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Compliance of FATF action plan

Pakistan has committed itself to an ambitious 26 points action plan spanning over a period of 15 months to avoid being blacklisted by the Financial Action Task Force (FATF). The plan envisages curbing financing of terrorist groups like Daish and Haqqani network. The FATF plenary—global international intergovernmental body to combat money laundering—has begun discussion on action plan on Tuesday. A formal announcement about Pakistan’s fate is expected on Friday. This is for the first time that all 26 actions have been published in detail.

The Plan that the International Cooperation Review group (ICRG) of Asia Pacific Group (APG) submitted to the FATF plenary which requires authorities to proactively cooperate with counterpart bilateral agencies to choke financing to Daish, AlQaeda, Jammmaatul Dawa and its affiliates. Let. Jem and the Haqqani network. A source in the minister concerned said that the plan is quite ambitious and added that the country is committed to proving to the world that it is ready to an extra mile to curb money laundering, despite its reservations that the plan is politically motivated.

Pakistan will have to deliver on the first goal by January next year and complete all the 26 actions by September, 2019, which seems to be every difficult job keeping in view of the past record of expediencies of ruling political elite. The FATF approved nomination of Pakistan for monitoring under ICRG is commonly known as grey list. If the FATF formally endorses, it will formally announce to place Pakistan on the list. In case this international watch-dog working against money laundering and terror financing rejects the proposed action plan, Pakistan will be on the FATF statement, being called black list.

The ICRG of APG has identified four key areas of concerns, including deficiencies in the supervision of Anti Money Laundering Laws (AML) and counterterrorism financing regime, cross border illicit movement of currency by terror groups, progress on terrorism financing investigation, prosecution and implementation of the United Nation security Council resolutions 1267 and 1373 for curbing terror financing. The government will have to take into account the concerns enumerated in UNSC resolutions and prove its commitment regarding slamming the doors on terror financing, curbing currency movement across the border and recommendations relating to improvement of supervision mechanism of banks and companies.

The ICRG assessment is that that Pakistan does not demonstrate cooperation between federal and provincial authorities to prosecute terrorism financing commensurate with its terrorism financing risks. The assessment also points out that Pakistan has not provided any information how best it analyse and evaluate these risks. It has also not furnished details on whether the decline in terrorist attacks has any bearing on increase or decrease in terror financing. To address thee concerns Pakistan will have to honour from January 2019 and it will identify, examine and understand both domestic and transnational terrorism financing to guide investigation investigations on them. This is an arduous job which government can hardly perform, particularly when it is fond of pursuing an ostrich policy and prefers to be in a denial mode like the PML-N leadership.

The PML-N government did not take serious the United States sponsored move in February to put Pakistan back on the grey list. The FATF decision to give a short leash of three month was misjudged as reprieve and former foreign minster Khwaja Asif tweeted imprudently on 20th February 2018.  Pakistan on watch list, proposing three months pause and asking APG for another report to consider. We are Grateful to friends who helped us out. The United State instantly repudiated his claim. Pakistan was alone in the FATF plenary meeting and was abandoned at the eleventh hour, including the trusted ones trusted ones like Saudi Arabia and the so called iron brother China. It was only Turkey that supported Pakistan.

The tweet of the foreign minister made Pakistan a laughing stock in the international community. He was also ridiculed in foreign media. A lead story in the FINANCIAL EXPRESS was published under the caption: Did Pakistan’s overzealous foreign minister Khawaja Asif put his foot in his mouth. Another English newspaper went a step. The lead story of DNA India chose a caption: Did Pakistan’s foreign minister Khawja Asif jump a gun on FATF. As if this heavy dose of humiliation was not enough. The flamboyant philosopher interior minister Ahsan Iqbal angrily reacted to FATF decision and said that US move to put Pakistan on watch list is to destroy it economically, ignoring this bitter fact that it were the ill-conceived economic polices of PML-N government that pushed the economy to the verge of collapse. It remains to be seen how the next government deals with the FATF action plan.

 

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