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Wednesday, July 17, 2024

FATF and its contradictory policies

Islamabad being placed in the grey list has much to do with how international lenders, as well as major powers, desired long for an agenda that is beyond the scope and limits of FATF. Islamabad will have to engage pro-actively with the global community to get off the grey list. Alongside, the politicization of FATF must stop.

After the 9/11 attacks in the United States, Financial Action Task Force (FATF) became a lynchpin institution for monitoring counter-terrorist financing and money laundering. Pakistan’s engagement with this Task Force is not new. The country faced FATF indictments from 2008 and 2012 to 2015 and 2018. In 2018, Pakistan was placed on the ‘Grey List.

Pakistan is on the horn of a dilemma and is stuck in a catch-22 situation. Despite Pakistan’s efforts to fully comply with the conditions laid down by FATF and huge diplomatic commitments, the global anti-money laundering watchdog keeps up pressure on Islamabad. Other countries get clearance after fulfilling 80 percent compliance. However, Pakistan has been pressurized for 100 percent compliance with the action plan. Despite Islamabad’s commitment to comply, perceptual enigmas prevail at times. For instance, as Pakistan’s Prime Minister Imran Khan was on a visit to Russia, the U.S. Federal Reserve Board announced $20.4 million penalties against the National Bank of Pakistan.

It is important to note that Islamabad has made great strides in implementing the FATF’s 2021 action plan by addressing four out of the seven new items. The country continues to remain on the grey list despite having sacrificed around 80,000 lives and suffering the economic loss of $150 billion after joining the U.S.-led War on Terror. All of this raises serious questions on the integrity of the watchdog. It shows that the organizations like the FATF operate at the whims of world powers. Pakistan should ‘do more’ is the mantra of the international financial regulators.

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India has also been facing issues regarding financial regulations

One gets astounded by knowing the facts that in 2016, the EU-mandated Conflict Armament Research’s report regarding weapons’-specific issues in conflict areas, stated that seven Indian companies along with others were found incorporating components used by the Islamic State (IS) to fabricate improvised explosive devices (IEDs). More importantly, the report noted that “seven Indian companies manufactured most of the detonators, detonating cord, and safety fuses documented by Conflict Armament Research (CAR) field investigation teams. Under Indian laws, transfer of this material requires a licence.” Regardless, the world’s powerful states have ignored these Indian follies along with many other incidents, which include the unearthing of a nuclear smuggling racket in India.

India has been struggling hard to shape international opinion and using every possible mean to discredit its adversaries, especially Pakistan since its inception. This was debunked recently by EU Disinfo Lab. In December 2020, the EU Disinfo Lab made revelations in its report on the “widespread Indian network of subversive activities” that vindicated Pakistan’s position and exposed its detractorsThe report tracked these operations back to a Delhi-based holding company, the Srivastava Group (SG).

EU Disinfo Lab, an independent EU-focused NGO which monitors disinformation online, revealed in the report “India Chronicles” that there is an entire network of coordinated UN-accredited NGOs that supported and propagate Indian interests and criticize Pakistan in Geneva and other multilateral forums. “It is the largest network we have exposed,” said Alexandre Alaphilippe, Executive Director of EU DisinfoLab, which undertook the investigation and published an extensive report. Such disinformation campaigns by India do not only undermine Pakistan’s image but in a broader term, lampoon the world community, international organizations and state systems.

Against the backdrop of all this, battling misinformation remains the biggest challenge for Pakistan. It ranges to a number of issues but the most important issue lies with the case of FATF. It is an open secret that India wanted to place Pakistan on the FATF’s ‘black-list’, however, it has miserably failed.  Since India joined FATF in 2011, it has been pushing hard to black-list Pakistan through fake evidence as Pakistan’s addition to the grey list has plenty to do with the geopolitics in South Asia and Asia-Pacific Region.

Read more: Ukraine crisis puts India’s balancing act under pressure!

Pakistan’s FATF woes are far more political than financial in nature

The Indian Foreign Minister’s confessional statement vindicates Pakistan’s firm stance that FATF is being influenced politically and has fallen for the negative propaganda by India against Pakistan. The Indian Foreign Minister’s statement also proves the discrimination of FATF.

Islamabad has come a long way in the past ten years: militancy has reduced, the economy has grown, and international companies are investing in the country. Pakistan has rationalised its laws to curb terrorist financing, forced banks to better implement KYC (Know Your Customer) protocols etc. There remains no doubt that FATF has become a political tool for world powers to further India’s strategic needs, especially pushing Pakistan to the wall with a sinister agenda. It is so, because of two reasons. Firstly, India is seen as the major player by the U.S. in the Asia-Pacific and the South China Sea and as a counterweight to China. Secondly, India provides a market for the Western military Industrial Complex.

This is evident from India being blessed with 16 nuclear deals. Many scholars state that these deals will help India divert nuclear fuel from its un safeguarded civil nuclear reactors towards weapons development. Islamabad being placed in the grey list has much to do with how international lenders, as well as major powers, desired long for an agenda that is beyond the scope and limits of FATF. Islamabad will have to engage pro-actively with the global community to get off the grey list. Alongside, the politicization of FATF must stop.



The writer is an M.Phil Scholar from Quaid-e-Azam University, Islamabad and a senior visiting research fellow at Strategic Vision Institute, Islamabad. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.