In the grey?

The allegations that Pakistan has not acted swiftly enough against internationally designated terrorist groups could end up having dire consequences for the country. There is a significant possibility that the Financial Action Task Force might put Pakistan on its ‘grey list’ for the country’s failure to take action against UN-designated terrorists groups. This is not a new position for Pakistan to find itself in. We have been on the grey list before for three years till we enacted an anti-money laundering law. Controlling terrorist finance has been a domestic priority outlined within the Nation Action Plan (NAP), which seems to have become less and less a part of mainstream discourse. There was some talk last year about bank accounts of suspected individuals being frozen but the informal mechanisms of hawala and hundi have not been regulated as such. One must also wonder whether the Khanani and Kalia scandal has been adding to the pressure. All of this contributes to Pakistan’s rapidly dwindling reputation for financial stringency. At the moment, American concerns have been more focused around the Jamaatud Dawah and its charitable wing, the Falah-e-Insaniyat Foundation. This has in all likelihood to do with the US shift towards India, as part of the Contain China policy. Be that as it may, the fact is that such organisations have continued to operate in Pakistan unchecked until significant international pressure. It is then that Pakistan works out a way to keep a check on such elements, arresting its leaders and shutting down affiliated organisations.

But Pakistan is not fated to be stuck in the grey list. The PML-N government was earlier able to steer the country out of this status. What is needed is substantive action against these groups, more specifically the informal financing mechanisms that allow them to operate. Any action initiated now cannot be stopped if Pakistan wishes to avoid being sanctioned in Paris. There has to be a much more substantive approach to this issue of terrorist finance. Pakistan is itself one of the biggest victims of terrorism in the world, and ideally should not have to be coerced into action. But what also needs to be recognised is that fighting terrorist finance is not a simple issue. Pakistan has certainly taken some steps against but it could obviously do more. The hope now is that the financial assets of proscribed groups are seized and their structures dismantled systemically. It is the Pakistani people who will stand to gain from such action. On the other hand, any international sanction by the FATF will only add to the already existing financial difficulties the country faces. More than anything else, though, this is an issue that should be seen as one of Pakistan asserting its fiscal sovereignty against groups that essentially tarnish the country’s name.