Pak fares poorly on terror funding as FATF watches

Country compliant with only one of 40 recommendations

NEW DELHI: Days ahead of a meeting of the Financial Action Task Force that will consider whether to blacklist Pakistan, an official report has found the country is fully compliant with only one of 40 recommendations made by the global watchdog to counter terror financing and money laundering.

The report will be among materials to be considered by the FATF’S plenary and working group meetings in Paris from October 13 to 18. The multilateral body is expected to decide whether to retain Pakistan in the watchdog’s “grey list” or downgrade its status to the “black list”, which could entail extensive economic sanctions and impact a $6-billion bailout programme with the IMF.

Pakistan was placed on the grey list last year, and a string of assessments by FATF and the Asia Pacific Group (APG), a regional body that monitors compliance with the watchdog’s terror financing standards, have found that the country has failed to deliver on most components of a 27-point action plan.

The new “mutual evaluation report” by APG states Pakistan should make “fundamental improvements” in investigating and prosecuting cases related to raising and use of funds by groups such as Lashkar-e-taiba (LET), Jaish-e-mohammed (JEM), Jamaat-ud-dawah (JUD), Falahe-insaniyat Foundation (FIF), al-qaeda, Islamic State, Taliban, and Haqqani Network.

In its list of “priority actions” to be taken, the report states:

“Pakistan should adequately identify, assess and understand its ML/TF (money laundering/ terror financing) risks including transnational risks and risks associated with terrorist groups operating in Pakistan such as Da’esh, AQ, JUD, FIF, LET, JEM, HQN, and this should be used to implement a comprehensive and coordinated risk-based approach to combating ML and TF.”

Of 40 technical recommendations made by FATF to counter money laundering and terror financing, the report showed Pakistan was “fully compliant” only with a recommendation for secrecy laws for financial institutions, non-compliant on four, partially compliant on 26, and largely compliant on nine.

The report also gave Pakistan a “low” rating for effectiveness and technical compliance on 10 key issues, including investigation and prosecution of terror financing, preventive measures, financial sanctions, policy and coordination, and financial intelligence.

The only exception was a “moderate” ranking for international cooperation.

The report said Pakistan had not taken “sufficient measures” to implement obligations under the UN’S 1267 Sanctions Committee against listed individuals and entities, “especially those associated with Let/jamaat-ud-dawa (JUD), and Falah-i-insaniat

Foundation (FIF) as well as the groups’ leader Hafiz Saeed”.

Though authorities had taken control of some properties of JUD and FIF, Pakistan didn’t demonstrate that it had “established effective asset management of this frozen property” and could not provide information about the prosecution of individuals associated with the property.