India must remain alert

by February 26, 2020 0 comments

Though Pakistan is unlikely to openly promote cross-border terror as long as the sword of FATF continues to hang over it, Islamabad would continue to back terrorism clandestinely

Despite intensive lobbying by Islamabad and cosmetic measures to convince the Financial Action Task Force (FATF) to take it off the grey list in which it was placed in June 2018, the international watchdog has once again placed Pakistan in the said list with a stern warning to be prepared to be placed in the blacklist if it does not complete the full action plan by June.

This was not the first time that Pakistan was being named and clubbed with countries like Ethiopia, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen. It had been similarly shamed in the past in 2008 and then again from 2012 to 2015. In June 2018, Pakistan was given an action plan, to be completed by October 2019, or face the risk of being blacklisted, the ultimate death knell for its shattered economy. The FATF’s reasoning is Pakistan’s “structural deficiencies” in anti-money laundering (AML) activities and combating financing of terrorism (CFT). However, Pakistan failed to implement the action plan to be able to negotiate an exit from the grey list. At the same time it successfully averted being Blacklisted with the support of China, Malaysia and Turkey and was given additional time to comply.

To understand the charter of FATF and why Pakistan is on its target list, it is necessary to understand the terms money laundering and terror financing. In simple terms, laundering pertains to disguising cash earned from a crime as funds earned through legitimate sources. The crime could be corruption, drug trafficking, fake currency, fraud or tax evasion. Terrorist financing involves collection of funds to support acts of terror or terrorist organisations. The key difference between the two is that, in money laundering, the source of funds has to be a crime. In the financing of terrorism, money may come from perfectly legitimate sources, such as donations from  citizens, but the purpose has to be a crime. Pakistan has been charged with both and is accused of supporting terror groups like the Haqqani Network, Jaish-e-Mohammad, Lashkar-e-Toiba. Hizbul Mujahideen and the Taliban.

However, Islamabad denies this and plays the victim card. It quotes the Global Terrorism Index, 2017 by the Institute of Economics and Peace that ranks Pakistan as the fifth country most affected by terrorism, after Iraq, Afghanistan, Nigeria and Syria. Pakistan’s leadership feels that its placement in the grey list is far more political than financial. Nothing can be farther from the truth since Islamabad’s role as a fountainhead of terror has been exposed to the world on numerous occasions. Pakistan today is known the world over for not only producing global terrorists but also harbouring, training and financing various jihadi organisations, particularly those involved in cross-border terror against India and Afghanistan. Ever since its placement in the grey list, Pakistan has been seeing it as an attempt by the USA to put pressure on it to “do more” on issues related to terrorism, as had been openly demanded by the US President Donald Trump. Pakistan is also convinced that if the US can have it placed on the grey list, it can also make it easy for it to exit the list, if Islamabad is somehow able to contribute to American interests in the region. While it has been making cosmetic attempts to institute measures as per the plan of action suggested by the FATF, it has been concentrating more on lobbying and diplomacy to convince the US and other members through it, to remove it from the list of “not so good guys.”

In the absence of any visible and concrete measures to mend “structural deficiencies” in AML and CTF, it was widely believed that Pakistan would be blacklisted during its October 2019 plenary at the end of the 15-month notice. Due to its burgeoning debt and shattered economy Pakistan could ill-afford it. Pakistan was shocked when the FATF Asia-Pacific Group put it in the Blacklist in its meeting held in August 2019, when its members found that the country was non-compliant on 32 out of 40 parameters. Islamabad put its diplomatic machinery in action to garner the crucial three votes needed to prevent it from being blacklisted. With China in the chair, Pakistan felt assured of one vote. However, after Beijing agreed to list Masood Azhar as a global terrorist, it was widely believed that it would behave more maturely. But in the end China’s huge investment in Pakistan and the strategic relationship between the two nations tilted the balance in Islamabad’s favour. Ultimately, it succeeded in garnering the necessary three votes and continue in the grey list. Though it noted that Pakistan had addressed only five out of the 27 tasks given to it for AML and CTF, it asked Islamabad to act swiftly and complete the full action plan by February.

