Waiting for the whitelisting

PAKISTAN is trying hard to avoid being placed on the Financial Action Task Force's blacklist. From the outset, state institutions deemed FATF compliance a punitive political tool and responded accordingly. But with growing pressure, the government has been gradually addressing deficiencies in its counter-terror-financing (CTF) regime. The process may take long, but it should not come at the cost of civil liberties.

The FATF Council of Ministers is expected to meet in Miami on Aug 15. Ministers will most probably meet virtually, and may take up Pakistan's compliance report. According to media reports, Pakistan would have had to submit its report by Aug 6. The good news is that Pakistan has completed its long-pending legislative work. The lower and upper houses of parliament unanimously approved the United Nations Security Council Amendment Bill and the Anti-Terrorism Act Amendment Bill to fulfil FATF requirements. The Mutual Legal Assistance (Criminal Matters) Bill was also passed after accommodating opposition parties' concerns. After these legislative moves, Pakistan is expecting to receive some relief from the FATF.

Apart from the passage of CTF laws, the anti-terrorism courts have expedited proceedings of terror-financing cases. For instance, Gujranwala's ATC handed down 16-year imprisonment each to five Al Qaeda militants for financing terrorism and keeping explosives. The cell was also involved in financing terrorist operations of Al Qaeda in the Indian Subcontinent.

Separately, ATCs have indicted Jamaatud Dawa chief Hafiz Muhammad Saeed, his brother-in-law Hafiz Abdul Rehman Makki, and three other JuD leaders on charges of terror financing. The Punjab CounterTerrorism Department had registered some 23 FIRs against Hafiz Saeed and JuD's other leaders in police stations in Lahore, Gujranwala, Multan, Faisalabad, Sahiwal and Sargodha in 2019. The CTD accused them of using the properties of religious seminaries and mosques for terror financing.

The confidence of ministers suggests that the government has achieved some major milestones. The confidence of the federal ministers suggests that the government has achieved some major milestones and Pakistan may be removed from the FATF's grey list. In June, Interior Minister Ijaz Shah claimed that Pakistan had met most of the conditions set by the FATF and that his ministry had frozen 976 movable and immovable properties of proscribed outfits, besides bringing several schools, colleges, hospitals, dispensaries, ambulances, etc of the proscribed organisations under government control.

These are promising developments. But Pakistan's terror-financing challenge should not be confined only to FATF compliance. Pakistan has no option but to continue its efforts to curb both terrorism and terror financing, irrespective of the FATF's listing. For one, as the risk of terror-financing increases, the FATF's jurisdiction will also get tougher, not only for Pakistan but for all states that have high vulnerabilities.

Pakistan's concerns regarding the use of the FATF as a political tool carries some weight. Last year, China had disapproved its politicisation, as several foreign countries could be pursuing a political agenda against Pakistan. There was a perception in Islamabad that FATF compliance had replaced the mantra of ' do more'. However, in the absence of the politicisation factor, Pakistan will have to develop a comprehensive CTF regime based on three factors: threat, vulnerability and consequences. For this purpose, the FATF recommends an establishment of authority or mechanism to coordinate actions to assess risk.

The Mutual Legal Assistance (Criminal Matters) Bill endorses the establishment of a central authority comprising the secretaries of the interior, law and justice, and, foreign affairs ministries; the home secretaries of all four provinces; with the interior secretary as its convener. This is a small forum and FATF guidelines suggest a broader body for the purpose to maintain an up-to-date assessment of terror-financing risks, which can include the prosecution authority, non-profit organisations' supervisory authority, tax and revenue authority, real estate registry, etc.

This is important as a wider body can assess the terror-financing threat more comprehensively. Though 14 key institutions, including the Financial Monitoring Unit and the National Counter Terrorism Authority, collaborate in developing strategic analyses in compliance with the FATF's recommendations, the constitutional decisionmaking authority proposed in the bill needs to be expanded, including civil society or local watchdogs on CTF.