China opposes using FATF for political purposes to pressurise Pakistan

BEIJING: China on Tuesday once again supported Pakistan’s anti-terror financing efforts, after the Financial Action Task Force (FATF) decided to place Pakistan on the grey list.

“We also oppose the use of FATF as a political measure to put pressure on Pakistan,” China’s Foreign Ministry spokesperson Geng Shuang said during a press briefing.

The spokesperson asserted that all parties should objectively and fairly consider Pakistan’s anti-terrorism efforts instead of simply blaming the country.

“In recent years, Pakistan has actively taken a series of measures to strengthen financial regulations and crackdown on terrorist financing and made important progress,” he added.

Shuang said, “The Pakistani government and people have made tremendous efforts and made great sacrifices for the international anti-terrorism cause.”

Responding to a question whether China is not entirely sure of Pakistan’s efforts in combating terrorist financing, the spokesperson repeated that as an all-weather strategic partner, China and Pakistan will continue to enhance coordination and cooperation on counterterrorism.

Some international media reports had earlier suggested that China this time around refused to bail out Pakistan at the FATF meeting. However,the spokesperson said both countries have a very strong relationship.

Financial Action Task Force correctly faults Pakistan

What does an ostrich do when it feels threatened? It hides its head underground! The ostrich feels that by not looking at it, the threat will go away.

It was no surprise then to see Pakistani ostriches — locally known as policymakers — bury their heads underground as they waited for the shrill threat of being grey-listed by the FATF to pass them by.

In the aftermath of this FATF grey-list fiasco, our government has once more cemented the fact that Pakistan has become a case study in how not to run a country’s fiscal, internal and foreign policy.

Once again, we watched as our policymakers instead of coming up with a solution themselves, looked towards China, Saudi Arabia and Turkey to help in extinguishing the fire, which such a placement signalled in the international arena. Our “ allies” kindly obliged, only for our not so prudent foreign minister, interior minister and adviser on finance to tweet away that support and help by breaking confidentiality of closed-door meetings.

Pakistan has previously been placed on the FATF watch list from 2012 to 2015. This was due to its failure to pass the Anti-Money Laundering and Countering Financing of Terrorism Act. In 2015, Pakistan passed the law and was removed from the FATF list. However, no serious action was taken against those groups and individuals designated as terrorists by the UN. This meant there was no catching or curtailing of UN-designated terrorists and financing entities (even if Pakistan had reservations) like Lashkar-e-Taiba (LeT), Jaish-e- Mohammed (JeM), Hafiz Saeed and associated financial ‘charities’. The half-hearted measures taken were again an invitation for the FATF to put Pakistan on the watch list.

Over half a century of blundering has come home to roost. A consistent ostrich-like attitude has remained prevalent in policy formulation since 1963 once the US had decided that Pakistan and its worldview were different. The progressively changing international environment for the past 54 years has always been seen in a short-sighted, almost cavalier manner by Pakistan’s national security and foreign policymakers. Not good when we have to contend with Trump’s USA and how Pakistan is in its cross hairs although it can be argued that it was not any different during Obama’s time in office.

In the last week of August 2017, an embarrassing financial shock hit Pakistan’s premier Habib Bank Limited’s New York branch. The US authorities cited the bank branch for money laundering to a “good guys” list which included identified terrorists, illicit arms dealers, Iranian oil shippers and a money transaction business with Saudi Arabia’s private Al Rajhi Bank which had dealings with al Qaeda affiliates. What was truly disturbing was the citing of HBL’s failure to adequately identify, as per law, the Saudi bank’s politically exposed customers belonging to Pakistan’s dynastic ruling family. HBL resultantly had to close its US operations and pay a fine of $225 million (negotiated downwards from an initial $630 million).

The FATF had cautioned Pakistan in February 2017 and again in November 2017 during its International Cooperation Review about its support to LeT, JeM and Jamatud Dawa(JuD). Apparently these notices were also swept under the carpet.

In spite of FATF warnings and even private advice by its ‘friends’, the statements given by government officials have been nothing short of baffling. One minister retorted by saying that Pakistan had been on the FATF watch list till 2015 and despite that its economy grew. Another stated that Pakistan had taken many steps for checking terror financing and was winning the war against terrorism. Some even interpreted the three-month respite given by the FATF till June as a victory. However, facts on the ground belie these claims.

