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FATF grey-listing could hurt “deep asset” Taliban, derailing Pakistan’s Afghan campaign

Pakistan has been urged by FATF to do more to curb money laundering and funds flow to militant outfits (Pic: Courtesy geo.tv)

Last week’s Financial Action Task Force (FATF) verdict retaining Pakistan in the “grey list,” urging it to do more to curb money laundering and funds flow to  militant outfits has generated a backlash both at home and abroad.

Analysts say the global spotlight on Pakistan’s role in terror funding is likely to seriously setback Islamabad’s campaign in Afghanistan, which is based on mobilising its deep asset—the Afghan Taliban—by bolstering it with clandestine funding.

International media outlets, including the Voice of America of the United States, have reported furtive and furious activity along the Pakistan-Afghanistan border in Balochistan and Khyber Pakhtunkhwa. Madrassahs and mosques have been reportedly gathering funds and recruiting fighters among the seminary students to support the Taliban’s military campaign in Afghanistan.

These two provinces are also homing to the Taliban’s Quetta Shoora and Peshawar Shoora—both nurtured by Pakistan over the last two decades, and involved in Global Jihad.

The VOA reported in its June 19 broadcast: “Donations to the Afghan Taliban are on the upswing in Pakistan border regions as the militant group intensifies attacks against Afghan forces ahead of the U.S. troop withdrawal, locals told VOA.

“Multiple sources and eyewitnesses on the ground with knowledge of these donations have confirmed to VOA that fundraising for the Taliban has continued in various parts of Pakistan.”

Several pitched battles across provinces between   government security forces and the Taliban have revealed that the militant group is short of men and material, requiring a free flow of beneath-the-radar funds from patron-in-chief, Pakistan. 

Security experts note the FATF was aware of Pakistani clandestine activities when it demanded that Islamabad should fulfil all the 27 directives it was issued originally, once it fell under the FATF scanner. Much to Pakistan’s discomfiture and angst, the FATF, has, in fact, added six additional conditions for complete compliance.

Pakistani leaders claim that Islamabad has fulfilled 26 of the 27 directives issued by the FATF, and has therefore been unjustifiably docked in the G-7 watchdog’s grey list.

Led by Foreign Minister Shah Mahmood Qureshi, the Pakistani leadership has gone ballistic against the FATF, accusing it of being politically motivated and biased towards Islamabad. They have accused the watchdog of deliberately sparing many other wrong-doers, including some in Europe from its hit-list. 

Apart from its subterranean and murky Afghan campaign, Pakistan’s grey-listing has also impacted its domestic economy.

The News International newspaper reported on the day of the FATF verdict last week that the Karachi Stock Exchange was ‘nervous’ and the market suffered several notches down in anticipation.

The newspaper in its editorial observed: “Though the FATF has tried to sound positive by encouraging Pakistan to continue making progress to address as early as possible the one remaining Countering Finance of Terrorism (CTF) item, the ultimate outcome for Pakistan has not at all been positive. According to the evaluation of the FATF, Pakistan still has to demonstrate that terror financing investigations and prosecutions have targeted senior commanders and leaders of the UN-designated terrorist groups.”

Significantly, while much of the Pakistani media has concealed it or glossed over it, The News International observed: “But the most devastating outcome of the session for Pakistan was that it has received another six-point list that mainly deals with money laundering. Now, Pakistan also has to comply with the new list irrespective of whether the government of Pakistan disagrees with or dislikes it.”

Given the delicate nature of the verdict, the Pakistani intelligentsia has demonstrated some soul-searching as well.

“After all, the primary beneficiary of the exercise to stop money laundering and combat terrorism financing would be the national economy and the Pakistani people,” Dawn newspaper consoled its readers in its editorial of June 27.

It noted that although the FATF “has consistently been emphasising the complete execution of its action plan for Pakistan to get off the list. Yet some of us have failed to properly read the message of the watchdog after its review meetings, hoping that we still have enough geopolitical weight to get off the list, without having to fully comply with the FATF’s demands.”

The FATF was determined to get Pakistan to fulfil the directive completely, requiring it to “ensure that its law-enforcement agencies cooperate internationally to trace, freeze and confiscate the assets of the designated individuals and entities”.

That being the case, the newspaper added: “More political will is needed to fully comply with the two action plans as the lack of it is imposing heavy costs on the country. The government must swing into action to fulfil the remaining conditions in order to avoid the serious consequences of delay and inaction.”