Pakistan’s Being Taken Off Terror-Financing List Is A Challenge To India – Analysis


Pakistan’s removal from an international grey list on terrorism financing on Friday came as a boon to Islamabad, currently facing a severe financial, economic and ecological crisis. But there is no guarantee that Islamabad will stop cross-border terrorism in India because of the delisting.  

The Financial Action Task Force (FATF), which listed and delisted  Pakistan, is an independent international body. But it is undeniable that it reflects the Western democracies’ geopolitical interests. Seen in that light, the “whitelisting” of Pakistan has geopolitical dimensions. It has come at a time when India’s relations with the US, UK and Germany are under strain. The US State Department has been cozying up to Pakistan, Germany has commented adversely on India’s Kashmir policy, and the UK is undecided about going for a Free Trade Agreement with India due to differences over Indian immigration. 

And most irritatingly for India, it has come at a time when China reiterated its hostility to India by blocking UN’s listing of Pakistan-based terrorists accused of terrorist attacks in India. The fast-changing international scenario with countries pursuing “strategic autonomy” has put all countries, including India, on an edge.       

Gains for Pakistan

The decision to take Pakistan off the terror financing list boosts it’s reputation. The President of the Financial Action Task Force (FATF), T. Raja Kumar, told a news conference in Paris: “After a lot of work by the Pakistani authorities, they have worked through two separate action plans and completed a combined 34 action items to address deficiencies in their anti-money laundering and counter-terrorist financing systems.” 

Kumar said a FATF team had visited Pakistan in September and was satisfied with the implementation of the program. However, he cautioned that Pakistan needed to further strengthen its monitoring mechanisms. Pakistan had been listed in 2018 because of “strategic counter-terrorist financing-related deficiencies”.

Reacting to the delisting, Pakistan Prime Minister Shehbaz Sharif tweeted: “Pakistan exiting the FATF grey list is a vindication of our determined and sustained efforts over the years.” The Minister of State for Foreign Affairs, Hina Rabbani Khar, said in a statement that the FATF had fully recognized the “completion of all substantive, technical as well as procedural requirements of Pakistan’s 2018 and 2021 Action Plans.” 

“The FATF had said that Pakistan had made significant progress in improving its Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regime. It had addressed the technical deficiencies and commitments of its Action Plans comprising of total 34 action items. Pakistan completed the 2021 Action Plan in advance of the deadlines. Pakistan is no longer subject to the FATF’s increased monitoring process, which means, Pakistan has been whitelisted by FATF,” Khar said. She added that Pakistan would “continue to work with APG to further improve its AML/CFT system.”

On the economic impact of the delisting, Khar said: “Pakistan is now in a position where we can not only sustain the trajectory of these reforms without any international monitoring or pressure but can also share our expertise and resources with our countries in our region and beyond.”

Significantly, Khar added that “if there is one lesson that we should take as a country from the last four years is to build on this momentum of reform and not allow the gains to be reversed. We need to sustain the efforts for our own benefit and for the growth and development of our country. In fact, we must now become a role model for the world. I have already directed my team to start exploring ways in which we can enhance our cooperation and partnership with FATF and the wider international community, especially on the issue of Anti Money Laundering and Countering Financing of Terrorism (AML/CFT).”

Is India Guaranteed to Benefit?

While Khar’s statements are encouraging in an important way, there are doubts about their relevance for Pakistan’s India’s policy. Does listing by FATF guarantee that Pakistan will stop sponsoring terrorism in Kashmir and in other parts of India?  Would domestic pressures to keep the pressure on India be resisted in the light of the fact that anti-Indianism has been the staple diet of Pakistani politicians across the political spectrum?

And then there is the elephant in the room – China. Will Beijing, which keeps India on edge needling it whenever an opportunity arises, stop helping Pakistan keep up its anti-Indian tempo? 

Earlier this week, for the fourth time in four months, China blocked the listing of Pakistan-based terrorists under the 1267 Al Qaeda Sanctions Committee regime. Beijing blocked Indo-US proposals to blacklist Pakistan-based terrorists Talha Saeed (terrorist Hafiz Saeed’s son) and Shahid Mehmood, deputy chief of the Lashkar e Toiba (LeT) front Falah I Insaniyat Foundation (FIF). Talha and Shahid are accused of raising funds for recruitment to the LeT Jamaat ud Dawa (JUD) which masterminded the 26/11 Mumbai attacks. 

In 2016 the US Department of Treasury had designated Shahid Mehmood (Mahmood) and Muhammad Sarwar as Specially Designated Global Terrorists (SDGTs). Shahid Mehmood was in charge of the group’s operations in Myanmar, Bangladesh, Syria, Turkey and Gaza, the US charged.

The Hindu noted that China had blocked the listing at a time when the UN Secretary-General Antonio Guterres visited the memorial site for the 26/11 attacks in Mumbai and called for “global cooperation” on terror. The paper further noted that India will be hosting all members of the Counter-Terrorism Committee (CTC) of the UNSC, including China’s UN Ambassador, in Mumbai, where they will visit the 26/11 memorial. 

The paper further said that since June, China had blocked other Indo-US proposals for listings, such as those of Lashkar-e-Taiba Deputy Chief Abdur Rahman Makki and 26/11 terrorist handler Sajid Mir as well as Jaish-e-Mohammad Deputy Rauf Asghar. 

In all these cases, Beijing had said it needed  “time” to study the details of the listing, and had refused to allow the designations to proceed in the absence of “sufficient evidence”. 

On India’s response, The Hindu quoted External Affairs Minister S. Jaishankar as saying at the UNSC in September: “If egregious attacks committed in broad daylight are left unpunished, this council must reflect on the signals we are sending on impunity. There must be consistency if we are to ensure credibility.”

P. K. Balachandran

P. K. Balachandran is a senior Indian journalist working in Sri Lanka for local and international media and has been writing on South Asian issues for the past 21 years.

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