The armed forces and other law-enforcing agencies have undertaken meaningful kinetic operations. These operations have been very successful but are only one small part of the definitive solution to finish off the existential threat faced by the terrorism scourge. The Anti-Extremism bill is still stuck in the National Assembly because there seems to be a power struggle between the defence and interior ministries as to which should ultimately be in charge of its implementation. The National Action Plan (NAP) made with such fanfare after the Peshawar school massacre in 2014 remains similar to its acronym, “napping”. Out of NAP’s twenty points unanimously approved by all political parties, only two points relating to military action have been achieved. The rest of the eighteen points which require legislation, governance, financial oversight (exactly what the FATF has caught Pakistan for), madrassa regulation, etc, are all lost in oblivion. The National Counter Terrorism Authority (Nacta) is the fulcrum for Pakistan’s anti-terrorism policy. It is also point 4 in NAP. That Nacta remains a mere point in NAP and nothing more.

What the (in) action of our government shows is ineptitude and lack of seriousness with regard to tackling the terrorism issue. Pakistan is a country beset by terrorism of all shades but has yet to agree on a definition of ‘terrorism’ across all parties.

The government seems to be fighting a war against its own judiciary, financial accountability mechanisms, law enforcement agencies and military, there is little wonder that terrorists (morphed from criminals, thugs and religious zealots) will continue to have a field day. The question really to be asked is, given our internal lack of governance, lack of foreign policy and corruption-ridden fiscal policy, why are our government officials baffled when the rest of the world does not believe our narrative on terrorism?

Jolts like being placed on the FATF’s grey list will continue with many more to come especially if we have a financial system only catering for certain groups or families to take the people’s national treasury abroad illegally and preachers of religious violence like Khadim Rizvis and Tehreek-e-Labbaik Ya Rasool Allah being mainstreamed and given electoral space.

The consequences that Pakistan faces due to this drift in its fiscal, internal and foreign policies are disastrous to say the least. Pakistan’s friends are in a quandary as we continuously place them in awkward situations. China has now to see first whether it can withstand economic pressure on its multi-trillion dollar business in the West.

Saudi Arabia has had to be placated by the deployment of our troops, about whose strength and role the defence minister has refused to brief parliament about. Turkey is stuck in Syria and seems to be replaying the history of what happened in Afghanistan when its neighbours helped its people with good intentions.

Postscript: Pakistan’s argument of respect and recognition for its sacrifices in the war against terror must be restructured. As it stands, the world does not believe in Pakistan’s narrative. Even its closest allies counsel privately on this. It is imperative that the policymakers and public intellectuals in this country realise that if Pakistan does not wrap up or reorient the internal circus that plagues it, then the doors of our allies will also close — CPEC or no CPEC.

FATF: what next?

Is the noose really tightening around Pakistan? At the Financial Action Task Force (FATF) plenary last week, the country was squeezed by the Western block, even as its traditional allies seemed to withhold their support. The FATF has reportedly given Pakistan until June to agree to an action plan to weed out FATF objections, which, by the way, remain unclear as yet. (Read “FATF: Us against the world?” published February 26, 2018, for some background).

Instead of calming the public, the government’s silence is disturbing. Only the PM’s finance advisor went on-air last weekend and suggested that Pakistan might be put on a black-list – which has other pariah countries like Iran and North Korea on it – if an action plan was not agreed to by June. While that’s hardly reassuring, it is pertinent to ask: what will Pakistan do now? But first, let’s analyze what Pakistan is currently doing.

One may wonder why the government went about overplaying the fears when it could hurt its ability to raise foreign financing in precarious balance of payment situation. The question is: when the official FATF communiqué was silent on Pakistan, why was Miftah Ismail the first one to break the news of chances, albeit low, of Pakistan entering the black list? This is surely not the norm of PML-N when it’s dealing with a crisis.

Internationally, US might be over hyping the issue as the world giant exercises its political clout on Pakistan to run policies in Afghanistan aligned to US interest. As the US demands are in the military domain, and since the weakened civilian authority doesn’t have much say in that, the PML-N leadership might not be afraid of portraying an extreme scenario.

News reports suggest that Pakistan’s non-compliance is mainly on the issue of charities run by Hafiz Saeed. Since the interests of Hafiz Saeed and company are allegedly in Kashmir, the linking of his charities to the issue of financing of terrorism could be an objection from India.

However, the general perception of US unhappiness towards Pakistan is on Afghanistan and there is confusion on what Pakistan can do to appease US by having strict AML/CFT prosecution on Hafiz Saeed and company.
Barring US-India confusion, the more important point is whatever steps are required on AML/CFT in Pakistan or other hidden agendas are in the domain of the military, but the music is being faced by an elected, civilian government, which would no longer be in power in June.

