All Eyes On China As Pakistan Comes Under FATF Scrutiny
China holds the current FATF presidency and all eyes will be on Beijing, Pakistan's all-weather ally, after Xi and Modi focused on terror financing at the informal summit. At the June FATF meet, Pakistan secured the three needed votes of China, Turkey and Malaysia to avoid inclusion in a blacklist
PARIS: Beijing's stand on Islamabad would take centre-stage at the six-day Financial Action Task Force (FATF) plenary meeting, which is being held in Paris in the backdrop of this weekend’s second informal summit between PM Narendra Modi and Chinese President Xi Jinping. At the Mamallapuram summit held on the eve of the FATF meet beginning Sunday, Xi is understood to have recognised the importance of working together to ensure that the international community strengthens the framework against training, financing and supporting terrorist groups, and on a non-discriminatory basis.
China holds the current FATF presidency and all eyes will be on Beijing, Pakistan’s all-weather ally, after Xi and Modi focused on terror financing at the informal summit, sources said. Xiangmin Liu from China is the current FATF president, having taken over from Marshall Billingslea of the US earlier this year. "We both agreed that it was important to deal with the challenges of terrorism and radicalisation in an increasingly complex world, and where our own societies were diverse,” Foreign Secretary Vijay Gokhale told the media at the end of the two-day talks at Mamallapuram. "Both are leaders of countries that are not only large in terms of area and population, but also in terms of diversity."
At the June FATF meet, Pakistan secured the three needed votes of China, Turkey and Malaysia to avoid inclusion in a blacklist. But Pakistan has fared poorly in the recently released report of FATF’s Asia Pacific Group on terror funding. This report strengthens India's case for the FATF plenary in Paris, officials told ET. The Asia Pacific Group on Money Laundering (APG) recently made public its report on money-laundering and terror-financing in Pakistan. The FATF-APG report had 10 parameters for 'Effectiveness and Technical Compliance Ratings' and 40 for 'Technical Compliance Ratings'.
Of the 10 effectiveness ratings, Pakistan was found "low" in nine areas and "moderate" in one. Of the 'Technical Compliance' parameters, the country was found "compliant" in only one, "partially compliant" in 26, "largely compliant" in nine, and "non-compliant" in four. The 228-page report titled "Mutual Evaluation Report 2019" will be one of the yardsticks for the scrutiny at the Paris meeting.
"With the exception of some recent actions…, Pakistan has not taken sufficient measures to fully implement UNSCR 1267 obligations against all listed individuals and entities - especially those associated with Lashkar-e-Tayyiba (LeT)/Jamaat-ud-Dawa (JuD), and Falah-i-Insaniat Foundation (FIF) as well as the groups' leader Hafiz Saeed," the FATF-APG report said.
The report further said: "Despite being listed by the UNSCR 1267 Committee in 2008 (JuD) and 2012 (FIF), before February 2018, JuD/FIF openly operated in Pakistan, including holding public rallies and fundraising events. Numerous Pakistani media reports showed FIF raising funds ostensibly for humanitarian relief, as well as operating a large ambulance fleet, which calls into question whether the prohibition on providing funds and financial services was being fully implemented." The report also questioned decisions of the Pakistani establishment that reportedly did not take the actions to their logical conclusions.
"In February 2018, Pakistan passed the Anti-Terrorism (Amendment) Ordinance 2018, which amended the ATA to automatically proscribe individuals and entities listed at the United Nations. Immediately, following the adoption of this amendment, Pakistan seized numerous articles of property belonging to JuD/FIF, after minimal actions had been taken prior to this point."
"However, the ordinance's duration was limited to 120 days (and is thus expired) and was not renewed or permanently adopted into law. It is not clear why Pakistan decided to make UN-designated entities automatically proscribed for 120 days given that during the onsite visit, authorities stated that this Ordinance was never necessary in order to implement Pakistan's UNSCR 1267 obligations. Pakistan's recent efforts to fully implement UNSCR 1267 against JuD/FIF were further challenged by a Lahore High Court interim order in April 2018, which prevented the authorities from interfering with the "charitable institutions" of JuD/FIF, despite their status as UN-listed organisations."
On August 22, the APG had placed Pakistan in the Enhanced Expedited Follow-Up List (blacklist) for its failure to meet the set standards.
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