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FATF’s Soft-Pedaling Is Emboldening Pakistan – OpEd

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Pakistani Prime Minister Imran Khan’s admission that “when you talk about militant groups, we still have about 30,000-40,000-armed people who have been trained and fought in some part of Afghanistan or Kashmir,” once again proves that Pakistan remains the most favoured sanctuary for terrorist groups involved in cross border terrorism. Accordingly, Pakistan being grey listed by international money laundering and terrorism financing watchdog Financial Action Task Force [FATF], Pakistan in June 2018 and remaining there for more than two and a half years comes as no big surprise. 

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However, rather than taking corrective measures to curb terror financing, Islamabad has [as is its wont], been blaming New Delhi for its grey listing by FATF without furnishing any credible evidence to substantiate this bizarre allegation, which expectedly haven’t cut any ice with the international community. Yet Islamabad is still happy since this preposterous assertion has found traction with its citizens indoctrinated into believing that India is an existential enemy responsible for all problems plaguing Pakistan. As such allegations work wonders when it comes to diverting public attention from the government’s own failings, they are used frequently.

While Pakistan has been maintaining that it has been working assiduously to comply with FAFT action plans, its performance on this account is far from satisfactory. Last year, when it was retained on FATF’s grey list for not fully complying with two action plans, ministers and government officials assured the people that Pakistan would be able to resolve the outstanding issues in no time and thus certainly exit FATF’s grey list in its next meeting scheduled in February this year. However, certain developments since the last FATF plenary concluded do not present a very optimistic picture.

For one, while Islamabad hurriedly convicted and jailed senior members of Lashkar-e-Taiba [LeT], a designated terrorist group proscribed by UNSC just before the 2021 FATF meeting, curiously, three key LeT operatives were acquitted soon after Pakistan’s continuation in FATF’s grey list was confirmed. Secondly, with a Pakistani court issuing an arrest warrant against Jaish-e-Mohammad [JeM] chief and a UNSC designated terrorist Masood Azhar, Pakistan army’s brazen attempt to protect this ‘strategic asset’ by falsely claiming that he wasn’t present in Pakistan has badly backfired!

Just a few days ago, US Federal Reserve Board [FSB] and the New York’s Department of Financial Services [NYDFS] imposed a whopping $ 55 million penalty on the New York branch of National Bank of Pakistan [NBP] for blatantly violating international anti-money laundering laws that could be easily exploited by terrorist groups. Islamabad’s willingness to “resolve the matters described herein [in the ‘Consent Order’] without further proceedings,” is a univocal acceptance of its intentional complicity in facilitating money laundering activities. 

The strange thing here is that this isn’t the first time that a Pakistani Bank in the US has been accused of violating anti-money laundering rules. In 2017, Pakistan’s the New York branch of Habib Bank, which is Pakistan’s largest bank was fined $ 225 million for several major lapses such as having:

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  • “Facilitated billions of dollars in transactions with a Saudi private bank, the Al Rajhi Bank, with reported links to Al Qaida, without adequate anti-money laundering and counter terrorist financing controls.”
  • “Allowed for at least 13,000 transactions that potentially omitted information adequate to properly screen for prohibited transactions with sanctioned countries.”
  • “Improperly used a ‘good guy’ list- a list of customers who supposedly presented a low risk of illicit transaction- to permit transactions by an identified terrorist, an international arms dealer, an Iranian oil tanker, and other potentially sanctioned persons and entities.”

Despite struggling desperately to keep its economy afloat, Pakistan, has readily been giving its consent to “resolve the matters [related to noncompliance of anti-money laundering laws] … without further proceedings,” and paying million of dollars as fines rather that contesting the charges levelled against it. This clearly indicates that the lapses on its part weren’t unintentional or oversight but very much premeditated and the fact that the same illegal actions occurred twice in just a matter of five years and clearly reveals a complete lack of commitment and abject irresponsibility on Pakistan’s part in curbing terror financing. 

However, Islamabad doesn’t consider it necessary to make amends, knowing fully well that it won’t be put into the dock or held answerable for sponsoring and nurturing terrorist groups that furthers Pakistan army’s ‘shadow war’ against its neighbours. Au contraire, patronising terrorist groups has turned out to be a very profitable business proposition for Islamabad.

That Rawalpindi hosted the UNSC proscribed Taliban which was fighting US led coalition forces in Afghanistan for two decades is no secret. Yet, instead of being taken to task for violating UNSC mandate and aiding America’s enemy number 1, Islamabad ended up receiving billions of dollars in aid from Washington. This is evident from former US President Donald Trump’s 2018 tweet- “The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan…”!

It’s also abundantly clear that the Pakistani military establishment had provided Al Qaida founder and 9/11 mastermind Osama bin Laden a safe sanctuary in an Abbottabad compound since being just a stone’s throw away from Pakistan Military Academy, this location was safe from prying eyes. Since Islamabad consistently claims that Pakistan army’s premier spy agency ISI is the best in the world, it’s difficult to digest the lame excuse of being unaware of Laden’s presence in Abbottabad. Yet, the international community let Pakistan get away with such barefaced falsehood and doing so, indirectly encouraging Islamabad to nurture and harbour terrorists.

Therefore, both FATF and the international community needs to be far more stringent while dealing with Pakistan because measures like imposing fines on Pakistani banks for not implementing anti-terrorism funding don’t seem to be working. Needless to say, terrorism has today acquired the status of a global pandemic due to international apathy and thus, any soft-pedalling while dealing with errant countries like Pakistan will only make the world a far more dangerous place! 

Nilesh Kunwar

Nilesh Kunwar is a retired Indian Army Officer who has served in Jammu & Kashmir, Assam, Nagaland and Manipur. He is a ‘Kashmir-Watcher,’ and now after retirement is pursuing his favorite hobby of writing for newspapers, journals and think tanks.

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