Pakistan is looking up to China, Malaysia and Turkey again to help it wriggle out of the grey list of the Financial Action Task Force (FATF). Having failed to fully implement an action plan to tackle terror funding as it’s time for the FATF to assess its case in October, Pakistan is left with no other saviour, sources familiar with developments said today.
Ahead of the FATF working group and plenary meetings between 18 and 23 October, the Asia-Pacific Group (APG), a regional affiliate of the multilateral watchdog, reviewed the actions of Pakistan in countering terror financing and money laundering for terrorists at a virtual meeting on 15 and 16 September. China expectedly backed Pakistan’s actions to counter-terror financing in the course of the meeting despite the fact that Islamabad is yet to fully deliver on 13 of the 27 points in the action plan, the sources said.
When Yao Jing, China’s outgoing ambassador to Pakistan, made a farewell call on the de facto finance minister Abdul Hafeez Shaikh in Islamabad on 17 September — a day after the APG meeting — he expressed via an official statement “his confidence that FATF’s October review will go well for Pakistan”. “Pakistan will again be looking at China, Malaysia and Turkey to back it at the FATF plenary meeting as the support of only three members is enough to thwart any planned action,” said a source.
Malaysia became co-chair of the APG in July while Australia is the permanent co-chair and host country for the regional body.
Whereas relations between India and Malaysia had soured under former Prime Minister Mahathir Mohamed, the new government formed after his resignation has been working quietly to improve ties with New Delhi, the sources noted.
Ahead of the FATF plenary meeting, Pakistan will have to submit a progress report by 30 September. However, on 28 July, Pakistan’s Financial Monitoring Unit (FMU) director-general Lubna Farooq told a parliamentary standing committee on finance and revenue that the country had complied with only 14 of the 27 points in the action plan while stakeholders “were working on the remaining 13 action points”.
Pakistan had, the sources said, resorted to its usual tactic of some high-profile actions in the run-up to the FATF plenary to create the impression that it was delivering on its counter-terror financing commitments. For instance, an anti-terror court in Lahore indicted four leaders of the banned Jamaat-ud-Dawah (JuD), including Hafiz Saeed’s brother-in-law Abdul Rahman Makki, in four more cases last week.
A joint session of the parliament of Pakistan, meanwhile, passed three bills aimed at implementing commitments made to FATF last week. At the same time, it tightened curbs on eight Lashkar-e-Taiba (LeT) leaders, including Hafiz Saeed, Jaish-e-Mohammed (JeM) chief Masood Azhar and Dawood Ibrahim by taking steps in August to enforce United Nations’ (UN) sanctions against them.
As of now, the sources said, Pakistan was unlikely to be moved from FATF’s “jurisdictions under increased monitoring” or the so-called “grey list” to the “high-risk jurisdiction subject to a call of action” or “black list”, despite mounting frustration among the watchdog’s members over its repeated failure to deliver on the action plan.
The statement issued after FATF’s plenary in February reflected this frustration: “All deadlines in [Pakistan’s] action plan have expired. While noting recent and notable improvements, the FATF again expresses concerns given Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the (terror financing) risks emanating from the jurisdiction.”