Pakistan avoids anti-terror unit's blacklist for now

Status affects raising money

Imran Kahn
Imran Kahn

ISLAMABAD -- While Pakistan escaped blacklist status and international sanctions from a top international anti-terrorism monitoring group on Friday, it received a harsh rebuke from the body for failing to adequately crack down on terrorism financing and money laundering.

The monitoring group, the Paris-based Financial Action Task Force, said Pakistan would remain on a gray list, signaling its failure to fully comply with a 27-point action plan the watchdog gave it earlier this year.

But Pakistan could still be blacklisted in February when task force members next meet. The country was placed on the task force's gray list last year, which has made it more expensive for the government to raise money on the international bond market at a time when Pakistan's debt crisis is weighing heavily on the economy.

Pakistani government officials portrayed the country's exclusion from the blacklist as an acknowledgment of Prime Minister Imran Khan's seriousness to move against militant groups. Some of those groups have long been believed to have been nurtured by the Pakistani security forces as tools to achieve the country's foreign policy objectives, to counter India and to maintain its influence in Afghanistan. The military denies those accusations.

In a statement, the Financial Action Task Force expressed "serious concerns" about what it called the lack of progress Pakistan had shown countering terrorism financing and money laundering.

"The (task force) strongly urges Pakistan to swiftly complete its full action plan by February 2020. Otherwise, should significant and sustainable progress not be made across the full range of its action plan by the next Plenary, the (task force) will take action," the statement read.

Pakistan's Ministry of Finance said it was committed to "fully implement" the task force's action plan.

Khan and the country's army chief, Gen. Qamar Javed Bajwa, have insisted in recent months that the country has changed its stance on militant networks and now views them as more of a liability than a useful strategic tool.

One Western diplomat, speaking on the condition of anonymity to discuss deliberations before the task force's decision, said that one factor helping Pakistan evade sanctions was the continuing effort by the United States to reach a peace deal with the Afghan Taliban. Pakistani cooperation is seen as crucial to that process.

Pakistani officials say they have cracked down on the militant networks that once operated with near freedom in the country. On a recent trip to Muzaffarabad, once a militant hot spot, journalists saw that several offices once used by the groups to raise money or recruit members had been closed.

But some analysts and officials in Western countries and India speculate that Pakistan may have simply moved those networks underground and told them to slow their activities.

In recent weeks, as the October deadline drew near, Pakistani officials were confident that measures taken by the government would prevent its blacklisting. Allies like China, Turkey, and Malaysia lent important support during the task force's session this week.

Last week, Abdul Hafeez Shaikh, Pakistan's de facto finance minister, vowed that the government would make more progress on the task force's action plan for the country.

"It is a big aim of the prime minister to curb money laundering. It is in our own interest to stop money laundering, not just because FATF is asking us to do so," Shaikh said at a news conference.

Now, the "effort is to come out of the gray list soon," he added.

Officials now say that all militant groups in the country have been banned, their bank accounts frozen and assets confiscated. At the same time, the central bank has been urging financial institutions in the country to be more vigilant against money laundering and terrorism financing, asking them to provide details of clients involved in the import and export business.

Last week, Pakistani officials announced that they had arrested four leaders of the militant group Jamaat-ud Dawa for financing terrorism.

Hafiz Muhammad Saeed, the founder of Jamaat-ud Dawwa and another outlawed militant group, Lashkar-e-Taiba, was arrested in July and faces several terrorism financing charges.

A Section on 10/19/2019

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