Countering terror-financing: bottlenecks

Combating money laundering and terror financing has assumed greater importance as elements and gauging factors in international relations. The Financial Action Task Force (FATF), an inter-governmental organisation founded during the 1989 G7 summit to meet the emerging challenges of terrorism, has become a vibrant institution that sets standards with an avowed objective to ensure an effective implementation of legal, regulatory and operational measures for fighting money laundering, terror financing and other related threats to the integrity of the international financial system. The Asia Pacific Group (APG) is a subsidiary organisation tasked to oversee the implementation of anti-money laundering policies and initiatives as well as to secure an agreement to establish a more permanent regional anti-money laundering body.

Although these entities are not without criticism and are being blamed for using their policies to pressurise developing countries to fall in line with the powerful countries, the bitter truth is that terrorism is now an internal problem and we are still grappling with the associated problem of an undocumented economy and violent non-state actors which are operating under the guise of charities and other forums. The fact remains that terrorist organisations cannot operate their networks without finances. Therefore, choking their finances is vital for the dismantling of such networks. We can boast of all the laws in place to deal with this issue, such as the Pakistan Penal Code, Criminal Procedure Code, Qanun-e-Shahadat (Law of Evidence), Anti Money Laundering Act 2010, Anti-Terrorism Act 1997, Investigation of Fair Trial Act 2014, Securities and Exchange Commission of Pakistan Act 1997, State Bank, Companies Act 2017, Societies Registration Act 1860, etc, and of being signatory to all kinds of treaties that deal with terror financing. But the problem lies in their efficient and effective implementation.

Having realised the gravity of the situation, the first-ever National Internal Security Policy of Pakistan 2014-2018 (NISP) provided broad guidelines to protect the national interests of Pakistan by enhancing deterrence and the capacity of the security apparatus to neutralise the threats to Pakistan’s internal security. The guidelines gave a lead role to the Counter Terrorism Department (CTD) by re-organisation comprising of intelligence, operations, investigations and other technical sections, enabling themselves to deal with the entire spectrum of internal security threats including terrorism and subversive activities. The National Action Plan (NAP) further augmented and simplified those points, according the highest priority to choking terror financing. In line with the same spirit, the Home and Tribal Affairs Department Khyber-Pakhtunkhwa formed a working group for reforms in the criminal justice system in 2014, in order to achieve the goals set by NISP. The group amongst others recommended the formation of anti-money laundering and cybercrime units in the CTD. But unfortunately, it has so far not seen the light of the day, thus hampering CTD’s capacity.

Although different entities involved in the process of counterterrorism appear to be hard at work to translate challenges into opportunities, the country is still in a catch-22 situation. The sword of FATF is hanging over the government’s head as Pakistan is struggling to come out of the grey list. The question that boggles the mind is that why we are in such a situation. While analysing the NISP 2014-2018, 2018-2022 with NAP, we find all good phrases such as analytical skills, goals and timelines. But at the implementation stage most of the officers flounder with an abysmally low outcome. All the clichés of functional specialisation used in legal lexicon and policies lose their meaning with the ultimate exposure to the weak capacity of the whole hierarchy dealing with terror financing.

Whenever the hammer of international agencies falls, the system reacts abruptly such as by hammering non-profit organisations and undertaking actions under maintenance laws. Suddenly the offices of the Deputy Commissioner, CTD, Special Branch, Industries and others spring into action in a mechanical fashion tarring all with the same brush, asking to provide information within hours in a manner akin to harassment. Usually, such ire falls on genuine non-profit organisations whereas these departments turn a blind eye to places of worship and seminaries mushrooming in close distances in even posh areas such as Hayatabad, Peshawar.

The whole situation demands not a knee jerk action but sound strategy with a core team of specialists even from outside the government. We have to understand that one of the most important elements of strategy is to examine the baseline. Having worked out the weak areas, we can then move forward by plugging the gaps and taking remedial measures. Today, the capacity of the implementing agencies such as the FIA and the CTD are weak areas. They still suffer with problems of functional specialisation having nominal specialists in comparison to the magnitude of the problem; while the heads of such departments are usually generalists with no expertise in those areas.

The need of the hour is not only to provide crash training programmes but also induct functional experts into the CTD and the FIA, who specialise in counterterrorism and cyber-crime. Moreover, a careful selection of their heads with an understanding of these issues is imperative.

Published in The Express Tribune, December 18^th, 2019.

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