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Pakistan and the FATF: On Borrowed Time?

  • Umair Jamal
  • Sep, 2019
  • 356
  • Terrorism in Pakistan

WHAT ARE PAKISTAN’S OPTIONS AT THE FATF?

This year in the month of June, Pakistan managed to gather sufficient support to avoid being placed on the Financial Action Task Force (FATF) blacklist. The development became possible after Pakistan’s diplomatic push brought on board the support of Turkey, China, and Malaysia. India, with the support of the United States, pushed for Pakistan’s blacklisting.

Pakistan has remained on the FATF’s grey list for allegedly failing to implement strict laws to counter money laundering and terrorism financing. However, the challenge for Pakistan has not subsided yet: The forum has asked the country to implement a number of policies to avoid the risk of scrutiny and harsh judgment in November again.

While authorities in Pakistan are taking the process seriously, for Islamabad the ongoing scrutiny has turned into a political issue. Pakistan sees India’s presence at the FATF as an impediment to its case. In March, Islamabad asked the FATF to remove India as the co-chair of the Asia Pacific Group (APG) to ensure that “[the] FATF process is fair, unbiased and objective.” Clearly, policymakers in Pakistan believe that India and the United States are using their influence and presence at the forum to undermine Pakistan’s case.

For Pakistan’s part, the claims are not devoid of truth. Washington has constantly put Islamabad under pressure for not helping the former in reaching a peace agreement with the Afghan Taliban. Last year, in a letter to Pakistani Prime Minister Imran Khan U.S. President Donald Trump made clear that Islamabad’s assistance was “fundamental” to the health of the two countries’ strained relationship. However, for the United States, Pakistan’s contribution is sought in terms of delivering clear outcomes in Afghanistan that Islamabad shouldn’t be expected to deliver.

Arguably, it’s another policy failure on the part of the United States to expect Pakistan alone to deliver peace in Afghanistan when the Taliban, a major stakeholder, and other political and tribal groups are at loggerheads concerning the future of the country. Islamabad continues to ensure that engagement between various political stakeholders in Afghanistan and the United States remains in place. For example, last week, a group of political heads visited Pakistan to discuss the Afghan peace process. Next week, the president of Afghanistan, Ashraf Ghani, is visiting Islamabad for similar purposes. Regardless of Islamabad’s ongoing engagement vis-à-vis the Afghan peace process, it’s expected that Washington’s opposition at the FATF will continue to frustrate Pakistan.

Moreover, Islamabad believes that the current governing structure of the FATF APG is extremely unfriendly to Pakistan’s interests. For Pakistan, India and the U.S., which form the central body of the APG forum, stand to gain by isolating Islamabad internationally. However, the situation may change with China recently elected to the vice presidential position of the APG forum. China’s position at the FATF can offer Pakistan much needed support and time to implement some of the policies required by the forum.

Arguably, if Pakistan is to fight Indian and U.S. lobbying at the FATF, the country needs to ensure that it doesn’t offer much space to both states at the forum. In this regard, the next few months are going to be very critical for Pakistan when it comes to bridging some of the loopholes in the country’s existing laws. Already, some recent actions related to regularizing of seminaries and blacklisting of various insurgent groups have drawn praise from the global community. None of these actions can be categorized as a reaction to India or the U.S. pressure. In 2014, when Pakistan came up with the National Action Plan (NAP) against terrorism, the regularization of seminaries and action against proscribed organizations was at the top of the agenda. The problem, however, has remained with the timely implementation of these reforms.

The fact that Pakistan is still being pushed at the FATF to do more against terrorism reflects two realities. First, there are loopholes on the side of legislation that should be cleared by Pakistan. Second, India and the U.S. have been able to come up with evidence that has weakened Pakistan’s case at the forum. Islamabad needs to cover that aspect before the November meeting: Pakistan’s economy at this point cannot sustain the shock of a blacklisting at the FATF. Thus, any action Pakistan takes to neutralize opposition at the forum will ultimately be in the country’s own interest.

An active lobbying at the forum with the assistance of China and strong effort to address remaining gaps should be the way forward for Pakistan.

Umair Jamal is a freelance journalist based in Lahore, Pakistan. His research focuses primarily ...

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