KEEPING IN CHECK
Can the Financial Action Task Force stop Pakistan from promoting terrorism?
There is some expectation, at least very strongly within media circles in India and perhaps equally so in government circles, that the terrorist actions emanating from Pakistan are likely to be curbed if the 39-member strong Financial Action Task Force prevails over Pakistan. But given the facts, this is a misplaced notion since this body was set up only to recommend and did not have the mandate to impose sanctions. It is only an intergovernmental organisation set up in 1989 on the initiative of G7 members primarily with a view of providing solutions to combat money laundering activities leading to the funding of terrorist activities. It was up to the member countries to energise its own processes and banking systems under its control to enforce curbs.
The action essentially is aimed at curbing the flow of money to terrorist groups and money laundering is seen as the core activity promoting the process. The FATF expects Pakistan to take salutary steps to stem this activity. A very recent Pakistan media report claims that “In 2019, penalties amounting to Rs 247 million have been imposed on 11 financial institutions for weak screening procedures and … on different banks for not meeting bio-metric verifications. Moreover, State Bank of Pakistan has punished three banks with heavy penalties of Rs 133.3 million for the violation of its prescribed rules and regulations in September 2019. These banks are Meezan Bank, Askari Bank, and MCB Islamic Bank. Stern action (for the benefit of FATF) was taken against these banks as part of the steps taken by the government to be removed from the grey list of Financial Action Task Force (FATF)”. But there is no clarification that the money which came through this process reached the terrorist outfits. Obviously,
The attitude of FATF members itself is ambivalent. Whilst the terms Grey List and Black List of countries linked with terrorist activities are being bandied about, we are not aware of the proposed steps against Pakistan should it be placed in the Black List
the steps seem to be cosmetic in nature as the problem lies elsewhere. Most of the remissions to the nefarious terrorist funding come through the hawala route and not through the banking system.
In a demonstration of similar steps, the Pakistan government has publicly banned several organisations like the Lashkar-e-taiba and the Jamaat Dawa and perhaps the Jaishe-mohammed along with its tentacles. But selections of these organisations were done because they had come in the public glare. On the other hand, there is confirmed news that the training establishment at Balakot has been resurrected and is functioning as earlier. We must, in fact, look at the capacity of Pakistan government per se in healing the terrorist outfits, especially when many of these groups have been purposefully funded and nurtured by Pakistan Army as a paramilitary force to be used against India and even in Afghanistan. The Army in
Pakistan controls the country’s deep state and unleashes its power in all nefarious assignments – the terrorist infiltration into Jammu and Kashmir. An activity which could not even be stopped despite the clampdown by the Indian government in that region.
On the other hand, most recently, the regime went greatly out of the way to protect Sri Lankan cricket team touring Pakistan with phenomenal paraphernalia. A process not routinely possible in Pakistan. However, it was essentially to demonstrate to the world their potential in keeping a secure environment. In fact, a similar security architecture is being put into place to provide security to members of British Royalty, namely Prince William and Princess Kate Middleton currently touring Pakistan. It is learnt that the British government needed to be extra assured of the security for their royals, having faced terrorist attacks in the UK perpetrated by terrorists of Pakistani
origins in the past. The UK is an influential member of the FATF.
Most importantly, the attitude of FATF members itself is ambivalent. Whilst the terms Grey List and Black List of countries linked with terrorist activities are being bandied about, we are not aware of the proposed steps against Pakistan should it be placed in the Black List.
It is important to note that several countries and global institutions are publicly supporting Pakistan claiming its precarious financial, especially debt, condition and have provided funds as follows: China - US$ 6.3 billion, Saudi Arabia - US$ 6.2 billion, UAE - US$ 1 billion, World Bank - US$ 1.3 billion, Asian Development Bank - US$ 1.6 billion and the Islamic Development Bank - US$ 1.1 billion. The gross inflows of multilateral and bilateral disbursement would take place within the next two years. These same countries and institutions constitute the FATF. Surprisingly, on the other hand, no questions are being asked about Pakistan’s Defence Budget which is the primary source of funds for terrorist groups and militants owned by the country’s army.
I see no decline in Pakistan’s potential for unleashing its terror forces against India. There are neither prospects nor indicators for disbanding its well-trained terror groups. The security establishment in India, therefore, must provide documents, pictures, facts and figures of the data available at the FATF plenary meeting currently in session to propel the members towards an effective solution. I believe that in addition to using the ‘big powers route’ namely USA, France, etc., we may make strong diplomatic overtures towards Saudi Arabia and the UAE to rein in Pakistan’s military.
(Prashant Dikshit is a retired Air Commodore and strategic affairs commentator.
Views expressed are strictly personal)