US moves to put Pakistan on terror-financing watchlist

Published February 14, 2018
ADVISER to the prime minister on finance Miftah Ismail says the Financial Action Task Force motion focuses on JuD chief Hafiz Saeed.
ADVISER to the prime minister on finance Miftah Ismail says the Financial Action Task Force motion focuses on JuD chief Hafiz Saeed.

ISLAMABAD: While the United States has put forward a motion to place Pakistan on a global terrorist-financing watchlist with Financial Action Task Force (FATF), the Pakistan government has started working with several member states in a bid to get the nomination withdrawn, a senior Pakistani official has confirmed.

Pakistan has been scrambling in recent months to avert being added to a list of countries deemed non-compliant with terrorist financing regulations by the FATF, a measure officials fear can hurt its economy.

A meeting of FATF member states is due to take place next week in Paris, where the organisation could adopt the motion on Pakistan.

Pakistan’s de facto finance minister, Miftah Ismail, told Reuters that the US and Britain had put forward the motion several weeks ago, and later persuaded France and Germany to co-sponsor it.

Islamabad hopes the nomination will be withdrawn as Paris meeting draws near

“We are now working with the US, the UK, Germany and France for the nomination to be withdrawn,” said Mr Ismail while speaking over phone from Europe. “We are also quite hopeful that even if the US does not withdraw the nomination, we will prevail and not be put on the watchlist.”

Pakistan was previously on the FATF watchlist from 2012 to 2015.The FATF, an intergovernmental body based in Paris that sets global standards for fighting illicit finance, had previously warned Islamabad it could be put back on the list without further efforts to crack down on the flow of funds to militants.

Pakistani officials and Western diplomats say being put on the FATF watchlist could deal a blow to Pakistan’s economy, making it harder for foreign investors and companies to do business in the country.

“If you’re put on a terror watchlist, you’re made to go through all the (extra) scrutiny,” former chief of the National Counter Terrorism Authority of Pakistan, Khawaja Khalid Farooq, told Reuters. “It can hurt the economy very badly.”

Officials also fear it would be harder and more expensive for Pakistan to borrow money from the international debt markets if it is put on the FATF monitoring list. Pakistan raised $2.5 billion at lower-than-expected rates in December.

Mr Ismail said the FATF motion focused on Hafiz Saeed, who was blamed by India for masterminding the 2008 Mumbai attacks. The move indicated the US had put forward the motion at India’s behest, he said.

However, a spokesperson from the US embassy in Islamabad said: “The US has consistently expressed our longstanding concern about ongoing deficiencies in Pakistan’s implementation of its anti-money laundering and counterterrorism finance regime.”

The US was “absolutely not” acting on behalf of India in pressing Pakistan on the issue, the spokesperson said.

“In addition to broader systemic concerns, this also concerns Pakistan’s non-compliance with its commitments under the UN Security Council Resolution 1267,” the spokesperson added.

Resolution 1267 requires all states to freeze the assets of people and organisations on a list established by the resolution, including Hafiz Saeed and his charities.

Saeed has repeatedly denied his involvement in the Mumbai attacks and says the charitable organisations he founded and controls had no ties with militants.

On Monday, Pakistan announced it had amended its anti-terrorism law to ban militant groups and organisations that are listed as “terrorists” by the United Nations, a move seen to be targeting those charities.

In December, Pakistan’s government drew up plans to seize control of Saeed’s Jamaat-ud-Dawa (JuD) and the Falah-e-Insaniat Foundation charities.

Published in Dawn, February 14th, 2018

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