Will FATF Blacklist Pakistan?

With meeting of the Asia Pacific Group (APG) on Money Laundering of the Financial Action Task Force (FATF) slated to meet on September 15 there speculation, even excitement, about possibility of Pakistan being placed on FATF’s ‘Black’ list. The APG 3rd Round Mutual Evaluation Procedure were adopted by APG members on July 31, 2020, as is done every year to review and update mutual evaluation procedures to reflect experience of conducting assessments as well as changes to the FATF Universal Procedures for conducting Anti-Money Laundering (AML)/Combating Financing of Terrorism (CFT) assessment. APG has 41 member countries and nine observer countries. India is a member of the FATF consultations and the APG.

But it will take a miracle for FATF to blacklist Pakistan. This is because for avoiding blacklisting Pakistan needs only three members to support it. There are 39 full members of FATF representing most financial centers around the world including China, Malaysia and Turkey. Turkey and Malaysia are wedded to Pakistan on the Islamic plank and have been fully supporting it. China is notorious for protecting Pakistan’s terror acts. Even Beijing remains neutral to signal unhappiness over attacks against the China-Pakistan Economic Corridor (CPEC), it could simply ’buy’ required member to save Pakistan’s from blacklisting. FATF has been issuing blacklist since 2000 listing countries that FATF judges to be non-cooperative in the global fight against money laundering and terrorist financing, calling them Non-Cooperative Countries or Territories (NCCTs). As of now only Iran and North Korea are on the FATF ‘Black’ list.

Pakistan was placed on the ‘Grey List’ by the FATF in June 2018 and continues to be in that list despite having failed to comply with FATF tasks FATF to stop terror financing. Chinese propaganda to save Pakistan from being blacklisted includes that it will increase Pakistani difficulties to get financial aid from the IMF, World Bank, ADB and the European Union, further enhancing problems in the existing precarious financial situation. This is an absurd argument with Pakistan’s unabated terror financing. The US Country Report on Terrorism released on June 23, 2020 said “Pakistan allowed groups targeting Afghanistan, including the Afghan Taliban and affiliated Haqqani Network, as well as groups targeting India, including LeT and its affiliated front organizations, and Jaish-e-Mohammed to operate from its territory.”

New York-based Castellum recently revealed that over last 18 months Pakistan quietly deleted nearly 3,800 names from the Proscribed Persons List without explanation; the list in 2018 contained 7,600 names which has been reduced to 3,800 without any explanation and against international standards for “de-listings” to the financial sector immediately after taking such action. Many names removed from the terror list appear to be nicknames of designated terrorists listed on US or United Nations sanctions lists and lack of identifiers like the dates of birth makes it impossible to discern identities. 1,800 names removed from the list since March 2020 include Zaki-ur-Rehman Lakhvi – mastermind and LeT operations commander during 2008 Mumbai terror attacks.

Now with the FATF review approaching, Pakistan’s foreign ministry issued a Statutory Regulatory Order (SRO) on August 18 proscribing 88 terrorist leaders and members of terrorist groups including Zaki-ur-Rehman Lakhvi, Hafeez Saeed and Masood Azhar in compliance with the new list by the UN. This also mentions Dawood’s residential address in Karachi contradicting earlier claims that Dawood doesn’t live in Pakistan. Pakistan also issued financial sanctions against Taliban in August which is no more than a big joke. Pakistani terrorists continue to be killed in Jammu and Kashmir and report by India’s National Intelligence Agency on the 1999 Pulwama car-bomb attack killing 40 CRPF personnel has directly indicted JeM chief Masood Azhar for masterminding the attack and JeM terrorists executing it.
The list of Pakistan-sponsored terror attacks in India, Afghanistan and elsewhere is endless and will continue. But there are issues that the FATF and the world need to seriously examine, which include:

• Why should a country require only three-member support to avoid being blacklisted, why not support of one-third members?
• When North Korea was blacklisted by FATF in 2000, was it financing and sponsoring more terrorism than Pakistan? And with the terrorism record of Pakistan, why has it not been blacklisted?
• If North Korea was blacklisted because of or fear of US sanctions, will US sanction Pakistan after US troop strength is reduced to 4,500 in Afghanistan or will US keep soft-pedaling the issue?
• China has become a threat to humanity having bio-bombed the world with the Wuhan Virus. Not blacklisting Pakistan (vassal state of China) and not sanctioning Pakistan severely amounts to increasing the power and reach of Rogue China.
• A recent report reveals Islamic charities linked to Pakistani terror groups being funded by America. In January 2020, ‘InterAction’ in Pakistan received $5 million from the US and over last decade tens of millions of dollars under USAID.
• ‘Together Project’ launched in Washington DC during 2017 has five controversial Islamic charities as its core – Helping Hand for Relief & Development (HHRD), Islamic Relief (IR) USA, Zakat Foundation (ZF), American Relief Agency for the Horn of Africa (ARAHA) and United Muslim Relief (UMR) — all linked to radical groups in the Middle East and Pakistan.
• IR-USA is a branch of Islamic Relief Worldwide (IRW) which is designated a terrorist organization by UAE, Germany and Sweden being linked with Muslim Brotherhood. HHRD organizes events in Pakistan with Falah-e-Insaniat Foundation and the Milli Muslim League which respectively are charitable and political wings of Lashkar-e-Taiba.

Above raises the question are we really serious about curbing terrorism and terror financing?

Prakash Katoch

Prakash Katoch is third generation army officer hailing from Himachal Pradesh. He is former Lieutenant General from Special Forces and post-retirement has published over 2100 articles on international affairs, geopolitics, military, security, technical and topical issues besides authoring two books. He is active in seminars at both national and international levels.