Pakistan has failed to fully implement a UN Security Council resolution against Hafiz Saeed and other UN-designated terrorists, as well as outfits like Jaish-e-Mohammed and the Lashkar-e-Taiba, the Asia-Pacific division of global money laundering watchdog Financial Action Task Force (FATF) said today. According to news agency PTI, the agency also said Pakistan was fully compliant with only one of 40 recommendations on curbing money laundering and terror-financing in the country.
The FATF report, which was published on Saturday, comes a week before the agency decides whether to retain Pakistan in a “grey list” of countries with inadequate controls over terrorism financing.
“… chances are high that Pakistan would be retained on the grey list during the FATF plenary meetings from October 13 to 18 in Paris,” the report said, according to PTI.
According to the report, Pakistan was largely compliant on only nine of the FATF’s 40 recommendations. It was partially compliant on 26 and non-compliant on four. Pakistan had been placed on the “grey list” in June last year and given till October this year to show it had successfully met global standards.
“Pakistan has not taken sufficient measures to fully implemcent UNSCR 1267 obligations against all listed individuals and entities – especially those associated with Lashkar-eTayyiba (LeT) / Jamaat-ud-Dawa (JuD), and Falah-i-Insaniat Foundation (FIF) as well as the groups,” the FATF report read, according to a report by news agency ANI.
“Pakistan should adequately identify, assess and understand its ML (Money Laundering) / TF (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,” the report continued.
The report disagreed with Pakistan’s self-assessment that it only faces “medium” category risks, saying that national regulators like the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan – had very limited understating of money laundering and terror financing regimes.
“Competent authorities have varying levels of understanding of the country”s money laundering and terror financing risks, and the private sector has a mixed understanding of risks,” the report said.
In June the FATF warned Pakistan to act decisively against terror-financing or face consequences.
It said the country could be blacklisted, placing it alongside Iran and North Korea, unless it fulfilled an “action plan” against UN-designated terrorists operating on its soil, highly-placed sources in the Indian diplomatic team said.
Although China came to Pakistan’s rescue, it did not oppose the final language of the warning.
Should Pakistan be blacklisted by the FATF, it also risks being downgraded by the International Monetary Fund, the World Bank and the Asian Development Bank and facing negative assessments from credit rating agencies such as Moody’s, Standard & Poor’s and Fitch.
India and other member countries of the FATF have charged Pakistan with failing to take concrete action against Hafiz Saeed, Masood Azhar and other UN-designated terrorists, pointing out that its anti-terror law still remains out of sync with standards set by the international body.
“It’s a serious anomaly that Pakistan’s anti-terror law still remains out of sync with FATF standards and also the latest UN resolution 2462, which calls for criminalising terrorist financing. We have pointed this out regularly at plenary sessions,” a senior officer told NDTV in June.
Pakistan contends it has done enough by seizing over 700 properties belonging to the Lashkar-e-Taiba, Jamaat-ud-Daawa, Falah-i-Insaniyat Foundation and the Jaish-e-Mohammed but India and other FATF members have pointed out that seizures do not necessarily indicate compliance.