Pakistan gets FATF reprieve, again

Pakistan, which has been on the ‘grey list’ of the Financial Action Task Force (FATF) since June 2018, has managed yet another reprieve from it. Pakistan has not been put on the ‘black list’ of the terror finance watch body despite Islamabad not taking any significant action to check either terror financing or money laundering. Pakistan played its limited cards well. Indeed, it sensed the situation well in advance and was quite sure it would not be blacklisted. Instead, it actually mounted a diplomatic offensive to get off even the grey list.

The FATF is a Paris-based intergovernmental body created in 1989 to check money laundering but its mandate widened after 9/11 to check even terror financing. It has 39 members and it judges the conduct of member countries on certain bases. The support of 12 countries is required to take a country away from the grey list, while the support of three countries is enough to prevent one from being blacklisted.

Pakistan’s conduct has not improved since June 2018. The terror groups, especially the Lashkar-e-Taiba and Jaish-e-Mohammad, have continued to engage in terrorist actions against India. India has pleaded on international fora that the United Nations should be objective in taking action against countries like Pakistan that sponsor terror groups. In November last, India’s permanent representative to the UN, Syed Akbaruddin, called for a ‘zero tolerance’ approach, without any double standards, to combat the global threat from the crime-terror nexus. He pointed out that UN-sanctioned terror groups such as the LeT and JeM continued to destabilise regions through their cross-border financing and propaganda.

Even the US State Department castigated Pakistan for not acting against terror groups. In its assessment, regionally-focused terrorist groups remained a threat and Pakistan-based LeT — which was responsible for the 2008 Mumbai attacks — and JeM maintained the capability and intent to attack Indian and Afghan targets. It accused the Pakistani government of failing to significantly limit the LeT and the JeM from raising money, recruiting and training in Pakistan, and of allowing candidates affiliated with LeT front organisations to contest the July 2018 general election.

Despite this assessment, the US did not go beyond a point. President Trump had, during his election campaign, promised that he would bring US forces back home from Afghanistan and end the longest war in America’s history. He cannot fulfil this campaign promise without the cooperation of Pakistan from where the top leadership of the Taliban operates. Last week, US peace envoy Zalmay Khalilzad and Mullah Abdul Ghani Baradar, the Taliban group's top political leader, signed a peace agreement in Doha. The US knows that if Pakistan is put on the blacklist, its behaviour towards the US-Taliban peace deal would be hostile.

While the FATF meeting in Paris was on, UN Secretary-General Antonio Guterres visited Pakistan for an international conference on Afghan refugees. Guterres appreciated the role played by Pakistan in hosting Afghan refugees but was careful not to point out the role of the Haqqani network in creating terror. He tried to further please Pakistan by offering mediation in Kashmir, like President Trump has done, too.

The international community also fears that if Pakistan is put on the blacklist, then its troubled economy would deteriorate further, which could cause the country to implode, resulting in further trouble for its neighbours and the world.

Pakistan also tried to use the politics of the Muslim world to its advantage. In recent times, the situation in the Gulf has been in a flux. There is a decline in the political influence of Saudi Arabia while Iran has risen in status. In this environment, Turkey is looking to emerge as the new leader of the Muslim world. With this objective, a summit was organised in Kuala Lumpur and Pakistan was also invited to attend. But Pakistan withdrew at the last minute after the Saudis threatened to send back four million Pakistani citizens and withdraw billions of dollars kept in Pakistani banks. Imran Khan subsequently tried to please Malaysia by visiting that country and invited Turkey’s President Tayyip Erdogan to visit Pakistan. Turkey and Pakistan also have a strong defence partnership. Erdogan visited Pakistan on the eve of the Paris meeting of the FATF and promised to help Pakistan escape being blacklisted.

Pakistan also took some cosmetic measures, as it does on the eve of every plenary meeting of the FATF. It arrested Hafiz Saeed on charges of terror financing and said that another terror kingpin, Masood Azhar, was untraceable. However, India gave evidence of Azhar’s presence in Pakistan.

Pakistan needed three countries to vote in its favour to keep out of the blacklist. These three votes were easily managed with Turkey, Malaysia and China. Moreover Pakistan’s “all-weather friend” China is also current heading the FATF. The exercise perhaps also had the tacit approval of the US, which is hoping that Pakistan would help it to extricate itself from the Afghan quagmire. Whether that will happen or not, only time will tell. For now, Pakistan has got the reprieve it needed.

(The writer is Associate Fellow, Institute for Defence Studies and Analyses, New Delhi)