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EFSAS Commentary

Any leniency towards Pakistan by the FATF will have damaging and long lasting consequences


It is once again that time of the year, one that has been coming around like clockwork twice a year for the last three, when Pakistani officials find themselves scurrying to dig out some evidence, any evidence at all no matter how sketchy, that can even vaguely indicate to the Financial Action Task Force (FAFT) that the country is indeed making efforts to abandon its long-running and highly destructive policy of sponsoring and funding terrorism. As humiliating as standing before an international grouping where it is charged of terror funding and money laundering may be, the period of waiting with bated breath to learn whether Pakistan will this time around be rid of its branding as a promoter of terror must certainly be even more degrading. This is more so when every six months it eventually transpires that the waiting has been thoroughly in vain. It is hardly likely to be any different at the ongoing FATF plenary that got underway this week and is slated to conclude today.

Pakistan had been placed on FATF’s grey list in June 2018, and it has remained on the list ever since. The International Cooperation Review Group (ICRG) of the FATF has finalized its preliminary report on Pakistan’s performance on the 27-point action plan to curtail money laundering and terror financing that the country was required to fully comply with by the end of 2019. Successive six-monthly reviews by the FATF found various deficiencies in Pakistan’s adherence to and implementation of the action plan, and the country has continued to be under close scrutiny and pressure ever since. After the last review in February this year, FATF President Dr. Marcus Pleyer had observed some serious flaws in mechanisms to plug terrorism financing in Pakistan. The FATF had then reminded Pakistan that all action plan deadlines had expired, and it had strongly urged Pakistan to complete its full action plan before June 2021.

For the FATF plenary that is currently ongoing, Pakistan’s performance was reviewed last week at a virtual meeting of the ICRG’s observer group, which includes the United States (US), the United Kingdom (UK), China, France, and India. The ICRG’s report was to be presented at the FATF’s plenary that is being held from 21 to 25 June. Delegates representing 205 members of the Global Network and observer organizations including the International Monetary Fund (IMF), the United Nations (UN) and the Egmont Group of Financial Intelligence Units (EGFIU) will take part in the virtual meetings of the FATF plenary. The plenary will decide whether to retain Pakistan on the grey list, downgrade it to the black list, or remove it from the listing.

Early indications are that Pakistan will be retained on the grey list for the next six months and be asked to fulfill its obligations to the FATF action plan in full. Earlier this month, the Asia Pacific Group (APG) on money laundering, a regional affiliate of the FATF, had retained Pakistan on an enhanced follow-up status due to its non-fulfillment of outstanding requirements. The APG had on 4 June released a second Follow up Report (FUR) on the Mutual Evaluation of Pakistan on the compliance of 40 technical recommendations. Pakistani daily Dawn reported that Pakistan is now fully ‘compliant’ with only seven technical recommendations and ‘largely compliant’ with 24 others. The country is ‘partially compliant’ with seven recommendations and ‘non-compliant’ with two out of the 40 recommendations. Islamabad will, therefore, be required to report the nation’s progress to strengthen its implementation of anti-money laundering and combating terror financing measures. The APG noted in a statement that “Pakistan will move from enhanced (expedited) to enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of anti-money laundering and combating financing terror (AML/CFT) measures”. This means that the prospects of Pakistan finding a way out of the grey list at the FATF plenary remained dim.

The Pakistani government, meanwhile, seems to be hoping against hope that the sins, and the blood, of its unrelenting policy of sponsoring terror will somehow be miraculously washed away at the plenary. Foreign Minister Shah Mahmood Qureshi sought to pin the blame of the FATF action against the country to past Pakistani governments, and seemed to suggest (despite reports that indicate the contrary appearing regularly) that his government had ditched the country’s traditional terror-friendly ways. Holding the previous Pakistan Muslim League – Nawaz (PML-N) government responsible for the tough conditions set for Pakistan by the FATF, Qureshi added that no previous Pakistani government had taken steps to curb money laundering and terrorist financing. He said on 22 June that “When PTI (Pakistan Tehreek-i-Insaf) came to power, Pakistan had already gone into the (FAFT) grey list”, and that “The gift of the grey list was also given by the PML-N”. He argued that there no longer was any justification for keeping Pakistan on the grey list as the country had fulfilled most of the action items of the FATF.

Qureshi, while making these comments, seemed to totally ignore the steady stream of information that has regularly been appearing in various sections of the media that point to Pakistan’s continued involvement in supporting terrorist activities in its neighbourhood. The local Aswaka News agency in Afghanistan reported on 22 June, the same day that Qureshi made his high-sounding comments on the FATF action, that the Afghan intelligence agency the National Directorate of Security (NDS) had arrested a Pakistan Army official who had been sent to Paktia province of Afghanistan by the Pakistani forces to fight alongside the Taliban and conduct “destructive activities” in the country. The official, who was identified as Azim Akhtar, admitted after his arrest in Dand Aw Patan district that he had been fighting alongside the Taliban as the group launched an offensive to coincide with the withdrawal of foreign troops from the country. He also disclosed that he had been told by his superiors in the Pakistan Army that there were other Pakistan Army officials in Afghanistan who were fighting alongside the Taliban.

