.

The ICRG agreed to this proposal that Pakistan would take certain measures to address the international community’s concerns and in light of those measures the FATF should take steps in future, according to the officials.

China also advised Pakistan to sign an agreement with the FATF on the measures that it would take in next three months, said the officials.

The pre plenary meeting ended on this positive note and this was also the reason behind Foreign Minister Khawaja Asif’s tweet in which he announced that FATF deferred the decision for three months and asked the Asia Pacific Group for another report on Pakistan, according to the officials.

Financial Action Task Force correctly faults Pakistan

However, to the surprise of Pakistani authorities, the US used its influence and turned the tables on Pakistan by influencing the other countries and to have them to first analyze the actions that Pakistan has already taken, according to the people who attended the meeting.

The FATF decided to place Pakistan on the grey list on the undue pressure from the United States, according to Pakistani authorities. They claim that during the meeting when the representative of Gulf Cooperation Council raised hand to speak, the US representative rushed to the GCC seat and asked the representative not to speak, according to the officials.

The FATF decision, which is against its norms, could frustrate Pakistan’s genuine efforts and the government will decide whether it should cooperate with a global body that is playing in the hands of the US, said the Pakistani authorities.

The officials said that the only weak area was that Pakistani courts were convicting terrorists but were not imposing fines on them on charges of terrorism financing.

Tweet too soon

On February 20, Foreign Minister Khawaja Asif had claimed on Twitter that there was no consensus for nominating Pakistan for listing, and that a three-month pause had been proposed. He also said that listing would be reconsidered in June.

Foreign analysts suggested that the late push against Pakistan may have been provoked by the leaking of information from the FATF meeting, with some pointing specifically to Asif’s tweet.

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Reader Comments (12)

  • Faisal Wahab
    Feb 24, 2018 - 12:43AM

    I think you should better look at this before going all bonkers on the media and parroting the Indian and international media without checking.

  • Pakistani
    Feb 24, 2018 - 12:55AM

    This form is a another pressure tactic to intimidate Pakistan.Recommend

  • Hamza
    Feb 24, 2018 - 12:57AM

    This is bogus reporting. Nothing true about Pakistan being on the gray FATF list. Shame on the Express Tribune. Recommend

  • BrainBro
    Feb 24, 2018 - 2:27AM

    China and Saudi Arabia supported the motion; does this mean they are also politically motivated against Pakistan.Recommend

  • numbersnumbers
    Feb 24, 2018 - 2:49AM

    Pakistan was given a stark choice over the past few years!

    1) Support international norms against terrorists, terrorist financing and money laundering!

    2) Continue to support globally known and banned organizations!

    And the choice was …… predictable!Recommend

  • Say the Truth
    Feb 24, 2018 - 5:56AM

    India will become Pakistan and we will rule India the way we did in the past. Keep on messing with Pakistan and enjoy your short ride. If Pakistan is trouble do you think India will be licking lolly pop. So much hatred by Hindus but we love our India we will Unite you with Greater Pakistan and you will live peacefully under us.Recommend

  • abu baba
    Feb 24, 2018 - 7:37AM

    well we all know its true, why the facade. Recommend

  • Bangalorean
    Feb 24, 2018 - 9:35AM

    Congratulations you have done it.Thanks to HSayeed for doing this.What your neighbour can’t do you did it.Congratulations for establishment for dragging the nation into this list with policies of good and bad terrorist,funding violence in your neighbourhood and helping them launch political parties.Now every citizen of this nation will be checked twice at international airports.Students won’t get admissions and jobs.No bank will bailout your debt.No one will buy ur bonds.You did it!!!Recommend

  • Lalit
    Feb 24, 2018 - 11:06AM

    The bigger thing which is being missed here is that Pakistan has to,by May 2018 submit a plan detailing how they propose to take stringent financial and punitive actions against terror organisations(includes LeT and good Taliban too) failing which they have a sword of being blacklisted ,dangling over their heads.So grey list is the minimum and blacklist is the target for Pakistan.Recommend

  • abid
    Feb 24, 2018 - 12:23PM

    Pakistan must follow 3 steps before June 2018 : 1) forcefully send at least 500,000 illegal afghan refugees back to Afghanistan. It was Afghanistan regime who is cheering on Pakistan being placed on FATF grey list, despite Germany and UK are kicking out afghans from their country. It will create meaningful pressure on Afghan Government and their Western masters.
    2)Charge a nominal fees on afghans who cross border for private purpose. Their is no need to charge on Afghan and Pakistani traders. This money should be used to finance border fence.Confiscate the properties for all the afghan leaders currently in Afghanistan regime that are anti Pakistan.
    3) Harass the military aircrafts that use Pakistan airspace and air traffic to increase their flight cost till June 2018 , when the plenary session of FATF again start and also delay the nato military equipment to be deliver in Afghanistan that use Pakistan ports.
    4) Suspend all the communications and intelligence cooperation with USA on Afghanistan issues.
    5)Many pakistani are thinking that usa is acting on behalf of india , no , it is acting on self interest , its main interest is to engineer isis ,taliban and other insurgents to destabilize russia, iran and pakistan. Like the way they are doing in syria creating big problems fro iran , turkey, russia and middle east.Recommend

  • Irtaza M. Awan
    Feb 24, 2018 - 3:08PM

    We can convert this to an opportunity by doing the needful and introducing reforms that will address the concerns of international community. We cannot live in isolation like North Korea. We have to be sensitive to concerns of international community rather than just rejecting them as some sort of conspiracy against us. We have used this justification in past to avoid taking necessary steps in time.Recommend

  • Haji Atiya
    Feb 24, 2018 - 6:17PM

    Agreed, very well put. Lastly, and to the extent possible, get that fence up along the Afpak border and shoot down foreign drones.Recommend

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