By Sanchita Bhattacharya
July 28, 2015
The Supreme Court (SC) of Pakistan on July 22, 2015, observed that the war against terrorism could not be fought without choking funds to terror outfits. The Court expressed grave concern over the Federal Government as well as the Provincial Governments for their failure to compile the baseline data pertaining to sources of funding of local as well as International Non-Governmental Organisations (INGOs) operating in the country.
Though the Apex Court did not directly blame the Pakistani establishment for involvement in funding terror groups, it is widely believed internationally that Islamabad continues with this policy.
During the Financial Action Task Force (FATF) meet at Brisbane in Australia in June 2015, India had strongly raised the issue of non-compliance by Islamabad on freezing assets of Lashkar-e-Taiba (LeT) and its affiliates. India pointed out that Muhammad Iqbal, the founding member of Falah-e-Insaniyat Foundation (FIF), one of LeT's many front organisations, had been put on the list of Specially Designated Global Terrorists (SDGT) by the United States in August 2014. Iqbal had made the payment to purchase Voice over Internet Protocol (VoIP) used by perpetrators of November 26, 2008, (26/11) Mumbai attacks. According to sources, India with the support of allies included the United States (US), managed to derail China's bid, backed by Australia, to shield Pakistan on the issue of terror financing.
Several countries - including Pakistan's "all weather friend" China; Russia, which in recent times have started moving closer to Pakistan to counter India's perceived improving relations with the US; and Australia - knowingly or unknowingly fell prey to Pakistani propaganda that it was doing its level best and submitting reports to the Asia Pacific Group (APG), which works in collaboration with FATF. Nevertheless, FATF finally decided in Brisbane, supporting India's argument, that, though Pakistan was not part of FATF, it was part of APG, and its enforcement of targeted financial sanctions against terrorism should be subject to monitoring by FATF through APG.
Interestingly, on February 27, 2015, during the FATF meeting at Paris, Pakistan's name was put into the category of "Jurisdictions no longer Subject to the FATF's On-Going AML/CFT Compliance Process". This list included seven countries, including Albania, Namibia, Kuwait, Cambodia, Zimbabwe and Nicaragua, apart from Pakistan. Explaining Pakistan's position, FATF had then observed,
The FATF welcomes Pakistan's significant progress in improving its AML/CFT [Anti-Money Laundering and Countering Financing of Terrorism] regime and notes that Pakistan has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2010. Pakistan is therefore no longer subject to the FATF's monitoring process under its on-going global AML/CFT compliance process. Pakistan will work with APG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report, in particular, fully implementing UNSC [United Nations Security Council] Resolution 1267.
On October 28, 2011, FATF had expressed its disappointment regarding five countries, including Pakistan, stating:
The FATF is not yet satisfied that the following jurisdictions have made sufficient progress on their action plan agreed upon with the FATF. The most significant action plan items and/or the majority of the action plan items have not been addressed. If these jurisdictions do not take sufficient action to implement significant components of their action plan by February 2012, then the FATF will identify these jurisdictions as being out of compliance with their agreed action plans and will take the additional step of calling upon its members to consider the risks arising from the deficiencies associated with the jurisdiction.
On missing the deadline, Pakistan was blacklisted by FATF on February 16, 2012. Later, in June 2012 FATF had reiterated that laws on counter-terrorism financing and anti-money laundering in Pakistan either did not exist or were ineffective. Further, in October 2012, FATF included Pakistan in its Public Statement, underlining continuing deficiencies in its AML/CTF regime.
Pakistan had first been publicly identified by the FATF in February 2008 for deficiencies in its AML/CTF regime. On February 28, 2008, FATF urged Pakistan to continue its efforts to improve its AML/CFT laws to come into closer compliance with international AML/CFT standards and to work closely with the APG to achieve this.
