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January 4, 2019

Pakistan sends Terror Financing Risk Assessment Report to FATF today

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January 4, 2019

ISLAMABAD: Pakistan has dropped its initial idea to amend the Anti-Terrorism Act (ATA) 1997 after the lapse of presidential ordinance arguing that the Ministry of Foreign Affairs could freeze assets of prescribed organizations/ individuals through a notification of SRO for complying with the UN Security Council Resolutions of 1267 and 1373.

The last PML-N-led government had promulgated a presidential ordinance to amend the ATA 1997 in February 2018 in order to freeze assets of prescribed organizations and individuals. The measure was taken to comply with 27 conditions placed by Financial Action Task Force (FATF).

Now the ministries concerned under dispensation of PTI-led regime after through deliberations finalized that there was no need to amend the ATA 1997 because Ministry of Foreign Affairs (MoFA) possessed powers to notify SRO for moving ahead with prescribed organizations and individuals to comply with UNSC resolutions of 1267 and 1373.

So the idea of amending ATA has been dropped and it will be conveyed to FATF in upcoming meeting scheduled to be held next week from January 8 to 10 at Sydney Australia. “Probably, it was a mistake or done without well-thought-out strategy because it did not benefit our Law Enforcing Agencies (LEAs) in any way,” said one top official who is dealing with FATF issues.

When former finance minister Miftah Ismail was asked about reasons behind promulgation of ordinance during their tenure, he replied that it was discussed in detail at that time and their government had taken decision to issue an ordinance for bringing more clarity with regard to blacklisting the prescribed organizations in line with UNSC resolutions and FATF requirement.

He said if the government had brought bill for amendments into ATA then the PML-N might have supported changes in the law for sake of the country. However, he was amazed that why the government was not bringing amendments into ATA 1997.

However, the sources said that Pakistan has also prepared Terror Financing Risk Assessment Report in line with the FATF conditions that would be scrutinized in face to face upcoming meeting of the FATF scheduled to be held next week at Sydney.

“We will dispatch Terror Financing Risk Assessment Report to FATF on Friday (today) that basically identifies both domestic and foreign sources of funding being utilized for execution of terrorists’ activities,” confirmed by one top official.

Pakistan’s 12 member delegation headed by Federal Secretary Finance Arif Ahmed Khan will be attending the upcoming FATF plenary meeting at Sydney.

The Financing Risk Assessment Report has found that terror financing threats in Pakistan emanate both from foreign and domestic sources. This includes predicate crimes such as cash smuggling, kidnapping for ransom, narco-trafficking, extortion, etc. Channels for TF include Hundi/Hawala, Unregistered Charities, Virtual Currencies, depending on the corresponding threats and preventive controls. Long and porous borders with Afghanistan & other neighboring countries provide key pilferage points for terrorism and terrorist financing. Terrorism is also funded externally by hostile intelligence agencies and other anti-state elements.

Regarding different levels of AML/CFT compliance, the report states that some sectors are more compliant in frameworks and procedures such as banking, NBFIs, securities, insurance, etc: others require enhancement of supervisory controls or oversight mechanisms. Terrorist Financing Threat (Medium) and Terrorist Financing Vulnerability (Medium), assesses the National Terrorist Financing risk as ‘Medium’.

The officials conceded that the last mutual evaluation was done in 2009 but required legal, procedural and enforcement was not taken care of properly that had resulted into falling into another mutual evaluation now in 2018-19. The Federal Investigation Agency (FIA) lacks capacity to tackle investigation of terror financing properly although they had done good work on account of money laundering.

“There are only few cases investigated by FIA that resulted into prosecution and penalizing on allegation of terror financing,” said the official. However, the CTDs (Counter Terrorism Departments) at provincial levels have performed well in 2018 but capacity building at both federal and provincial levels as well as better coordination is required to achieve the desired results.

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