Terror financing: Pakistan races to avoid blacklisting ahead of FATF meet

Pakistan’s caretaker government is holding reviews of its new draft action plan against terror financing and money laundering to avoid being blacklisted by a global watchdog which meets later this month.

Pakistan is required to submit the action plan for review by the Financial Action Task Force (FATF) in its plenary meeting, scheduled to take place in Paris from June 24 to June 29.

The country risks being placed on the blacklist of countries that financially aid terrorism if its action plan is rejected by FATF.

The plan was reviewed just two days before the filing of comments to the observations raised by the Asia Pacific Group (APG) on money laundering, The Express Tribune reported.

A federal cabinet meeting discussed recommendations by the APG and the FATF to curb money laundering and terror financing.

The proposed action plan was then reviewed in a meeting chaired by newly appointed interim finance minister Shamshad Akhtar.

The government “will do whatever is required to make sure that Pakistan is not blacklisted,” Ali Zafar, the caretaker minister for information and law, told the Tribune.

“I am confident that Pakistan’s existing legal regime is compliant with global anti-money laundering and counter-terror financing regimes.”

Zafar said the finance ministry will require some more time for finalisation of the plan and then it will make a final presentation before the federal cabinet. He said the caretaker government will try to find solutions to all issues while remaining within the limits of the Constitution.

In a terse statement, the finance ministry only said caretaker minister for finance Shamshad Akhtar chaired a meeting to review different FATF related issues.

In February, the FATF had decided to place Pakistan on its so-called greylist of countries that do not do enough to curb terrorism financing.

It wanted Pakistan to implement 27 recommendations to show progress in four key areas of concern.

These areas related to improving supervisions of the AML and the CTF, curbing the illicit cross-border movement of currency through Chaman and Torkham, improving prosecution in AML and CTF cases, and ensuring enforcement of United Nations Security Council resolutions.

Zafar said improving prosecution and investigation in money laundering and terrorism financing cases is in the interest of Pakistan.

Pakistan had submitted its action plan with the APG that met in Bangkok last month but the body expressed its dissatisfaction on progress on the issues of actions against proscribed organisations such as Lashkar-e-Taiba, Jamaatud Dawa and Falah-e-Insaniat Foundation.

There is also pressure on Pakistan to take action against the Haqqani Network, but Islamabad’s position has remained that the Haqqani Network is based in Afghanistan.

The FATF and APG wanted Pakistan to have better supervision of the AML and the CTF regimes. In the revised plan, the authorities have tried to strengthen this area.

More than Pakistan’s action, it will be the political posture of the United States that will determine whether the FATF accepts the new plan, officials said, claiming that Pakistan has done everything in its capacity but the US-India nexus is creating trouble.

The paper quoted sources as saying Akthar also underlined the need to tackle US pressure. It was decided that China would be requested to play a more proactive role this time, as Beijing’s neutral role led to the placement of Islamabad on the greylist.

The paper said that the proposed plan has tried to address the FATF’s concerns about weak prosecution in money laundering and terrorist financing cases. Although the government will submit outcomes of the prosecutions, coordination between the provinces and the Centre in this area remains a concern.

The FATF’s fourth area of concern was the failure to criminalise the financing of individual terrorists or terrorist groups, other than proscribed organisations. The law enforcement agencies and prosecution authorities have powers to prosecute money laundering and terror financing, but they are currently not using these tools effectively.