IT is becoming an increasingly high-stakes gamble for Pakistan to continue to delay the measures needed for complying with the Financial Action Task Force regime. For years, Pakistan had not adhered to the standards of the global anti-terror financing framework aimed at preventing money laundering and terror financing. It was almost blacklisted a few years ago, but in 2015, the government managed to take just enough steps to prevent that outcome. However, since then, key challenges have been kicked down the road and left unresolved. This month, another important event is coming up, and the FATF will look for a report on whether Pakistan has taken the steps it had committed to taking in order to ensure that its financial system satisfactorily meets global requirements; the signs that are emerging at the moment indicate that it will take some doing on Pakistan’s part to pass that test. The detailed workings of the FATF are too bureaucratic for most people, but suffice it to say it is looking towards its sub-grouping, the Asia Pacific Group, to report on whether Pakistan has taken the necessary steps. At the moment, it appears that the APG will be hesitant to report that Pakistan is fully complying.

At issue is the presence in Pakistan of individuals and entities that have been specifically designated by the United Nations as terrorists, including Hafiz Saeed, Jamaatud Dawa and the

Falah-i-Insaniyat Foundation. Whereas many other steps have been taken in recent weeks, such as the State Bank requiring banks to determine whether an individual seeking a banking relationship is operating as a front man for any banned group, these measures may not be enough. In January, the government placed Hafiz Saeed under house arrest, but the FATF will want to know whether or not his ability to receive and distribute funds, either directly or through others, has been curbed altogether. The authorities in Pakistan may have their reasons for not taking greater direct action against some designated groups, but the fact of the matter is that failure to comply with the global regulatory regime has enormous ramifications for the country’s financial system. With a new administration in Washington, D.C., it cannot be left to the play of geopolitics to avoid this matter any longer. It is high time we weighed the consequences of non-compliance and took a prudent decision on an important matter.

Published in Dawn, July 3rd, 2017