The FATF challenge

The US moved forward a motion to place Pakistan on the terror financing watch-list, backed by the United Kingdom, France and Germany, a week ago, according to Miftah Ismail, Advisor to the Prime Minister on Finance, Revenue and Economic Affairs with the status of a federal minister to a foreign news agency. Ismail, currently in Europe, further stated that "we are now working with the US, the UK, Germany and France for the nomination to be withdrawn." If Pakistan is unable to avert this move it would be the second time that the country would be on this list. On 27 February 2015, the Financial Action Task Force (FATF) declared Pakistan, on the watch list since 2012, as no longer subject to its ongoing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT).
Be that as it may, the government, seeks to defuse the fallout of this extremely disturbing motion by synchronising the domestic law with our international obligations. Consequently, it has banned the remaining proscribed organisations through a presidential ordinance and the cabinet approved a very comprehensive Anti-Terrorism (freezing and seizure) rules last Monday which were processed by the Ministry of Interior and vetted by the Law and Justice Division.
Pakistan is a member of the Asia-Pacific Group on Money Laundering set-up, as per the website "to ensure the adoption, implementation and enforcement of internationally accepted anti-money laundering and counter-terrorist financing standards as set out in the (FATF) Forty Recommendations and FATF Eight Special Recommendations. The effort includes assisting countries and territories of the region in enacting laws to deal with the proceeds of crime, mutual legal assistance, confiscation, forfeiture and extradition; providing guidance in setting up systems for reporting and investigating suspicious transactions and helping in the establishment of financial intelligence units."
An anti-money laundering act was introduced in Pakistan in 2010 and revised in 2016 with Ishaq Dar, the then functional finance minister considered the architect of the revision, setting up a seven-member National Executive Committee under his own chairmanship with three federal ministers as members as well as Governor State Bank and Chairman SECP with the authority to "issue necessary direction to the agencies involved in implementation and administration of this Act." No member of any agency involved in the implementation of this Act was a member of the NEC. This prompted criticism that the AML/CFT Act was designed to be under the country's political leadership as opposed to that of the implementing agencies.
During the past four and three quarter years of the PML-N administration there has been considerable concern over the extent and scale of money laundering from Pakistan. Properties in Dubai worth hundreds of billions of dollars have been bought by Pakistani nationals during these years, the Swiss accounts held by Pakistanis are massive as revealed by credible sources and, last but not least, the former Prime Minister of this country Nawaz Sharif is currently defending the charge of massive money laundering in an accountability court. All this points to a very loose mechanism for curbing money laundering. Given this background it is little wonder that the US, the UK, France and Germany are seeking to place Pakistan back on the watch list - an extremely disturbing prospect.
To make matters worse, a former President and CoAS and some others have been defending internationally proscribed entities in Pakistan. Such statements undermine international acceptability of our narrative. Pakistan's narrative (with the civilian and the establishment on the same page) we are a victim as opposed to a perpetrator of terror, and we do not distinguish between good and bad terrorists. There is an urgent need for the civilian and military leadership to reevaluate this narrative, to conclude all ongoing domestic cases of money laundering, and to change domestic laws that would enable and strengthen the capacity of the implementing agencies to proactively investigate money laundering by Pakistani nationals outside the country irrespective of their clout domestically.