Financial Action Task Force and Pakistan: A brief history

Financial Action Task Force (FATF) is an international organization formed in 1989 to investigate terrorist financing, money laundering and other illegal activities that relates to the international financing system. Recently, they had taken the decision to place Pakistan on its global money-laundering watchdog’s grey list during the plenary meeting in February two years prior.

Pakistan was given more time to take measures to implement the FATF’s anti-money laundering and terrorist financing regulations. FATF announced that Pakistan has been placed on the grey-list of FATF that watches the countries that lack proper efforts to track terrorist financing.

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Pakistan was included in the grey-list in June, 2018. Pakistan’s inclusion had raised a lot of concerns in the country and had hinted at a propaganda against the state, the reason behind this was that FATF evaluated the country’s financial system to determine if they were to be included in the blacklist. However, this time, no such evaluation was done and FATF had just acted on the United States proposal with the backing of France, Germany and Britain. It was believed that Pakistan was included in the list because Jamaat-ud-Dawa (JuD) and Falah-i-Insaniyat Foundation, both of which were designated as terrorists organizations by United Nations, were allowed to work freely in the country.

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Pakistan roughly had three months to devise an action plan against money laundering and terrorist financing but, the news didn’t end just here. If Pakistan failed to satisfy FATF with their devised strategy, then Pakistan was to be placed on the blacklist. Blacklisted countries are those that are unwilling to fight against money laundering and terrorist financing. In this case, if Pakistan had been placed in the blacklist, it could have an almost irreversible impact on the economy.

Although, recently Pakistan’s image has improved overall and several big companies have announced their intentions to invest in the country (the auto and telecom sectors being a prime example of this). In case Pakistan was blacklisted, we might have seen these companies step back and not invest here at all.

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In February 2019, the government announced a ban on the JuD and the Falah-e-Insaniyat Foundation, the charity arm of the JuD, to partially address the concerns raised by India that Pakistan was allegedly supporting these and six similar organisations, including the Jaish-e-Mohammad (JeM), or at least considered them low-risk entities. Law enforcement agencies over the next few weeks intensified their crackdown on the JeM, the JuD, the FIF and other banned outfits, and arrested more than 100 activists. Nearly 200 seminaries besides hundreds of other facilities and assets associated with them across the country were taken over by the government.

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The JuD chief was arrested once more by the Counter Terrorism Department (CTD) in July last year, while he was travelling from Lahore to Gujranwala. Prior to his arrest, 23 first information reports (FIRs) had been registered against JuD leaders, including Saeed and JuD Naib Emir Abdul Rehman Makki, at police stations in Lahore, Gujranwala, Multan, Faisalabad and Sargodha.

According to the CTD, the JuD was financing terrorism from the funds collected through non-profit organisations and trusts including Al-Anfaal Trust, Dawatul Irshad Trust, and Muaz Bin Jabal Trust. These non-profit organisations were banned in April last year as the Counter Terrorism Department, during detailed investigations, found that they had links with the JuD and its top leadership.

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Subsequently, Saeed was nominated in about 29 cases pertaining to terror financing, money laundering as well as illegal land grabbing. On February 6, the verdict in two such cases filed by the CTD’s Lahore and Gujranwala chapters was reserved by a Lahore Anti-Terrorism Court (ATC).

The verdict was expected to be announced on February 8 but was delayed after the court said it would decide on the basis of a fresh application filed by the lawyers of Saeed and his associates.The latest petition by Saeed demanded that collective verdicts be issued after trials in all the pending cases.

A prosecutor had opposed the application and argued that the court could announce its verdict in cases wherein arguments had been closed. The court, however, deferred the decision and sought arguments on the application from both sides on February,12 this year.

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Even though, Pakistan has done so much till date, it is still unpredictable as to what decision FATF will take in its upcoming meeting.

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