Prime Minister Imran Khan, already facing a mounting challenge to his leadership by a joint coalition of 11 opposition parties, could find his problem matrix getting far more complicated later this when the Financial Action Task Force (FATF) takes a hard look at Pakistan’s track record to stop terror. The global anti-terror financing watchdog is expected to conclude that Islamabad should be kept in the grey list with a new set of compliances based on the October 2019 mutual evaluation report (MEP). The mutual evaluation report is done on member countries after every eight years.
According to diplomats based in Paris and counter-terror experts, the FATF plenary, which is going to hold its virtual meeting on 21-23 October, is likely to prepare a new action plan for Pakistan based on the October 2019 MEP and add points not compiled by Islamabad for the previous 27-point action plan.
While Islamabad routinely blames India for politicising FATF, fact is that Pakistan based terror groups such as Jaish-e-Mohammed (JeM) and Lashkar-e-Tayyiba (LeT) are constantly targeting innocent civilians and security forces in the union territory of Jammu and Kashmir. JeM’s Kasim Jan, one of the key accused in the 2016 Pathankot airbase attack, is still the principal handler of terror attacks in Jammu and Kashmir with sleeper cells all over India. Proscribed LeT’s co-founder Hafiz Saeed’s son Talha is active in planning and executing terror action against India with impunity.
Pakistan watchers believe that PM Imran Khan may try to leverage its influence over both Taliban and Haqqani Network to negotiate for a ceasefire in Afghanistan and attempt to buy some relief at the FATF. Already, US President Donald Trump has announced that US troops will return from Afghanistan before Christmas this year.
However, this is easier said than done since the FATF’s mutual evaluation report 2019 says that Pakistan faces significant money laundering and terror financing risks. “A number of terrorist outfits, including UN-listed groups, operate in Pakistan all of which raise funds through a variety of means including direct support, public fundraising, abuse of non-profitable organisations, and through criminal activities. Funds are moved through formal and informal (mainly hawala or hundis) channels. Pakistan’s geographical landscape and porous borders increase its vulnerability to terror financing and heightens the risks associated with cash smuggling. At the time of the last evaluation, there were 66 organizations and approximately 7,600 individuals proscribed under UNSC resolution 1373, which was passed to prevent and suppress financing of terror acts post 9/11 attacks,” the report stated.
The MEP report on Pakistan further stated : “Major money laundering crime include corruption, drug trafficking, fraud, tax evasion, smuggling, human trafficking and organized crime. Corruption is endemic across Pakistan’s economy….and connected with a range of other predicate offences….Illicit funds from predicate crimes are generally money laundered through domestic real estate, precious gems/jewellery and the financial sector. Criminal proceeds are also moved offshore via formal and informal channels.”
Even as Pakistan is still to comply with the previous 27-point action plan, the MEP 2019 presents a very grim picture of Pakistan with caustic comments about both its lead enforcement agencies as well as federal agencies for not understanding the full purport of money laundering and terror financing acts.
“Based on MEP 2019, a new assessment will be made of Pakistan and a set of tasks to be complied with by Islamabad will be prepared. Under the circumstances, it is very difficult for Pakistan to walk out of the grey list of FATF,” said a counter-terror expert in New Delhi.
The downside of Pakistan remaining in the grey list means that much needed loans for reviving a comatose economy will be very hard to come by and PM Imran Khan’s problems will be further accentuated by a united opposition, which is no longer afraid of the all powerful Pakistan Army. On Thursday, former Pak PM Nawaz Sharif, who has been a primary force in cementing the opposition, said that his problem was not with Imran Khan but his selectors (Army). FATF’s October plenary, which would likely keep Pakistan in the grey list, will just exacerbate political tensions in Islamabad.