Pakistan works to leave terror financing 'grey list'

ISLAMABAD -- Pakistan is working to comply with the requirements of the Financial Action Task Force (FATF), a global terrorism financing watchdog that placed the nation on its so-called grey list last year.

The FATF added Pakistan to its watchlist in June 2018 because of "strategic deficiencies" in its ability to counter money laundering and terror financing.

In response, the government has created a 27-point action plan to leave the list.

The FATF is set to finish reviewing the plan of Pakistan's compliance with it after its plenary and working group meetings in Paris October 13-18, Dawn reported.

Prime Minister Imran Khan on August 24 set up a 12-member FATF Co-ordination Committee to work on the agency's requirements until December 1.

The committee, headed by Minister for Economic Affairs Hammad Azhar, includes the federal secretaries of finance, foreign affairs and interior as well as regulatory officials and the directors of all institutions concerned with money laundering and terror financing.

The government is very serious about fulfilling the FATF's conditions and living in peace with the world community, said Minister of State for Parliamentary Affairs Ali Muhammad Khan.

"The National Assembly has cleared amendments in the Foreign Exchange Regulations and Anti-Money Laundering law, and we are trying to pass the amended laws as expected by the FATF prior to its meeting in Paris October 13-18," he said.

The FATF guidelines include improving inter-agency co-ordination, including between provincial and federal authorities, to combat terror financing and to take action against designated persons and entities.

Pakistan's National Counter Terrorism Authority (NACTA) recently declared two more outfits, Hizbul Ahrar and Baloch Raji Aajoi Saangar (BRAS), as proscribed organisations under the Anti-Terrorism Act, putting their members and activities under surveillance, noted Khan.

The government has taken action against proscribed organisations such as the Haqqani Network, Jamaat-ud-Dawa and other banned outfits to demonstrate to the international community that the new leadership is committed to taking whatever steps are needed to meet its international obligations, said Khan.

Work continues

"Pakistan has already banned 71 proscribed outfits and seized their accounts and infrastructure," said Hidayatur Rehman, a former police officer based in Peshawar.

However, co-ordinated efforts are required "to ensure the elimination of money laundering and put the brakes on terror financing", he said.

Since the 9/11 terrorist attacks in the United States, there has been a worldwide consensus that money transferred through non-banking channels finances terrorism, said Rehman, adding that the Paris-based FATF has been urging all countries -- including Pakistan -- to take tangible measures to stop money laundering.

The measures taken by the government so far to meet the FATF's targets on money laundering and terror financing are in its own interest as the country has witnessed aggressive terrorism over the past two decades, according to Rehman.

"We have to plug all sources of financing for terror groups to send a message very wide and clear to the world that we are sick of terrorism and want to eliminate its causes," he said.

"We have to arrest people involved in money laundering, conduct scientific investigations, conduct prosecutions and secure subsequent convictions to meet the FATF's requirement for removal from the grey list," said Peshawar-based attorney Noor Alam Khan.

"To convince the FATF, we have to accelerate the crackdown on hawala and hundi through the Federal Investigation Agency and Counter Terrorism Department (CTD)," Khan said, referring to the traditional transfer of cash across borders via middlemen.

The State Bank of Pakistan (SBP) has already frozen the assets of individuals and organisations declared by the United Nations as terrorists, and all small groups and individuals should be strictly watched, he said.

The closure of official channels for money laundering is the right step, said Peshawar-based security analyst Brig. (ret.) Mehmood Shah, referring to bank accounts and other assets.

However, the government should curtail the smuggling of money and valuables as well as narcotics through unofficial land, sea and air routes as well, said Shah.

"Fencing of the long border with Afghanistan, which is nearing completion, is a big achievement in the war against money laundering and smuggling," he said.

"Pakistan cannot afford to show laxity toward those involved in the illegal transfer of money because it has suffered economic and human losses more than any country at the hands of terrorists," Shah said.

Border management with Afghanistan and Iran is also very important, he added.