Authorities deregister thousands of NGOs in bid to fulfill FATF requirements

PESHAWAR -- Khyber Pakhtunkhwa (KP) authorities deregistered 3,851 of a total of 5,931 non-government organisations (NGOs) from April to July for failing to provide their funding and project details as part of an effort to meet the requirements of the Financial Action Task Force (FATF).

The Paris-based inter-governmental organisation in June 2018 placed Pakistan on its so-called grey list for failing to take action against money laundering and terror financing.

It extended a deadline for Islamabad to complete an action plan aimed at meeting the FATF's requirements to September.

"We are actively working on the FATF's guidelines to plug sources of funding of groups involved in terrorism," KP Minister for Social Welfare Hisham Inamullah Khan said on August 30.

"We asked in July for the deregistered organisations to provide complete details about their donations and expenditures if they want to be registered again," he said.

All district officers have orders to monitor all organisations working in their respective areas.

"As of now, 200 [deregistered] organisations have submitted their audited statement of accounts, which we are evaluating in collaboration with law enforcement agencies," Hisham said.

"Last year, we cancelled the registration of 41 NGOs for lack of account reports as it was a continuous exercise," he said.

District officials have recommended that the provincial government cancel the registration of nine NGOs as they failed to present their sources of funding and expenditures, said Gul Shad Khan, as assistant social welfare officer in Dir.

"We are collecting information regarding the activities of NGOs involved in getting public donations for education, health, women's development and other programmes at the community level... some of them spent the funds to finance acts of terror," he said.

Authorities in Mardan have told 17 suspected NGOs that they are monitoring the NGOs' activities, a social welfare officer said on condition of anonymity.

"We already banned 11 NGOs last year. They were attached to groups blacklisted by the UN [United Nations], we found them to be engaged in terror financing or money laundering," he said.

"Our staff is working in collaboration with the police and administration departments to probe the outfits working in all districts," he added.

New measures

KP is the not the only province regulating charities.

Last May in Sindh, authorities cancelled 3,773 out of 8,529 NGO registrations and asked the NGOs to re-apply after completing the legal formalities in line with FATF's recommendations, said Sindh Information Minister Nasir Hussain Shah.

In addition, 1,200 more NGOs are under scrutiny, he added.

"We are on our way to implementing the FATF's recommendations, which required probing the assets of NGOs to prevent terror financing," he said.

The latest work to regulate charities comes as the federal government tightens laws to prevent terror financing and money laundering.

On August 10, the National Assembly's Standing Committee on Finance & Revenue approved the Anti-Money Laundering (Second Amendment) bill.

The amendment raises the fine for individuals involved in money laundering from Rs. 5 million ($30,000) to Rs. 25 million ($150,000) and up to Rs. 100 million ($600,000) for companies and institutions.

It also requires all financial and non-banking financial institutions to issue suspected transaction reports and maintain records of all transactions for five years.

The federal government has issued guidelines to the provinces, said Kamran Khan Bangash, special assistant to the KP chief minister.

"The government first distributed a nine-page form to NGOs working in the province to produce detailed information of their affairs. When the administration of NGOs didn't submit the form... the government placed advertisements in local newspapers about the form submission for the information of all such NGOs," he said.

The information sought by the government from NGOs includes registration certificates, rules and regulations, annual action plans and a five-year strategic plan, detailed annual budgets, tax registration certificates, tax exemption certificates, tax returns of the last three years, evidence of withholding taxes, and annual performance reports for three years, Bangash said.

Such prompt measures taken by the government are aimed at avoiding the FATF's blacklist, said Muhammad Rafiq, who teaches international relations at a private university in Peshawar.

"Pakistan may face serious economic repercussions if it fails to satisfy the FATF," he added.

During the past few months, Pakistan has arrested scores of terror suspects and seized hundreds of properties linked to banned groups, said Noor Jamal, a political scientist at Bacha Khan University Charsadda.

"It is a good step that the government is checking the activities of charity groups at the grass-roots level, he said, adding that such organisations exploit the religious sentiments of illiterate villagers to extract donations in the name of Islam.