Pakistan has presented a strong case before Paris meeting of global anti-terror financing watchdog, a move which might pave the way for the country to get its inclusion in the terror financing list averted, commonly known as FATF Grey List.
But a few officials attending the Paris meetings still say that the threat of grey-listing Islamabad is not over yet as the final call would come up by the end of this week.
In the last FATF Plenary and Working Group meetings in February 2018, the US, UK, France and Germany nominated Pakistan for International Cooperation Review Group (ICRG) monitoring process on account of lack of adequate implementation of terrorism-related targeted financial sanctions against Jamatud Dawa (JuD), Falah-e-Insaniyat Foundation (FIF), Lashkar-e-Taiba (LeT), lax supervision over financial institutions, inaction over the exploitation of money service businesses by terrorist groups and inadequacy of measures to detect and prevent illicit cross-border transportation of cash.
“Pakistan promises to share multiple reports with FATF authorities next year. First report would be on ‘actions against four proscribed organisations — Daesh, al-Qaeda, Taliban and Haqqani Network, second on terrorist financing activities/convictions, domestic and international cooperation on cash couriers, third would be on capacity building of investigators prosecutors judiciary, fourth would be on action against illegal money changers, and a report on cross border smuggling of currency would also presented next year,” Pakistani officials engaged with the process in Paris told The News on Monday.
Pakistan’s response further revealed that “since 2015 to 2018, the Federal Investigation Agency (FIA) has registered 1, 111 cases against suspected terror financers, seized Rs2 billion, arrested 1, 466 accused and secured 254 convictions from various courts.” This data is being shared with the Financial Action Task Force (FATF) through the Financial Monitoring Unit (FMU) this week, informed officials said. However, they require further enforcement.
The FATF authorities claimed that Pakistan failed to adequately investigate and take enforcement action against money service businesses that process transactions for terrorist groups. Despite having a legal and regulatory framework to monitor, the unlicensed money service businesses continue to operate illegally throughout Pakistan, particularly in Peshawar and Karachi, FATF stated in its reservations sent to Islamabad last month.
Pakistani delegation in its report, exclusively available with The News, also revealed that serious actions have been taken against suspected terror financers who were allegedly involved in illegal MSBs/hundi hawala and currency smuggling. The FIA, State Bank of Pakistan, FMU and other authorities would also present their detailed reports on disposal of under investigation cases on STRs/money laundering/hundi hawala and improving investigations on terrorist financing and capacity building of investigators soon. The FIA proposed it all for the task force to monitor implementation of the FATF Action Plan. Pakistani authorities also registered 481 cases under MLA and arrested 652 whereas 306 cases were under investigation and 175 cases were under trial in different courts accordingly.
Pakistan also informed the FATF delegates that authorities could not find any link of accused persons involved in suspect transactions (terror financing) with the LeT, JuD, FIF, while two cases are still being investigated by the FIA.
The FATF listed Pakistan in its public statement (black list) in 2008 and 2012 on account of weaknesses in AML/CFT framework. In 2015, Pakistan was delisted on account of fulfilment of an action plan of AML/CFT reforms. Residual monitoring in respect of actions under UNSCRs 1267 and 1373 in relation to the three entities of concern (LeT, FIF and JuD) were assigned to the Asia Pacific Group on Money Laundering (APG) — Pakistan is a member of APG. In February 2015, FATF removed Pakistan from the ICRG process on the recommendations of the onsite visit report. In June 2015, FATF referred Pakistan to APG for monitoring of the residual issues concerning implementation of UNSCR 1267 against three entities of concern viz. LeT, JuD and FIF. Pakistan has provided three progress reports to APG, i.e. in January 2016, January 2017 and January 2018, regarding action taken against three entities of concern.
In June 2010, Pakistan agreed on an action plan with FATF to address the strategic deficiencies identified by FATF ICRG relating to ATA legislation. In October 2011, action plan was unilaterally revised by ICRG and Pakistan completed its revised action plan in June 2014. As per ICRG third round procedures, in December 2014, the FATF confirmed the completion of the action plan by Pakistan.
Experts say that if Pakistan was put on “FATF Grey List” it conveys the impression that a country’s financial system is weak and effective measures are not being taken to halt money laundering or financing groups that have been banned for indulging in terrorist activities.