Financial Action Task Force to take up Pakistan record of choking terror funds

FATF documents state that member states voiced concerns that Pakistan had failed to honour commitments to act against the financing of groups like the Lashkar, made to the organisation’s International Cooperation Review Group (IRCG) in February 2015.

Written by Praveen Swami | New Delhi | Updated: June 24, 2017 10:19 am
Pakistan, financial action task force, Pakistan financing terrorism, Pakistan terrorism FATF documents state that member states voiced concerns that Pakistan had failed to honour commitments to act against the financing of groups like the Lashkar. (File Photo)

Islamabad’s record of action to choke funding to terrorist groups banned by the United Nations Security Council, including the Lashkar-e-Toiba and Jaish-e-Muhammad, will be discussed at a plenary meeting of the Financial Action Task Force (FATF) in October, sources linked to the multilateral institution have told The Indian Express.

The action will come just two years after Pakistan was removed from a blacklist that imposed enhanced surveillance on the country’s financial system.

The discussions were scheduled at the FATF’s February 24-25 plenary in Paris, an internal organisational document shows, based on concerns voiced by member-states that Pakistan was not honouring its commitments to act against terror finance.

FATF, comprising 36 members from the developed countries along with eight regional affiliates who mirror its work and implement its recommendations, has no formal authority under international law.

However, countries that figure on its blacklist face significant problems accessing the international banking system because of the stringent checks that financial institutions subject their transactions to.

Lashkar chief Hafiz Muhammad Saeed, as well as his aides Abdullah Ubaid, Malik Zafar Iqbal, Abdul Rehman Abid and Qazi Kashif Hussain, were in January held under preventive detention clauses in Pakistan’s anti-terrorism laws, just weeks before the Paris plenary, in what observers saw as a last-ditch effort to stave off action by the FATF.

The Lahore High Court is scheduled to rule on the validity of Saeed’s detention, which his lawyer A K Dogar has argued is illegal, next month.

FATF documents state that member states voiced concerns that Pakistan had failed to honour commitments to act against the financing of groups like the Lashkar, proscribed by UNSC resolution 1267, made to the organisation’s International Cooperation Review Group (IRCG) in February 2015. The commitments were made in return for Pakistan being removed from the blacklist it was placed on after 26/11, when evidence emerged that the Lashkar had been tipped off a week before the country cracked down on its bank accounts. In addition, the Lashkar’s parent organisation, the Jamaat-ud-Dawa, continued to operate through accounts held with Abu Dhabi-owned Al-Falah bank in Lahore over two weeks after the 26/11 attack.

In a February 2015 statement, the FATF said it had removed Pakistan from a list of nations that were subject to monitoring, saying the country had “established the legal and regulatory framework to meet commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June, 2010”.

The statement noted, though, that Pakistan was obliged to continue working with its Asia-Pacific Group, “as it continues to address the full range of AML/CFT (Anti-Money Laundering/Countering Financing of Terrorism) issues identified in its mutual evaluation report, in particular, fully implementing UNSCR 1267”.

However, the FATF report states, “some ICRG members expressed a concern that these issues still had not been resolved”. “Consequently, the ICRG had referred the issue of Pakistan’s implementation of UNSCR 1267 with respect to designated entities of concern to the APG for ongoing monitoring”.

The APG, or Asia Pacific Group, is the FATF’s regional unit.

Earlier this year, an Indian Express investigation independently established that the Jamaat’s charitable arm, the Falah-i-Insaniat Foundation, was raising funds for the organisation through proxy bank accounts, which it openly advertised through Facebook. Though there was no effort to mask these operations, none had been shut down by Pakistani authorities.

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