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FATF Sword of Damocles Keeps Hanging Over Pakistan


In 2018, the United Nations (UN) Financial Action Task Force (FATF) — the international watchdog against money laundering and financing of terrorism —  placed Pakistan once again on their list of “jurisdictions with strategic deficiencies”, or ‘the grey list.’ This was the third time, after 2008 and 2012 that Pakistan was placed on the grey list. FATF’s rationale were “Pakistan’s structural deficiencies in anti-money laundering (AML) and combating financing of terrorism (CFT).”

Despite various attempts over the last two years, the government of Pakistan has failed to remove Pakistan from the watchlist. Instead of taking action against extremist groups and shutting down their recruitment or financing capabilities, the Pakistani state has continued its policies of old. For example, instead of eliminating terror groups, Pakistan has over the last few months just removed names of terror groups from the watchlist!

If Pakistan really wants to get off the grey list, the only way is to “enhance Pakistan’s standing in the world and defuse the threat that has hung like a sword over its economy.”

In July, both houses of Pakistan’s parliament passed two timebound FATF bills, the Anti-Terrorism (Amendment) Bill 2020, and the United Nations (Security Council) Amendment Bill 2020. However, the way in which these bills were passed is a matter of concern. According to an editorial in Dawn, “The bills and amendments to them suggested by a Senate panel were discussed in a behind-the-scenes meeting by the government, the PML-N and the PPP. The National Assembly then promptly rubber-stamped what was placed before it — its usual response to FATF-related bills. Such quiescence is jarring. The legislation pertains to national security, and the people’s representatives would be expected to have robust opinions on it. It is also alarming, and highly unethical, for the government to have attempted to sneak in a draconian ‘economic terrorism’ bill under the umbrella of the FATF-related legislation. The proposed law would have allowed any citizen to be detained for up to 180 days, on instructions by committees manned by intelligence agency personnel. Fortunately, the opposition shot it down.”

According to the editorial, the belief that terrorist “outfits can be ‘managed’ is flawed and myopic; ultimately, all of them devour their ‘host’ nation by corrupting its youth and destroying their future. Moreover, they do not operate in silos. At some level, even those that do not carry out attacks within Pakistan enable each other, if indirectly; all of them thus pose a security risk for the country.”

Author: Zahid Khan