Pakistan slipped on timelines to curb terror financing: Global watchdog FATF
The FATF said it was continuing to work with Pakistan, which has been hoping to get off a “grey list” of nations with inadequate controls over such activities.
Pakistan’s efforts to get off the watch list of the Financial Action Task Force (FATF) suffered a setback on Friday with the multilateral watchdog saying the country had made “limited progress” in curbing terror financing and failed to show proper understanding of risks posed by banned groups such as Jaish-e-Mohammed (JeM) and Lashkar-e-Taiba (LeT).
At the conclusion of its plenary meeting in Paris, FATF condemned the February 14 Pulwama terror attack that killed 40 Indian paramilitary troopers and said such strikes cannot be carried out without the illicit transfer of funds between terror supporters.
India has pushed FATF to keep up the pressure on Pakistan following the Pulwama attack, which was claimed by JeM. French officials said last week Paris will work with New Delhi to ensure Pakistan remains on the watch list.
Pakistan has to implement a 27-point action plan by September to be taken off FATF’s “grey list”, in which it was included last June.
After that, FATF will decide whether to remove it from the grey list or to put it in a “black list,” which will entail harsher sanctions and greater scrutiny of financial transactions.
Experts said even a positive assessment at Paris would have resulted in Pakistan’s remaining in the grey list.
Pakistan’s continued presence on the grey list makes it harder for its government to access international markets at a time when the country’s economy is faltering. While there are no direct legal implications, the listing brings extra scrutiny from regulators and financial institutions that can hit trade and investment.
FATF said in its assessment that Pakistan had made “limited progress” on five points of the action plan that had to be implemented by January. It urged the country “to swiftly complete its action plan, particularly those with timelines of May 2019”.
Three of the five points related to terror financing risk assessment and two to targeted actions such as asset freezing of terrorist individuals and groups, including those listed by the UN’s 1267 Committee.
Though Pakistan has taken steps to improve its anti-money laundering and counter-terror financing regime and revised its terror financing (TF) risk assessment, “it does not demonstrate a proper understanding” of the terror financing risks posed by Da’esh, Al-Qaeda, Jamaat-ut-Dawah (JuD), Falah-e-Insaniyat Foundation (FiF), LeT, JeM, Haqqani Network “and persons affiliated with the Taliban”, FATF said.
Pakistan should continue to implement its action plan and address “strategic deficiencies” by demonstrating “proper understanding of the TF risks posed by the terrorist groups above” and using “remedial actions” in case of violations, the watchdog said.
It should also improve inter-agency coordination and ensure investigations and prosecutions target designated persons and entities, demonstrate effective implementation of targeted financial sanctions “against all 1267 and 1373 designated terrorists”, freeze assets and ensure facilities and services owned or controlled by designated persons are deprived of resources. The numbers refer to United Nations resolutions dealing with a sanctions regime against any terror group or terrorist linked to Al-Qaeda, and on tackling terrorism in various ways, respectively.
In a separate statement on current efforts against terror financing, FATF said it expresses “grave concern and condemns the violent terrorist attack last week that killed at least 40 Indian security forces in the State of Jammu and Kashmir”.
Referring to other terror attacks in countries such as Afghanistan, Nigeria, Indonesia and Turkey, it added, “While all these attacks kill, maim, and inspire fear, they cannot occur without money and the means to move funds between terrorist supporters.”
