Diminishing credibility of FATF

by Tauqeer Abbas

Shafaqna Pakistan: Virtual plenary conference of Financial Action Task Force (FATF) was held at Paris from 20-25 June, 2021. While appreciating Pakistan for steadfast progress President FATF Dr Marcus Pleyer said, “Pakistan had completed all but one of the 27 items agreed upon in the action plan and the group, has decided to keep it under increased monitoring”. Although, the FATF was merely a technical institution aimed at fighting money laundering, but its Pakistan-specific unjust actions clearly suggest that it has become a political instrument. It’s no more a secret that India along with its lobbies have massive influence over the FATF member states.

In June 2018, after the FATF had placed Pakistan on the grey list, Pakistan made an unwavering resolve by making a high-level political commitment to work with the FATF and its Asia Pacific Group (APG) in order to strengthen its anti-money laundering & combating the financing of terrorism (AML/CFT) regime. A 27 Point Action Plan was introduced by the observing group for Pakistan to curb the financial corruption and vile fiscal transfer procedures by the end of 2019, but the deadline was extended later on due to the coronavirus pandemic. In the recent review session, the FATF has yet again refused to take Pakistan out of the ‘Grey List’ even after a stout and amenable compliance by Pakistan which was acknowledged by the president of the watchdog himself. Pakistan has taken solid steps to curb money laundering and terror financing which leaves no justification to keep Pakistan on the grey list.

The alibi in support to terrorism accusation against Pakistan firstly came from India which by then was perpetuating atrocities not only on Kashmiris but also the Indian minorities who have been suffering under a brutal regime. There are almost 22 pro-independence and seventeen active pro-independence movements in India at present. The blame, that Pakistan is supporting them was dumped on it as a strategy by India and that the money laundered is being siphoned to terrorists.

On the other side of the picture, it is India, which has been siphoning money to terrorists through Afghanistan and other countries against Pakistan. The UN latest report links Indian connection with Daesh and involvement in terrorist attacks at Karachi Stock Exchange, Chinese Consulate at Karachi, Jalalabad and even in Stockholm.

Foreign Policy Magazine on 9 Aug, 2020 has also indicated to the Indian involvement in terror sponsoring. Despite these solid evidences of money laundering and terrorism, India still enjoys the status of an untouchable country. The involvement of Indian banks in money laundering and terror financing was recently exposed at the highest level, when on 27 September, a report by the US Treasury Department’s Top Secret Files Financial Crimes Enforcement Network (FinCEN), revealed, “Involvement of Indian banks, including state-owned banks, like the State Bank of India in money laundering, through transactions designed to facilitate and finance acts of terrorism. These state owned entities and Indian nationals were involved in laundering $1.53 billion through 3,201 illegal and suspicious transactions between 2011 and 2017.”

26th Report of the UN Analytical and Monitoring Team had disclosed presence of terrorist groups in Kerala, Karnataka and Asaam. Under Modi’s watch, India has not only become a hub of terrorists organisation but it has become a new home for global nuclear black-market. In last one month, 7.1kg of highly radioactive enriched uranium worth $2.9 million seized in Maharshtra, and 6kg uranium seized in Jharkhand triggered serious concerns globally. Two nuclear theft incidents in one month is worrisome which shows India’s involvement in illicit nuclear proliferation activities. However, in response to the question about uranium theft in India, President FATF acknowledged that he was aware of the media reports about the incidents yet refused to comment. This shows that the FATF and other monetary observatory groups have turned a blind eye to the Indian illicit nuclear trafficking while setting the financial traps for Pakistan.

The adverse economic effects of grey-listing are increasingly evident and have an impact on foreign direct investment (FDI) and ease of doing business whereas hostile states have also used gray-listing to damage Pakistan’s reputation as a responsible member of the international community.

The FATF has now become a geo-political tool. Rather a check on financial laundering, it is used for strategic arm twisting. FATF has been seen as a geopolitical instrument because of increasing awareness that Pakistan’s legal, regulatory and financial frameworks are much more robust than other countries even those which are not on the list. The watchdog is being used as a stick to make Pakistan yield to political demands of the west. In latest account The Royal United Services Institute (RUSI) has also acknowledged that the FATF is politically oriented and acts as a leverage for the US Ironically, these countries which lecture others not only provide safe heavens to culprits and money-launderers but also offer safe-heavens to the money looted from developing world.

It is time that Pakistan should follow two-pronged approach, one to expose politicization of the FATF at every international forum and secondly, it must invoke friends to push the case of Indian financial terror sponsoring in the FATF. It’s about time that Pakistan adopts an aggressive diplomacy and provides fool proof cases against India, which is a major player in money laundering. Neither Pakistan nor any other country can afford to let the FATF fall in the trap of lobbyists and other interest groups.

Source: The Nation (Writer: Sharjeel Afzal)

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