ISLAMABAD: Pakistan will develop a strategy to avoid being put on a global terror financing watchlist, the finance minister said Monday.
Members of the Financial Action Task Force (FATF), an anti-money laundering watchdog based in the French capital, voted last week to place Pakistan on its ‘grey list’ of nations which are not doing enough to combat terror financing in June.
That gives Pakistan three months to make enough changes to avoid being listed, which could hamper some foreign investment and further strain relations with Washington, where officials have put increasing pressure on Pakistan over its alleged support for militant safe havens. “We will start meeting on the issue of FATF after March 1 to see what we can do on this and what strategy we can devise,” Finance Minister Rana Afzal Khan said, adding that Pakistan has not yet received a list of actions it needs to implement.
The move, which was not announced in FATF’s statement at the close of the six-day meeting, came after members had initially been unable to reach a consensus, with Turkey, China and Saudi Arabia holding out, the diplomatic source said.
That saw Foreign Minister Khawaja Asif confidently tweet last week that Pakistan had avoided being grey-listed. But amid a flurry of diplomatic activity a second vote was held, with the US convincing Riyadh to change its vote and Beijing staying silent, the source said.
Pakistan was previously on the list from 2012 until 2015.
Two diplomatic sources in Islamabad said it was targeted again this year over its lack of action against Hafiz Saeed, the alleged mastermind of the 2008 Mumbai attacks, and his charity Jamaat-ud-Dawa (JuD).
This month Pakistan began seizing JuD assets and quietly amended its anti-terror laws to bring them in line with the UN, a move observers said was in anticipation of the FATF decision.
Rumours of the move have rattled officials and businesses across Pakistan. But there should be ‘no major impact’ to the economy, said Yaseen Anwar, the former central bank governor who helped get the country off the list three years ago.
Pakistan has brushed off concerns that economic growth will suffer because of the country’s re-inclusion on a terrorist financing watchlist, and lashed out against the United States for seeking to ’embarrass’ the nation.
Miftah Ismail, adviser on Finance, Revenue and Economic Affairs to Prime Minister Shahid Khaqan Abbasi, led Pakistan’s negotiations in Paris. According to him, Washington did not seem genuinely eager to see Pakistan boost its terrorist financing regulations and was instead bent on humiliating the country. “If the Americans were interested in working with us and improving our CTF (counter-terrorist financing) regulations, they would have taken the offer I was making them,” Ismail said. “But their idea was just to embarrass Pakistan.”
Ismail said that he urged the United States to allow Pakistan until June to fix any outstanding CTF issues and ceded ground in negotiations to strike a deal, but that the US was determined to see Pakistan suffer.
US officials say Pakistan remains weak on terrorist financing prosecutions and has not done enough to combat money-raising capabilities of charities controlled by Hafiz Saeed, whom the US has designated a terrorist.
In the run up to the FATF meeting, Pakistan sought to gain favour by seizing control of parts of Saeed’s Jamaat-ud-Dawa (JuD) and Falah-e-Insaniat Foundation (FIF) charities, which the United States terms ‘terrorist fronts’ for militant group Lashkar-e-Taiba (LeT).
Hafiz Saeed, who founded LeT in 1980s, denies orchestrating the Mumbai attacks.
Diplomats have cast doubt on whether the takeovers are long-lasting, or simply a short-term move to appease FATF member states and ease pressure on Pakistan.
Ismail said Pakistan’s law-enforcement shortcomings are often confused for lack of desire, especially at provincial level, where police officers are poorly trained when it comes to terrorist financing legislation.
“The will is there,” he added.
Ismail ruled out Pakistan’s retaliating against Washington over the FATF listing. He said the country would keep working to improve its CTF capabilities and win the confidence of Britain, Germany and France, who co-sponsored the US motion in Paris.
Pakistan hopes to be removed from the grey list in six to 12 months from June, when it will be officially placed on the watchlist, Ismail added.
Ismail said he did not foresee the FATF decision acting as a brake on Pakistan’s economy, which, with growth above 5 percent, is expanding at its fastest pace in a decade.
“I would rather not be in the list, but I don’t think it will hurt” economic growth, Ismail said, adding that ordinary Pakistanis would not see any impact from the FATF move.
He conceded, however, that being placed on the watch list did not help Pakistan’s tarnished image abroad, and “doesn’t help” with its efforts to attract more foreign direct investment, a major goal of the government.
But he urged foreign investors to look past the negative headlines, and pointed out that Pakistan’s economy grew even during the period the country was last on the watch list. From 2012-2015, exports and foreign currency reserves expanded, while its stock market shot up by more than 200 percent, he said.
“We are focused on improving our economy and overcoming this little hiccup,” he said. “We will continue on our path forward.”
Published in Daily Times, February 27th 2018.
