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Sunday, May 19, 2024

The diminishing credibility of FATF

It’s about time that Pakistan adopts aggressive diplomacy and exposes India, which is a major player in money laundering. Neither Pakistan nor any other country can afford to let FATF fall into the trap of lobbyists and other interest groups. Pakistan should continue to follow a two-pronged approach, one to expose the politicization of FATF at every international forum

The virtual plenary conference of the Financial Action Task Force (FATF) was held in Paris from 1-4 Mar 2022. With just two unmet targets out of 34 action points, FATF has retained Pakistan on its terrorism-financing “Grey List” and asked the country to address the remaining deficiencies in its financial system as soon as possible. Pakistan has been on FATF’s grey list, also known as the list of ‘jurisdictions’ under increased monitoring since June 2018. Although FATF was merely a technical institution aimed at fighting money laundering, its Pakistan-specific unjust actions clearly suggest that the FATF has become a political instrument. It’s no more a secret that India along with its lobbies has been exerting massive influence over FATF member states.

In June 2018, after FATF placed Pakistan on the grey list, Pakistan made an unwavering resolve by making a high-level political commitment to work with FATF and its Asia/ Pacific Group (APG) to strengthen its anti-money laundering and combat the financing of terrorism (AML/CFT) regime.

Read more: Pakistan completes all 27 items in FATF 2018 action plan: sources

Understanding the matter better

The initial action plan comprised 27 action items, out of which Pakistan had addressed 26, by Oct 2021, when FATF’s last plenary was held. However, FATF, in June 2021, gave an additional action plan to Pakistan consisting of seven items focused on dealing with money laundering. Therefore, there were 34 items in the two action plans assigned to Pakistan, 30 of which had been complied with by Oct 2021, and the remaining were fulfilled before the onset of the plenary session conducted from 1 – 4 Mar 2022.

In the fourth Plenary of the FATF held on 21 June 2021, FATF had refused to take Pakistan out of the ‘Grey List’ even after a stout and amenable compliance by Pakistan which was acknowledged by the President of the watchdog himself. Pakistan has taken solid steps to curb money laundering and terror financing, which left no justification to keep Pakistan on the grey list.

“In the context of FATF, we have faithfully complied with and completed all technical requirements and hope that the outcome would be in the positive direction,”

Foreign Office Spokesman Asim Iftikhar (19 Feb, 2022)

The alibi in support to the terrorism accusation against Pakistan firstly came from India which by then was perpetrating atrocities not only on Kashmiris but also on the Indian minorities, particularly Muslims and Christians. The BJP-government’s crackdown against dissenting voices, rapidly declining democratic norms, and rise of Hindutva terrorism is yet to be condemned globally. The brutal RSS-BJP nexus has further divided India into communal lines. There are almost twenty-two pro-independence movements including seventeen active ones in India at present.

India’s Permanent Representative to the UN Ambassador Tirumurti, while giving the opening remarks during the high-level side event of UN, “International Countering Financing of Terrorism in the Post COVID-19 Landscape” blamed Pakistan of harboring and supporting terrorists, claimed that India is a victim of cross border terrorism over the last several decades. These narratives are being developed as a strategy by Indian officials to diminish the credibility of Pakistan’s anti-money laundering measures at an international forum.

Read more: Khan govt was about to get out of FATF due to this reason

On the contrary, it is India, that has been siphoning money to terrorists through Afghanistan and other countries against Pakistan. The latest UN report links Indian connection with ‘Daesh’ and involvement in terrorist attacks at Karachi Stock Exchange, the Chinese Consulate at Karachi, Jalalabad and even in Stockholm.

Is FATF biased towards Pakistan?

Despite the solid evidence of money laundering and terror financing, India still enjoys the status of a responsible country. The involvement of Indian banks in money laundering and terror financing was recently exposed at the highest level, when on 27 Sep 2020 a report by the U.S. Treasury Department’s Top Secret Files Financial Crimes Enforcement Network (FinCEN), revealed, “Involvement of Indian banks, including state-owned banks, like the State Bank of India in money laundering, through transactions designed to facilitate and finance acts of terrorism. These state-owned entities and Indian nationals were involved in laundering $1.53 billion through 3,201 illegal and suspicious transactions between 2011 and 2017.”

26th Report of the UN Analytical and Monitoring Team had disclosed presence of terrorist groups in Kerala, Karnataka and Asaam. Under Modi’s watch, India has not only become a hub of terrorist organizations like Daish/ISIS but it has become a new home for global nuclear black market. In mid-2021 two events occurred consecutively, 7.1 kg of highly radioactive enriched uranium worth $2.9 Mn seized in Maharashtra, and 6 kg uranium seized in Jharkhand, which triggered serious concerns globally. Two nuclear theft incidents in one month are worrisome which shows India’s involvement in illicit nuclear proliferation activities. Moreover, in a recent report, it has been mentioned that two Indians were arrested in Nepal’s Kathmandu for possessing uranium, which was brought from India with the intention of selling illegally in Nepal.

However, in response to the question about uranium theft in India, President FATF acknowledged that he was aware of the media reports about the incidents yet refused to comment. This shows that FATF and other monetary observatory groups have turned a blind eye to the Indian illicit nuclear trafficking while setting the financial traps for Pakistan.

Read more: How FATF is being used as a tool for global elites?

The way forward

From its selective targeting, it appears that FATF has now become a geopolitical tool beyond a reasonable doubt. Rather than keeping a check on financial laundering, it is being used for strategic arm twisting. The institution has become even more hostile towards Pakistan. Despite the fact, that Pakistan’s legal, regulatory, and financial frameworks are much more robust than other countries even those which are not on the list, the group’s anti-Pak agenda on the behest of India is worrisome. The watchdog is being used as an instrument against Pakistan to yield the political demands of the West.

In the latest account The Royal United Services Institute (RUSI) has also acknowledged that the FATF is politically oriented and acts as a leverage for the U.S. Ironically, these countries which lecture others not only provide safe havens to culprits and money-launderers but also offer safe havens to the money looted from developing world. In the recent plenary meeting of FATF, held on 4 Mar 22, it was observed that Pakistan has shown huge progress in completing the actions designated in the previous meetings. Even though this observation was put-up in the latest meeting, Pakistan has yet again been kept in the ‘Grey List’.

Read more: Understanding FATF politics against Pakistan

Pakistan should continue to follow a two-pronged approach, one to expose the politicization of FATF at every international forum and secondly, to invoke like-minded countries to push the case of Indian Financial terror-sponsoring in FATF. It’s about time that Pakistan adopts aggressive diplomacy and exposes India, which is a major player in money laundering. Neither Pakistan nor any other country can afford to let FATF fall in the trap of lobbyists and other interest groups.


The writer is working as Research Associate at Strategic Vision Institute, Islamabad. The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.