In 2018 when Pakistan was pushed into the FATF grey list, the then finance minister Miftah Ismail claimed that the listing would have no negative impact on the economy. He also insisted that Pakistan had among the most stringent anti-money laundering and countering terrorism finance (AML/CFT) laws. Four years later, Pakistanis are over the moon because they have been taken off the grey list and are celebrating as though this was the only reason why the economy was on verge of a meltdown.
Going by Pakistani media and politicians, it would appear that Pakistan is poised for an economic take-off now that they are no longer in the grey list — spoiler alert: it ain’t happening because the benefit of a FATF upgrade pales in comparison to the damage caused by the credit rating downgrade (to almost near-default level) by Moody’s and Fitch. Equally interesting is the fact that the same Pakistan which claimed that it was a victim of global geo-politics and its AML/CFT laws were adequate, is now crowing about how much effort it has put to tighten its financial system.
The fact however remains that while Pakistan was subjected to ‘increased monitoring process’ (aka grey list) by FATF on objective criteria, it has been taken off the grey list not so much because it has delivered on the high level commitments it made, but because of purely political and diplomatic reasons. Simply put, this was part of a quid pro quo for certain assurances and actions taken by Pakistan to ‘do more’ on issues demanded by global powers — the targeting of slain Al Qaeda chief Ayman al-Zawahiri is believed to be one such deliverable.
The thing is that the entire FATF decision making process is clouded in secrecy. Apart from the statement issued after every plenary, there is virtually no information of the discussions and deliberations that take place in FATF or its affiliated bodies. Leaks, motivated or genuine, are not only frowned upon but can actually boomerang — something Pakistan found out in 2018 when their loud-mouth foreign minister Khawaja Asif pre-maturely announced that they were not being grey-listed only to find out the next day that the case had been reopened and they were pushed into the grey list. This opacity in FATF is what makes it so difficult to understand why Pakistan was taken off the grey list.
On purely objective criteria, while Pakistan has made laws and procedures to beef up the AML/CFT systems, when it comes to terrorism by entities designated to be ‘strategic assets’ of the Pakistani state, these laws and regulations will be observed in their violation. In fact, when the first FATF review happened shortly after Pakistan was grey-listed, the Pakistanis made a big show of taking the necessary legislative and administrative steps to satisfy the FATF. On paper they seemed to have delivered. But when the FATF started delving deeper and asking questions, it turned out it was all an eyewash.
For instance, virtually no one from any designated terror organisation had been prosecuted successfully and the money recovered was a pittance. Since then, the Pakistanis have passed laws and tightened their regulatory framework on AML/CFT but their implementation remains extremely suspect. For example, since 2021 Pakistan claims to have acted against the Lashkar-e-Taiba/Jamaat-ud Dawa leadership. The terrorist Hafiz Saeed has even been prosecuted and sentenced in multiple cases. Other designated terrorists have also been handed out sentences. This was primarily done to demonstrate ‘successful prosecution’.
The problem is that the details of none of these cases are available in public domain. In a country where cases take years, even decades, of torturous legal processes to reach conclusion, these AML/CFT cases were filed, prosecuted, and people convicted within days. Surprisingly, there is no information of any appeal being filed after these sentences were announced. It is almost as if the terror convicts were told to keep quiet until Pakistan gets out of the grey list. Now that it is out, there is a very high likelihood that appeals will be filed before superior courts which are almost sure to throw out these cases. At that stage FATF will have egg on its face because it will undo all the pressure that was built on Pakistan. The Pakistanis will of course plead that they cannot interfere with the ‘independent’ judiciary.
What did tilt things in favour of Pakistan was not just the conviction of Hafiz Saeed but also that of one of the main masterminds of the 26/11 terror attacks in Mumbai — the infamous Sajid Mir, the chilling voice sitting in Karachi and directing the massacre in Mumbai. For years Pakistan denied any existence of Sajid Mir, who is believed to be closely linked to ISI. Later they admitted that Mir did exist but they didn’t know who he was. Then they accepted that Mir was a LeT/JuD terrorist but they had no idea about his whereabouts. When pressure continued to mount, the Pakistanis said they found Sajid Mir but he was unfortunately dead. They even identified his grave and later carried out DNA analysis to prove it was Mir’s grave. And then voila! Mir rose from the dead. Earlier this year just before the FATF plenary, a one para report in the Pakistani newspaper, The Nation, announced that Mir had been tried and convicted by a court in Lahore.
The FATF was so happy with this ‘achievement’ that they forgot that apart from Hafiz Saeed, they had made actions against two people the litmus test to judge Pakistan’s compliance. One was Sajid Mir; the other was Jaish-e-Mohammad chief Masood Azhar. In the latter case, the Pakistanis kept pleading they had no idea about his whereabouts. Later they tried to throw their allies — the Afghan Taliban — under the bus by insisting that Azhar was somewhere in Afghanistan and out of the reach of Pakistani law enforcement. Till date, the Pakistanis have protected Azhar and not even made the cosmetic gesture of taking any kind of meaningful action against him. More than anything else, this is a sign that Pakistan has continued to retain the option of using terrorism as an instrument of state policy.
The Azhar case and the sham conviction of Hafiz Saeed and Sajid Mir raise the question of the efficacy of the actions taken by Pakistan that seem to have satisfied FATF. None of the designated terrorist organisations have been eliminated; the nurseries of terrorism continue to flourish. As for AML/CFT, the way money is flowing from Pakistan into Taliban-controlled Afghanistan, including to terrorist groups based in that country speaks volumes about the effectiveness of the controls Pakistan has put in place. But as some Western diplomats have said, getting Pakistan to convict Saeed and Mir was in itself quite an achievement and there was little point in pushing Pakistan to ‘do more’.
Despite the Faustian bargain at FATF, the last four years in which Pakistan was made to jump through the hoops prove that pressure, when applied smartly and in a way that it raises costs to a point where persisting with a pernicious policy proves more expensive than the benefit it yields, Pakistan will succumb. That this pressure was lifted somewhat prematurely doesn’t take away anything from the effectiveness of the FATF to force compliance on states like Pakistan. But it does reflect poorly on some of the Western countries which for their own cynical political and strategic objectives will use forums like FATF to cut slack for roguish states. This, more than anything else, is the reason why the scourge of terrorism continues to survive.
The writer is Senior Fellow, Observer Research Foundation. The views expressed in this article are those of the author and do not represent the stand of this publication.
Read all the Latest Opinions here
Comments
0 comment