A few days prior to this, reports in the Indian media had asserted that militants from Pakistan, including a Pakistani national, had been involved in a terrorist attack at Sopore in Jammu and Kashmir (J&K) in which two policemen and two civilians had been killed, and several others injured.

Importantly, Qureshi himself seemed to adopt a rather terrorist-friendly position when he was asked in a recent interview with an Afghan media channel whether he agreed with Prime Minister Imran Khan’s statement, made in the hallowed halls of the Pakistani parliament, that Osama Bin Laden was a martyr. While claiming that Khan had been quoted out of context, Qureshi, when asked pointedly whether “Osama Bin Laden was a martyr, do you disagree?” refused to term Bin Laden a terrorist. He seemed to suggest that he too held the same image of Bin Laden as his Prime Minister when he fumbled and responded with “I will let that pass”. It says a lot about the outlook and the attitude of a country towards terrorism when the top leadership of the country harbors and publicly articulates such reverential feelings towards probably the most dangerous terrorist of our times.

Participants at the FATF plenary, while assessing Pakistan’s case, should be well aware that the terrorist threat from Pakistan has not abated, and that this is true not only for the South Asian region but for far further afield – from Europe to the Americas. Even if they were not aware till a few days ago, it is unlikely that the well researched and informative recent documentary aired by German broadcaster Deutsche Welle (DW), which underlined the threat that continued to be posed to Europe by Pakistani terrorists, would have escaped their attention. Nor would the detailed report titled ‘Pakistani Jihadis and Global Jihad’ of the French Centre d'analyse du terrorisme (Centre for Analysis of Terrorism - CAT), which was released on 18 June.

The DW documentary is a veritable expose on Pakistan's expansive terror network, and its investigations aimed at unearthing the financing, planning and commissioning of terror attacks in Europe more often than not led to Pakistan. These leads eventually ended up at the doorsteps of the Inter-Services Intelligence (ISI), the benefactor of most of the terrorist groups that operate out of the region.

The documentary focused on Muhammad Ghani Usman, a Pakistani national who had been involved in the planning of the 2008 Mumbai terror attack and the 2015 Paris terrorist assault. He is currently in a French jail after being detained in Europe while attempting to carry out more attacks. The cases of David Coleman Headley and Sajid Mir, both ISI operatives who plotted terrorist attacks abroad, including the 2008 Mumbai terror attack, and had infiltrated indoctrinated and trained terrorists to the West, were also highlighted. The role of the support structures for terrorist inductees into the West that their Pakistani handlers such as Mir had set up was dwelt upon. On Sajid Mir, who carries a $5 million reward on his head, the documentary quoted Jean-Louis Bruguiere, a former French investigative judge who had investigated the ISI sponsored terrorist group the Lashkar-e-Taibah (LeT), as saying, “Suspects in the US confirm the existence of Sajid Mir and his role in recruiting and indoctrinating westerners with an aim of sending them back to Europe or the US to carry out attacks in the name of LeT”.

The CAT report focused on the dangerous synergies between regional terrorist groups in the Afghanistan-Pakistan region and the international terrorist groups such as Al Qaeda and the Islamic State of Iraq and Syria (ISIS). It dwelt on the expanding global focus of regional terrorist groups such as the LeT, Jaish-e-Mohammad (JeM), Tehrik-e-Taliban Pakistan (TTP) and Al-Qaeda in the Indian Subcontinent (AQIS). It pointed to factors such as the increasing radicalization in Pakistan that would provide these terrorist groups a ready ground for recruiting youth and the US withdrawal from Afghanistan, which is likely to witness a resurgence of the Taliban and greater coordination between Pakistan-supported groups like the LeT, JeM and the Taliban, as matters of immediate and serious concern.

The CAT report brought the FATF directly into the picture when it emphasized that breaking the political and financial links between Pakistan and local jihadi organizations, some working under the guise of providing social and educational services to the people, was the key to weakening the reach and threat of these terrorist organizations. Being under the FATF’s scanner has made it much more difficult for Islamabad to simultaneously shield those who perpetrate terror on its behalf and implement the FATF action plan. Even if all Pakistan does before every FATF meeting is to undertake cosmetic exercises such as arresting a few terrorists in an effort to assuage the watchdog and buy itself more time, the fact of the matter is that the pressure that Pakistan experiences due to FATF’s scrutiny and the economic consequences of grey listing such as curtailed access to finances in the form of investments and aid from international bodies, including the IMF, is significant. This does have the effect of making Pakistan at least pretend to be acting against terror, and it prevents its terrorist proxies from acting as blatantly as they would had the FATF action not been in place.

DW and CAT have felt the need to highlight the terrorist threats posed by Pakistan to the West even at a juncture when Pakistan ought to be constrained by the FATF noose hanging over its head; it is frightening to imagine the sort of gory tales they may need to tell if the noose is lifted.