Since terrorism is an instrument of Pakistan’s national policy and the real power centre in the country is its Army which uses cross-border terrorism as part of its military strategy, it is well-nigh impossible for that country to divorce itself from terrorism. It once again doubled its lobbying and diplomatic efforts. Prime Minister Imran Khan dashed to the friendly member countries and the USA to garner support. This time it found the  US to be more amenable than before, since it needed Pakistan’s assistance in Afghanistan and Iran. With China and the US on its side, Pakistan took a few measures including the arrest of Hafiz Saeed and custody of Azhar Masood. It got a shot in the arm when, during its three-day review meeting held in Beijing in January, the FATF noted that Pakistan had taken satisfactory steps against terror groups. It evaluated Islamabad’s compliance efforts in relation to AML and CTF as satisfactory. Member countries like the US, UK, Japan, Australia and New Zealand did not raise any concern this time. Pakistan’s game plan of successful lobbying at the cost of compliance was bearing fruit. The logic was simple. It was an election year in the USA and Trump needed Pakistan’s assistance. This appeared to have shaped the US’ stance to go soft on Pakistan during the February plenary in Paris. It accordingly convinced its allies and Pakistan, which was at one time facing the prospect of being blacklisted at the end of the October plenary, now began dreaming of an exit from the grey list also.

India, which knew the ground reality well as it has been the worst sufferer of Pak-sponsored terrorism, including money laundering and financing of the separatist movement in Kashmir, got a rude shock, as it was hoping that Pakistan would definitely be blacklisted. Having understood the US’ game plan, India began to act swiftly to minimise the danger by ensuring that Pakistan did not get off the grey list till its compliance was fully confirmed. New Delhi began to exert its influence to ensure that Pakistan was unable to garner the support of 15-16 member nations needed to remove it from the grey list. It provided dossiers and sufficient evidence to the FATF of Pakistan’s continued involvement in money laundering and terror financing. India was apprehensive that any such decision by the anti-terror body would provide oxygen to terrorist groups, leading to increase in terrorist activities in Jammu and Kashmir and Punjab, where Pakistan is desperately trying to revive militancy.

India keenly participated in the FATF plenary held in Paris which culminated on February 21. In order to ease the pressure on itself from the anti-terror body, Pakistan sentenced Hafiz Saeed for two terror crimes with the sentence to run concurrently a week before the plenary. While the US expressed satisfaction, India questioned Pakistan’s intent by pointing out the timing of the sentence and the fact that it was subject to appeal in the higher court. India also raised questions about Azhar Masood, Lakhvi and Dawood Ibrahim, who continue to enjoy the patronage of the Pakistani Government and roam freely. India also exposed Pakistan’s lie that Azhar Masood was “missing” by providing evidence that he was under Pakistan military’s safe custody at Bhawalpur.

Another area of concern for New Delhi was the fake Indian currency racket being run by Pakistan, as its prime interest is to promote espionage, destabilise the economy and finance terror. Hence, India continued to insist on complete compliance with the FATF action plan.

While Pakistan will aim to exit the grey list at the earliest, India must continue to press for total compliance. Despite, the FATF observing that Pakistan had largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the plan, it decided to keep it on the grey list till June.

India is certainly disappointed with the outcome and Pakistan will take satisfaction from the fact that it has succeeded in avoiding being on the Blacklist. But one thing is certain, its strategy of lobbying at the cost of action has suffered a major setback and it has failed yet again. It will continue on the FATF grey list with its resultant repercussions.  India can heave a sigh of relief for now since Pakistan is unlikely to openly support and promote cross-border terror as long as the sword of FATF continues to hang over its head. However it would continue to fuel unrest and back terrorism clandestinely.

India not only needs to keep its eyes and ears open but simultaneously up the diplomatic offensive against Pakistan to expose it to the international community. The risk of being blacklisted in June may restrain Pakistan to some extent but the prospect of continued support from China, Turkey and Malaysia along with tacit support from the US will encourage it to yet again depend more on lobbying than action. In the ultimate analysis, India will have to sort out cross-border terror from Pakistan on its own.

(Writer: Anil Gupta; Courtesy: The Pioneer)

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