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Pak on FATF Grey list- three edits, June 29, 2018

A self-inflicted wound: Editorial in The Express Tribune, June 29th, 2018.
The decision came late on Wednesday night and by Thursday morning and Pakistan was on the Financial Action Task Force(FATF) grey list following a plenary meeting in Paris. The FATF cannot itself impose sanctions it does not have that power, but countries affiliated with it can and therein lies the danger. The FATF has decided that Pakistan has failed to curb the financing of terrorist groups that operate on its soil, and the pleas of our delegation to the contrary fell on ears that were not deaf but disbelieving. Simply put the members of the FATF who have their own sources of information do not trust Pakistan to be truthful with them. This is not some arcane Indian or American plot this is what a large number of nations around the world believe to be the case.

The ramifications of this decision are going to take some time to play out, and the chances of it being reversed short of some stringent verification are vanishingly small. It is not that Pakistan has done nothing as acknowledged by the FATF itself in 2015, it is more that it is not demonstrating a consistent ‘self-starting’ capacity aside any pressure that may be brought by institutions such as the FATF. It is this laggardly approach to some aspects of the FATF ‘to-do’ list that fuels the mistrust. This is particularly true of the limitations or otherwise placed on banned and proscribed organisations many of which still operate with impunity and the apparent complaisance of the state. There are few if any complaints about the formal banking sector which is robust and well regulated, but the informal channels by which money is transferred are another matter entirely. Although difficult to interdict they are not impervious to surveillance.

There is going to be no immediate effect on the economy but the optics are all negative. If Pakistan fails to satisfy the FATF mutual evaluation then it will be placed on the blacklist, a far more serious outcome that will reach beyond mere embarrassment. This bullet could have been dodged by timely intervention. It was not. The next bullet is going to be deadlier. https://tribune.com.pk/story/1745058/6-self-inflicted-wound/

 

A Warranted Condemnation: edit in The Nation, June 29, 2018
A conclusion that leaves no one surprised, Pakistan has been officially placed on the Financial Action Task Force (FATF) ‘grey list’ despite the rigorous -and a little-too-late- scrambling on the part of the establishment.

The significance of Pakistan of being grey listed (again) with its subsequent impact on the already floundering economy and international diplomatic standing has already been enumerated by analysts and economic pundits, envisaging a divestment of foreign funding, difficulty in international borrowing and accessing international markets. It also gives the antagonized Trump administration full clearance to bear down upon Pakistan and turn full-throttle on mounting international pressure.

While the verdict itself is chastening, the mortification of being grey listed takes on a deeper hue when coupled with the establishment continuing to feign ignorance of the issue at hand. Pakistan needs to stop playing the victim to an imagined international instigation; the FATF listing has by no means blindsided us or overlooked our ‘efforts at curbing terror financing’. It is a warranted condemnation and confirmation of our state policy of turning a blind eye towards militant activity carried out on our soil. Such feigned ignorance is tantamount to sanctioning such perverse groups and their ideologies to the detriment of the sovereignty of our country.

The establishment’s touting of hyperbolic action plans and inflated rhetoric as efforts at clamping down on the problem is roundly refuted by its endorsement of proscribed groups making a reappearance in the political arena in an unchecked bid to contest the elections. With prohibited groups like the MML being able to circumvent the electoral process to field their candidates and propagate their agenda, the similarly banned ASWJ being granted nominations papers mere moments after the FATF verdict and the state kowtowing to a mendacious TLYR, militant ideology is still being mainstreamed and actively condoned. The glaring reality remains that the establishment continues to overlook the repercussions for effectively sanctioning such militant outfits, all for the sake of political expediency.https://nation.com.pk/29-Jun-2018/a-warranted-condemnation

 

FATF’s unwelcome action: Editorial in Dawn, June 29, 2018
IT is no secret that Pakistan was on its way to the Financial Action Task Force’s so-called grey list, but now, after its inclusion, a number of observations must be noted.First, it should be a priority for the Pakistani leadership, which is currently in an indeterminate state with an interim government looking after affairs, to do everything possible to get off the list as soon as possible.It would be a mistake to minimise the impact of FATF’s move, even though Pakistan was previously on the list for three years until 2015 when it was conditionally removed from it.Being put on the list again may not necessarily mean a drastic step as some have imagined it to be, but the country is already in a fragile state vis-à-vis the stability of its external sector and its rapidly dwindling foreign exchange reserves.Raising capital and arranging badly needed inflows will be complicated after this development, which is sure to raise the cost of future money.

Second, it must be pointed out that FATF has made a mistake by taking this step at a time when an interim government is in power in the country.The timing will burnish the impression that the global financial watchdog is responding to geopolitical considerations of other powers, notably those of the US and India, by putting an interim government in the impossible position of answering for policy matters that it does not have a mandate for.The sheer opacity of FATF’s decision-making process does not help matters either. Vague terms have left it impossible to know exactly what steps Pakistan is being asked to implement through its action plan.Third, it is important for the civil and military leadership in Pakistan to understand that business as usual is no longer working.Ordinary citizens, as well as Pakistan’s armed forces, have given tremendous sacrifices in the fight against militant groups. However, more needs to be done to eliminate militancy.

There is little point in passing the laws and regulatory measures required by FATF to shield the country’s financial system from terror financing if groups and individuals known to have been involved in terrorist activity, and designated by the UN as such, are free to roam, organise, solicit funding and get involved in electoral politics.Passing the laws and other subordinate legislation is only the low-hanging fruit on the path to compliance with global concerns when it comes to the misuse of Pakistan’s financial system by terrorist groups.

Generating higher numbers of prosecutions and convictions for terror-financing and money-laundering offences must go hand in hand with sustained action against designated entities.Meanwhile, international bodies must also recognise Pakistan’s successes and help it in its fight against militancy.
https://www.dawn.com/news/1416800/fatfs-unwelcome-action

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