HERE we go again. This story is getting a little old now, so let’s hope there is a different ending this time round. Hafiz Saeed has been placed under house arrest, and there are indications that the two groups he leads — the Jamaatud Dawa (JuD) and the Falah-i-Insaniyat (FiF) Foundation — may be listed as “banned organisations” in the near future. This may or may not be a significant step, but the law mandates it upon the government considering both groups are listed under UN Security Council Resolution 1267.
Now we have reports that pressure is mounting on the government from the Asia Pacific Group, which works with the Financial Action Task Force (FATF), to ensure that individual countries have enough safeguards in place to prevent their financial system from being used for the purposes of terror financing. If this group officially determines that Pakistan does not have enough safeguards in place, and that its financial system poses the risk that funds connected with a terrorist group could pass through it into the international financial system, it can place the country on a black list that would so raise the costs of interacting with the global financial system that our trade, remittances, bilateral and multilateral aid and loan disbursements would all be significantly affected.
Meaning, if the reports are true, we are currently running the risk of substantial disconnection with the global economy.
This issue has been running for at least six years now. The presence in the country and the open large-scale operations of groups listed as terrorist outfits by the United States was one. The other was that the FATF wanted tax evasion listed as a money-laundering offence in the country’s code to certify that its financial system was in compliance with international best practices.
In 2011 and 2012, Pakistan briefly flirted with being blacklisted by the FATF, leading to some concern in financial circles about the ramifications. A few steps were taken in light of that threat, and the country graduated up to the ‘grey list’, meaning its financial system might pose a threat to the international financial system if certain remedial steps were not taken. The measure to bring tax evasion under the Anti Money Laundering Act found resistance in parliament, but the FATF was willing to negotiate on that since the demand was being resisted in many other countries of the world as well.
On the matter of terror financing and shutting down the operations of listed terror groups, the demand was non-negotiable.
But on the matter of terror financing, and shutting down the operations of listed terror groups and all individuals known (and named in the UN Resolution), the demand was non-negotiable. We emerged from the grey list in February 2015, but only against a commitment that action would be taken under UNSCR 1267. The matter was announced with some pride by the finance minister.
That episode had come at the end of a period of serious wrangling within the country. In late December 2014, Nacta released an amended list of banned organisations in the country, in which the JuD was “Enlisted under observation Second Schedule” since 2007. A few days later, then secretary of state John Kerry arrived in the country and, amongst other things, asked after the enforcement of UNSCR 1267 as part of the cooperation in the war on terror. Only a few days later, an amended list of banned groups was released by the interior ministry, in which a total of 11 organisations were “Enlisted under UNSCR 1267”, including FiF and JuD. They were shown as proscribed since March 2012 and Dec 2008 respectively. It appears that some earlier notifications to the effect were being acknowledged officially.
Then the list disappeared and, a few days later, Nacta’s website was taken down comprehensively. Later, a series of contradictory statements belied the fact that a tussle was under way behind the scenes around the issue. The minister of defence went on record to say that there was “no reason to ban JuD” because it was a charity group, and a few days later the Foreign Office officially confirmed that the group had been banned. Then came a series of contradictory statements from unnamed officials in the interior ministry and intelligence agencies, some claiming there was a ban while others denied it.
Days later, the JuD held a large rally in Karachi, which was addressed by Hafiz Saeed himself, where he mocked the idea of a ban on his group and announced the commencement of an ambulance service for the city.
That was the background to the removal of Pakistan from the FATF’s ‘grey list’ that came the following month. And the matter went to the back burner for a few months.
Later in 2016, we began hearing reports of renewed pressure coming on Pakistan to move against the groups and individuals listed in UN Resolution 1267. Once again, the open mention of this controversy in a report carried by this paper sparked a furore and angry denials from all. But now, we’re seeing more reports, anonymously sourced for the moment, about renewed pressure to act against these groups followed by the move to place Hafiz Saeed under house arrest.
So what exactly is going on? Clearly this is one of the several proverbial ‘third rails’ of Pakistani politics. The stakes on either side are extremely high. On more than one occasion since 2010, the country has come to the very brink of a potential rupture with the international financial system on account of its failure to come into compliance with UNSCR 1267. In each case, a few partial steps have sufficed to pull things back from the brink.
But this time, reports are saying that the new presidential administration in Washington, DC may see things differently. How far does Pakistan really want to go in allowing groups and individuals listed as terrorists by the United States to roam and operate freely and organise rallies on its soil?
The writer is a member of staff.
Published in Dawn February 2nd, 2017