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Meeting FATF’s remaining requirements

Dr. Ikramul Haq

Much has been written on meeting the remaining six challenges posed by Finical Action Task Force (FATF) and how to come out of grey list for which February 2021 is the deadline. The ‘Jurisdictions under Increased Monitoring–23 October 2020, Financial Action Task Force’, says: “FATF takes note of the significant progress made on a number of action plan items. Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by February 2021”.

The areas need to be covered, pointed out in above report are: “(1) that law enforcement agencies are identifying and investigating the widest range of Terror Finance (TF) activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or on the direction of the designated persons or entities; (2) that TF prosecutions result in effective, proportionate and dissuasive sanctions; (3) effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to Non-Profit Organizations (NPOs), identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; and (4) enforcement against TFS violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases”.

How to cope with above areas have been exhaustively discussed and solution offered in a book published on January 1, 2021, ‘Pakistan Tackling FATF: Challenges and Solutions’, but politicians in power and policymaking seldom read and write. There is every possibility that this book too will be ignored though it highlights critical shortcomings in our laws and their enforcement to counter terrorist financing, money laundering, tax evasion, corruption and various other financial crimes and offer viable solutions.

Undoubtedly, there are serious lacunae in the existing laws to counter ML/TF, tax evasion and other financial crimes. The apparatus to enforce these laws is extremely weak and fragmented, lacking coordinated efforts. The appointments on key posts of incompetent people are made without any oversight by legislators/courts. The affluent segments exert pressure and officials rarely resist the same. The contradictory provisions in laws, coupled with faulty policies and ineffective apparatus for enforcement, are the root cause of our persistent failure to counter the menaces of ML/TF.

The successive governments have failed to devise a pragmatic model fulfilling the global standards and the system of internal and external checks and balances that is national need and not only to come out of the grey list of FATF. It is in our own best national interest to eliminate the scourges of terrorism, money laundering, corruption and other financial crimes. All these pose internal threats to national security.

The latest ghastly incidence of terrorism, on January 3, 2021 of massacre of Hazaras working in a coal mine near the town of Mach, about 50 kilometers east of Quetta, reminds us about many others where even men in uniform were attacked/ambushed. In the fight against terrorism our armed and civilian forces have showed extraordinary courage and offered sacrifices of their lives. ‘Pakistan Tackling FATF: Challenges and Solutions’, [coauthored with Huzaima Bukhari & Abdul Rauf Shakoori] is thus rightly dedicated to “all those who have been waging valiant and unabated war against terrorists,  money launderers and all those engaged in organised crimes to defend their beloved motherland with complete loyalty and courage and sacrificed their lives for exterminating their roots and financial life lines. Also to all who are working to improve financial transparency, international cooperation on tax matters, efforts to combat bribery and corruption, and work on preventing money laundering, terrorist financing and returning stolen assets in the light of goals set by High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) for Pakistan to reform revenue administration, improve transparency, promote good governance and deter, detect, prevent and counter the cancerous growth of corruption”.

It is unfortunate that incidents of terrorism curtailed significantly in the wake of Operation Zarb-e-Azb (launched on June 15, 2014), followed by Operation Radd-ul-Fasaad (began in February 2017), are again happening when Pakistan is facing a daunting challenge to come out of grey list.

It is essential to attack the strong hold of all militant groups—cutting their financial lifelines. The valiant struggle of our armed and civilian forces countering terrorism is praiseworthy to protect national security. The neglected area is destroying the deadly tentacles of ML/TF. The recent dossier on Indian sponsoring of terrorism in Pakistan exposes from where they get money, arms and training. It is, thus, necessary to make a case before the FATF and ‘Asia Pacific Group on Money Laundering’ (APG) that Pakistan is a victim of terrorism from outside and need international cooperation to counter the threats of ML/FT posing threats to our national security.

Since the tragic assassination of Benazir Bhutto on December 27, 2007, we witnessed many dreadful events of sectarian killing, assassination of Bashir Ahmad Bilour, senior leader of Awami National Party and others on December 22, 2012 and one of the most wanton incidents in human history in Peshawar on December 16, 2014 when seven terrorists of Tehreek-i-Taliban Pakistan (TTP) attacked Army Public School to target innocent students/staff. The nation also remembers sad killings of General Sanaullah Niazi, Lieutenant Colonel Touseef and others on September 15, 2013, series of bomb blasts at many places, attacks on armed forces and civilians by the militants. The carnage in Quetta of August 8, 2016, killing 70 and injuring over 100 was another great jolt to the entire nation and there were attacks on GHQ, PNS Mehran Base, Karachi and PAF Base at Kamra—just to mention a few.

The comprehensive solution lies in dismantling all the financial links of terrorist outfits, their sympathisers not by constituting committees and sub-committees or using the Federal Board of Revenue (FBR) for countering money laundering or benami (fake) transactions. FBR and National Counter Terrorism Authority (NACTA) or other civilian law enforcement agencies lack capacity to deliver as highlighted in ‘Pakistan Tackling FATF: Challenges and Solutions. Ourweak and broken enforcement system allows terrorists to continue thriving on laundered money and organised crimes. Therefore, we need Pakistan Financial Crime Monitoring Bureau to act as autonomous and apex watchdog for AML/FT, and all other financial crimes. This apex agency [complete structure is provided in Pakistan Tackling FATF: Challenges and Solutions] will collect and pass incontrovertible evidence to an independent and competent Pakistan National Prosecuting Agency to take the offenders to task in special speedy trial courts where judges have expertise in AML-CFT laws to deliver judgements swiftly but following Article 10A of the Constitution of Islamic Republic of Pakistan. The viable solutions, given in the book, need immediate attention of the government to meet the remaining requirements of FATF and ensure national security that is a prime duty of every citizen under Article 5 of the Constitution.


Dr. Ikramul Haq, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS).

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