There is no way around complying with FATF directives. After the latest plenary held in Paris last month, the pressure is on Pakistan to take action on the to-do-list by May. (For this column’s running coverage on FATF, read “FATF: do more?” published January 14, 2019; “FATF: Us against the world?” published February 26, 2018; and “FATF: some reprieves,” published July 2, 2018)
FATF’s latest review says that Pakistan has made “limited progress” in the last year, specifically on “operationalising the integrated database for its currency declaration regime” and revising its “TF (terrorist financing) risk assessment”. The Paris-based AML/CFT watchdog has again issued a ten-point list of actions. Those are mainly TF-centric deficiencies linked with militant organisations and “affiliated” individuals, illicit currency movement, and federal-provincial coordination.
The sore point remains enforcement on the ground. Progress needs to come in the areas of identification, investigation, prosecution, and sanctions of AML/CFT violations by individuals and organisations. Now Pakistan only has a couple of months to show progress – an arguably short timeline to turn things. But that’s the way it is, unfortunately.
The recent face-off with India will likely makes it more difficult for the state to show administrative and prosecutorial action against banned outfits, some of which India is particularly up against at diplomatic fora. But thankfully, something is afoot. This week, several news reports have quoted highly-placed government sources suggesting that a stern approach is in the works towards militant outfits on this soil.
For Pakistan, it is a difficult but the right thing to go after non-state actors. Be careful with the optics, though. Among the public and within the institutions, the potential crackdown must be sold through a narrative that these actions are about putting Pakistan above the interests of non-state actors, who have on several past occasions brought Pakistan and India to the brink of full-scale war.
It will help if the civil and military leaderships both remain committed to confront this challenge head on and without delay. Both leaderships have recently gained significant reputational capital to go through a tough drive at home. Critics may argue that high-level political commitments to put own house in order have come and gone before but with limited effect. Will this time be different?
Most likely, yes! Previously, the global community used to work with Pakistan to placate India’s concerns over alleged militant networks here. Now the global community itself, under FATF’s, has Pakistan on the receiving end, with the threat of blacklisting it by September if sufficient progress is not made. It is time that the concerned authorities go all the way in dismantling the finances and operations of troublemakers.
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