Right now, it isn’t clear whether the state is tight-lipped or just clueless about what to do next or who should handle this? There is a crisis of leadership at home which is affecting the country’s affairs at home and abroad. Though it’s only a few months, the journey to June will be a long one. Amid considerable tension among state organs, it will be hard to discuss, leave alone develop consensus to resolve militancy-related issues.

Also note that the country is due a democratic transition midway through this year. As things stand, the ruling party is gasping for breath. There are dark clouds hanging over democratic continuity. If the PML-N retires on time, that will leave a caretaker government to plead Pakistan’s case to the FATF in June. But before that, it is unclear who will lead the charge in deciding Pakistan’s response vis-à-vis the upcoming FATF review. It is not enough for the government to simply blame India and the US for Pakistan’s FATF woes. With a belligerent US upping the ante, will Pakistan find enough international support to counter the American pressure next time?

The all-weather friend China may continue to face difficulties in supporting Pakistan at forums like the FATF. China wants to be seen as a responsible global power that abides by international rules. That reality should prompt a review in Pakistan’s foreign policy choices.

Facing tough odds, Pakistan will do better to stay calm and not react to the frenzy. Already, political and economic uncertainty is increasing. There is homework to do.

On one hand, the country needs to take remedial steps to be on the right side of the global community. And on the other, a renewed diplomatic effort is required to convey Pakistan’s progress to influential world capitals. In the meantime, deft economic management is required to shield the country’s growth momentum from disruption. But will there be a steady hand at the wheel?

Government confirms Pakistan will be placed on terror financing ‘grey list’ in June

Ending a nearly week-long confusion over Pakistan’s placement on a ‘grey list’ of the Financial Action Task Force (FATF), the Foreign Office confirmed on Wednesday that the country is set to be added to the watchlist of countries where terrorist outfits are still allowed to raise funds in June.

Speaking at a weekly news briefing, FO spokesman Dr Muhammad Faisal revealed that a decision to place Pakistan on the watchlist was taken at the FATF plenary held in Paris last week. He, however, ruled out the possibility that Pakistan could even be placed on the international watchdog’s blacklist over a lack of compliance.

“Pakistan will be placed on the [FATF] ‘grey list’ in June, but there is currently no chance of [its] placement on the blacklist,” the spokesman said, adding that Pakistan will cooperate with FATF in every possible way.

An action plan to eradicate terrorist financing is being prepared and will accordingly be shared with the international body, he said.

According to Dr Faisal, the FATF has asked Pakistan to take additional steps to curb money laundering and terror financing.

He said Pakistan has already taken steps to remove the deficiencies in these areas and cited the presidential ordinance that was quietly passed days before the FATF plenary to amend the anti-terror legislation in order to include all UN-listed individuals and groups in the national listings of proscribed outfits and persons.

All matters related to FATF will be dealt with by the finance ministry, the FO spokesman said, adding that all matters relating to the terror financing issue except for press releases are of a “sensitive nature

Can’t say China didn’t support Pakistan in FATF meeting, says envoy

ISLAMABAD: Chinese Ambassador to Pakistan Yao Jing on Tuesday said he can’t say that Beijing did not support Pakistan in Financial Action Task Force (FATF) meeting during which the US moved a motion to put Pakistan on ‘grey-list.’

While addressing a seminar on Challenges and Opportunities facing Shanghai Cooperation Organization, the envoy said he does not know yet what happened in Paris as it is a very technical issue.

“China has always praised Pakistan’s efforts against terrorism and extended its full support at every forum,” he asserted.

The week-long FATF meeting was held to decide on the US-led motion seeking to put Pakistan on its ‘grey-list’ for not taking concrete measures against terror finance.

Despite claims of Indian media, FATF has not mentioned such move against Pakistan in its statement issued after the meeting. Pakistani officials stated that country has been given three-month breather to take essential measures to avoid action.

Meanwhile, Chinese foreign ministry’s spokesperson also said that China highly valued Pakistan’s active measures to strengthen financial supervision and crack down on terrorist financing.

He asked the international community to view objectively and evaluate Pakistan’s efforts in the field of international anti-terrorism instead of accusing Pakistan of bias with prejudice.

“Pakistan has taken active measures to strengthen financial supervision and crack down on terrorist financing and made important progress. China gives high recognition to this,” Lu Kang said during his regular briefing while responding to a question asked by the APP Correspondent.

“We hope all concerned parties in the international community can give an objective and fair assessment of this,” he added.