Thursday May 23, 2024

Terror financing: clock starts ticking

By Aamir Ghauri
February 24, 2018


Pakistan’s domestic politics remains so jumpy that one hardly focuses on the storms brewing regularly on its borders or further afield. A blizzard that gathered steam in Paris from last Wednesday has just blown over without further harming Islamabad’s precarious international repute. But just.

Midmonth, Pakistan’s friend of sorts, the United States The 37-member intergovernmental watchdog also known by its French name Groupe d’Action Financiere (GAFI) - created almost three decades ago to develop policies to counter global money laundering and then terrorism financing following 9/11 – saw a hectic firefighting effort by Pakistani officials.

US tone and tenor towards Pakistan has been stiffening of late. For Washington, Pakistan was not listening to its demands to get tough with alleged terrorists and militants operating inside Afghanistan. Pakistan has been failingly trying its luck with the oft-repeated stance of doing enough and losing far too much in the process in the War on Terror. The West these days seems to listen to Pakistan’s woes – loss of men and material - sympathise for a second and then moves on with its agenda that is not selling well with Pakistan that is drifting fast towards China.

US were not listening to Pakistan’s point of view and decided to bring the United Kingdom, France and Germany to add pressure. Pakistan was seen scrambling to friends to avoid being added to a list of countries deemed non-compliant with terrorist financing regulations – something its officials fear would hurt its economy and “make it harder for foreign investors and companies to do business in the nuclear-armed South Asian nation”. Only China, Saudi Arabia and Turkey came to its rescue.

As FATF member states pondered over cases of concern, a sideshow was on in South Asia too where India was seen more interested than heavens to see Pakistan added to the “grey-list” as it would have proven their point about the country. While Pakistan’s de facto finance minister, Miftah Ismail, told international media that “we are now working with the US, UK, Germany and France for the nomination to be withdrawn,” and remained “quite hopeful that even if the US did not withdraw the nomination that we will prevail and not be put on the watch list,” Pakistan’s Home Minister Ahsan Iqbal was urging his followers on Twitter not to speculate until an organisational official statement is out. The Foreign Minister Khawaja Asif was the quickest to predict that Pakistan would get a 90-days reprieve. He, in fact, went ahead and thanked “friends who helped”. That again on Twitter.

But will the situation ease or get tougher in coming days. After all, Pakistan had been on the FATF watch list from 2012 to 2015. US officials have been critical of the conduct of their friend gone sour. They say Pakistan has been “selective” in taking strong action against militants who use its territory as operational base.

“It is time for that to stop, and so we are working with our allies, who also are affected, to see effective action against groups such as the Haqqanis and elements of the Taliban,” a US official has recently told international media.

Pakistan might have presented its case to the best of its ability – giving facts and figures of its actions, proposed plans to plug possible terror financing, on-going government action against real or imaginary money launderers but do these actions cut any ice with the West with whom Pakistan is tied very closely for funds and trade. May be not.

State Department spokeswoman Heather Nauert recently said ”the U.S. has consistently expressed our long-standing concern about on-going deficiencies in Pakistan’s implementation of its anti-money laundering/counterterrorism finance regime. In addition to broader systemic concerns, this also includes Pakistan’s non-compliance with its commitments under UN Security Council Resolution 1267.”

Resolution 1267 requires all states to freeze the assets of people and organizations on a list established by the resolution, including Hafiz Saeed and his organisation. For Washington, Saeed remains a terrorist despite his repeated denials of involvement in 2008 Mumbai attacks.

Feeling the heat being generated in Washington, London, Paris and Berlin, Pakistan announced on Monday it had amended its anti-terrorism law to ban militant groups and organizations that are listed as “terrorists” by the United Nations, a move seen by many as too little too late.

Pakistan’s attorney general, Ashtar Ausaf, also tried to explain the changes in law, by telling the international media “we have to march with the changing times.” Fact of the matter is that the West is not really ready to believe Pakistan on its half-hearted actions. Pakistan observers in western think tanks regularly say that Pakistan attempts at pleasing those objecting with cosmetic posturing when under pressure.

And that is why a comprehensive exercise is underway now in major European think tanks to study Pakistan’s actions on money laundering and its possible overlooking financial activities of militant groups. Financial experts working within or with these think tanks acknowledge that Pakistan might have put its house in order as far as formal banking sectors are concerned. But suspicions remain as to how money transfers take place through informal mechanisms.

Closed workshops, seminars with limited attendance and specialised visits are happening on weekly basis where western experts on financial crimes sit and discuss if Pakistan and its financial probity works and delivers vis-à-vis questionable groups like Jamaat-ud-Dawa etc. Pakistani experts are routinely invited to participate in these exercises. Former politicians, government officials, academics and financial experts from Pakistan are being contacted to share their knowledge and information on the subject.

90 days will pass pretty quickly. While the government can run from one political crisis to the next, those pushing for and supporting mainstreaming of the proscribed organisations and former assets need to understand that times and space is changing very fast around Pakistan. Narratives listened to and tolerated in the West are no longer palatable. There is a feeling among many in the West that Pakistan’s erstwhile “assets” who were used to fight for the West might be used in future for a different client. The West is preparing fast. They say Pakistan needs to understand that its economy, trade and ties are still tied very strongly with those who are asking for honesty in action and purpose. Will Pakistan listen? We will have to wait and see.