Pakistan should continue to be in the FATF Grey List

The Financial Action Task Force (FATF) announced (21 October 2021)that Pakistan would continue to remain on its increased monitoring list, also known as the ‘grey list’. Pakistan has been on the grey list since June 2018 for deficiencies in its counter-terror financing and anti-money laundering regimes. The Asia Pacific Group (APG) on Money Laundering concluded last year that Pakistan had made good progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation Report. While one Recommendation was re-rated to, ‘Compliant’, the other recommendations were re-rated to ‘Largely Compliant’. That is Pakistan remained on ‘enhanced follow-up’ list and will continue to report back to the APG on progress to strengthen its implementation of Anti-Money Laundering and Counter Financing of Terrorism(AML/CFT) measures. Pakistan’s fourth progress report was due to have been submitted to the APG on 1 February 2022.

Commenting on the action plan devised in 2018 which focused on terror financing, the FATF President had said that Pakistan was still assessed to have largely addressed 26 out of 27 items.”Pakistan has taken a number of important steps but needs to further demonstrate that investigations and prosecutions are being pursued against the senior leadership of UN designated terror groups,” he said. Given this situation, Pakistan will once again present its case before the FATF when the body holds its Plenary Session in Paris from 21 February to 04 March 2022. The main effort will be to convince the FATF that it has delivered on all the high-level commitments it had made, not just in terms of tightening the domestic laws and regulations but also in terms of successfully prosecuting and punishing people involved in money laundering and terror finance.

That this process has already started is seen in a recent article (The Nation, 05 January 2022). The piece titled “Arm twisting through FATF: A case study of Pakistan” argues that FATF has been used as a cat’s paw by some countries to put some countries under their control. The allegation being that the US has arm-twisted Pakistan to do its bidding. As Pakistan refused to oblige, the US got the FATF to put Pakistan on the grey list. In a nutshell, the plea taken is that Pakistan must come out of the grey list! A similar plea was made by Shaukat Tarin, Finance Minister (11 February 2022) during a debate in the Senate, wherein he requested the FATF to remove his country from the Grey List.

The reality is however contrary to every assertion being made by Pakistan before the FATF. Not only has Pakistan not cleaned up its act on AML/CFT, but it also has no intention of doing so. Let us face it; Pakistan has blatantly lied to the FATF on the activities of proscribed organizations and entities, like the JeM and LeT. There is a simple reason for this. The issue is not that non-state actors are involved in promoting terror. The reason is simple, Pakistan’s deep state, led by the ISI and the Army, is at the forefront of carrying out illegal terrorist activities and promoting terror globally. This mission also involves money laundering, and terror finance. The Pakistani deep state uses non-state actors and criminal networks as a front to carry out their nefarious activities. This is the compelling point made by Federico Guiliani, writing for the Italy-based website Inside Out. He argues that recent events in Europe have shown how Pakistani intelligence agencies are laundering money and financing terrorism in other countries, including in the UK, France, Netherlands, Sweden, Germany, and Canada. Shortly after Pakistan was placed on the ‘Grey List’ the government announced that it had seized over PKR 1 billion from accounts linked to UN-designated terror groups. However, subsequently, it was revealed that all the seized funds had been released to the account holders, likewise for assets of designated individuals and entities.

One has to only read the latest emerging from the UK(Dawn, 28 January 2022) to know what Pakistan is up to. A British-Pakistani man, Mohammed Gohir Khan has been charged for trying to assassinate the dissident blogger, Ahmad Waqass Goraya, based in the Netherlands. According to the prosecution, the Pakistan’s ISI contacted London-based Gohir Khan, through a middleman and offered him £100,000 to kill Goraya, who has been living in Rotterdam, Netherlands since he fled Pakistan in 2017 after receiving death threats. Funds for the assassin were routed through Hawala networks using Pakistani banks and money laundering networks. Clearly, the only lot with any real interest in targeting the blogger was the Pakistani military establishment. The evidence presented in court clearly points at the intelligence agencies in Pakistan, though it does not name them, reports Inside Over.

This leads to the question of the reopening of enquiry into the death of Karima Baloch, an ardent campaigner for an independent Balochistan, whose body was found in a lake in Canada in December 2020. Threats to her life back in Pakistan had forced Baloch to flee to Canada in 2015, where she was given political asylum. From Canada, Baloch continued her fight for Balochistan’s independence, and paid for that fight with her life. It is very likely that the ISI used one of its European networks to assassinate Karima Baloch. These networks operate not only inside Pakistan but are also operated by Pakistanis settled in Europe and North America. Take for instance, the bust in France of a Pakistani network involved in money laundering and fraud using fake companies and forged documents. The French police arrested 11 Pakistani-origin men and seized over Euro 1 million in this raid.

This is one part of the larger Pakistani deep state-terrorist nexus. It is well known that the Afghan Taliban was a force nurtured, trained, and equipped by the Pakistani establishment. Equally, Pakistan is the creator of the Lashkar-e-Tayyaba, a Sunni extremist group which operates mainly in Jammu and Kashmir. The Af-Pak region is home to some 28-30 terrorist groups, several of whose known antecedents can be traced back to the ISI. Given this fact, the FATF should demand an explanation from Pakistan on the money laundering in the UK case.

The EU needs to ask the Pakistanis some tough questions because the UK case documents reveal that there were other Pakistani dissidents in continental Europe who were on a hit list. This hit list included a journalist in France as well. That is why, the FATF needs to ask some tough questions on Pakistan during the forthcoming Plenary. After all, serious questions remain as far as AML and CFT are concerned, and these must be addressed.

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