block their financial sources.
The United States and its allies have been engaged in what they call the ‘war on terror’ (sic) – pointlessly and unsuccessfully. After 13 years of military warfare, and spending trillions of dollars, they are finally bowing before the forces of ‘terrorism and obscurantism’.
Critics say that the war against Al-Qaeda, Taliban and Daish by the United States and its allies, is tainted with geo-political motives and no serious effort has been made till today to attack their financial lifeline.
In Pakistan many militant networks are minting enormous money in the name of religion and through organised crime. This aspect remains inadequately investigated by domestic and international intelligence agencies. Since terrorist groups have not been uprooted financially, they are wining more and more ‘sympathisers’ all over the world with money power. Strangely, their main targets are not only the US and western countries but also Pakistan, India and Iran – even financially and militarily strong China.
The fundamental questions in the fight against terrorism and its financing are:
• Where do these terrorists get so much money from?
• Why are the governments not serious in cracking down on unlawful transfer of funds?
• If banking channels are used, then why can’t the remitters and recipients be traced?
• If hawala and hundi systems are used for unlawful cross-border transfer of funds, why are persons engaged in these unlawful activities not arrested and punished?
• Who is financing these terrorist networks?
• Who provides these terrorists with sophisticated arms and military training?
Pakistan is one of the worst hit countries as far as terrorism and money laundering are concerned. There is sufficient evidence that militant groups generate huge funds through organised criminal activities and also get huge ‘donations’ from ‘sympathisers’ in and outside Pakistan. Certain laws protect illegal money, for example section 5 and 9 of Protection of Economic Reforms Act, 1992 and section 111(4) of the Income Tax Ordinance, 2001. These laws ensure unlimited flow of ‘remittances’ and dealings in foreign currencies.
In the presence of the so-called ‘protective’ (sic) economic laws cited above, the provisions of the Anti-Money Laundering Act of 2010 have rarely been invoked. In fact, it has become a dormant law. The banks are not reporting any suspicious transactions under section 7 of the Anti-Money Laundering Act, 2010 or section 67 of the Control of Narcotics Substances Act of 1997. This shows the slackness of institutions and agencies responsible for implementing these laws.
Besides the legal weaknesses pointed out above, during the last 30 years NAB, FIA, the Anti-Narcotics Force and FBR have not been able to establish a joint task force to book and prosecute individuals and networks involved in money laundering.
In the presence of numerous departments and law enforcement agencies, on a daily basis terrorist networks get millions through hundis and hawalas in addition to extortion money and proceeds of drugs-and-arms deals. Many are even getting funds through normal banking channels in benami accounts. The inadequate reporting of such transactions by banks to the Financial Monitoring Unit (FMU) established under section 6 of the Anti-Money Laundering Act, 2010 is a serious cause for concern. As a regulator, the State Bank of Pakistan has failed to enforce this law; there should be a monetary limit for banks to report all cash transactions since the expression ‘suspicious transactions’ is vague and subjective.
Determined and practical efforts are needed to destroy the financial supply lines of terrorist networks. The strategy to fight terrorism has ignored this most vital aspect and, therefore, powerful states, with all their military might and economic resources, have failed to win the war started by them in 2001.
Pakistan can eliminate terrorism by cutting the financial links of outlawed networks. This will help improve the economic lot of the poor that are exploited by militants with ‘money power’, which is their main weapon to wage a war against the state.
The writer is an advocate of the Supreme Court and visiting faculty at LUMS.
Email: ikramhuzaimaikram.com