In response to mounting concern over money laundering, FATF had been established by the G-7 Summit that was held in Paris in 1989. FATF is a policy‐making body, whose objectives include setting standards to combat money laundering and the financing of terrorism and supporting implementation of these standards. At present FATF has 36 members (including India) along with two observers. APG is something of a mini‐FATF and is committed to the effective implementation and enforcement of standards set by FATF.
Developments at FATF meets in 2015 clearly indicate that the international community, or at least sections thereof, have either failed to understand the Pakistani design or are willingly attempting to underplay Islamabad's role in international terrorism and its willful failure to apply civilized norms of government and enforcement to curb the menace. This is despite the mounting evidence that nothing has changed on the ground to suggest that Pakistan has stopped the export of terror and the funding of terror groups.
Indeed, as recently as on July 7, 2015, Pakistan's Interior Minister Chaudhry Nisar Ali Khan gave a clear indication to the Upper House (Senate) of Pakistan's Parliament that JuD, the "public face" of LeT, was unlikely to be banned and that, "JuD has been on observation under Section 11 D of the Anti-Terrorism Act (ATA) 1997 since 15 November, 2003. The activities of JuD are monitored by law enforcement agencies and if report of any of such activity (having connection with LeT) that fulfils requirement of Section 11 B of ATA was presented, the organisation shall be proscribed." Section 11 B of ATA 1997 provides for the proscription a terror organisation, while Section 11 D is meant to keep organisations under observation where the Federal Government has reason to believe that an organisation is acting in a manner that suggests it may be linked to terrorism.
Crucially, JuD has been designated a terrorist organisation by the US, UK, the European Union, Russia, Australia and, of course, India. JuD's 'chief' Saeed, the mastermind of the 26/11 attacks in Mumbai, openly engages in the collecting funds to carry out his 'charity work' - and the organisation is widely acknowledged as a front of LeT. Despite international exposure and opprobrium, the Pakistani Government continues to contribute to his various 'charities'. The Pakistan Muslim League-led Punjab State Government, for instance, has long provided financial support to JuD for its 'welfare' activities. A grant-in-aid of PKR 61.35 million was given to the administrator of the group's training camp Markaz-e-Taiba in the Provincial budget for fiscal year 2013-14. The budget also included an allocation of PKR 350 million for a knowledge park at Muridke - JuD's headquarters - and various other development initiatives across Punjab.
On March 25, 2015, Indian Minister of State for Home Haribhai Parathibhai Chaudhary informed the Lok Sabha (Lower House of Indian Parliament) that Pakistan, through its Inter-Services Intelligence (ISI) continued to aid terror activities in India by providing shelter, training, patronage and financial assistance to terrorists.
Meanwhile, Pakistan continues to pump increasing volumes of Fake Indian Currency Notes (FICNs) into India and its neighbourhood in its campaign to provide finances for Islamist terrorists, and to destabilize the Indian Economy. According to a July 2014 report quoting the Intelligence Bureau (IB), Sri Lanka and Maldives have been identified as two new transit destinations for FICN, with Chennai in Tamil Nadu as the point of arrival. An unnamed IB official stated, "Until now, FICN was known to come from Bangladesh and Nepal. The addition of two more neighbours to this list is rather worrying." Moreover, the ISI-run mafia engaged in production of FICN has altered patterns of circulation, increasingly emphasizing lower denomination notes, INR 500 and below, as compared to an overwhelming flow of INR 1,000 notes in the past. According to a report by the Central Economic Intelligence Bureau (CEIB), "Pakistani operators based in Nepal, Bangladesh, Malaysia and Thailand act as recipients of FICN from Pakistan as well as conduits to the distribution channels in India through air and land border."
Under the circumstances, the apparent eagerness of several members of FATF, and of the organisation itself, to let Pakistan off the hook is certainly surprising. In the present and deeply unstable regional and international environment, it would have been expected that the most stringent standards would have been imposed on suspected state sponsors of terrorism - a status that few in the global community could honestly deny to Pakistan.
Sanchita Bhattacharya is a Research Associate, Institute for Conflict Management
Source: South Asia Intelligence Review