By Hiranmay Karlekar
04 March 2017
Pressure from FATF may well have led Pakistan to put restrictions on various terrorist organisations like the JuD and the JeM, but the question is: Will history repeat itself? Given past experience, it is likely that it will
The Financial Action Task Force’s (FATF) notice to Pakistan to demonstrate within 90 days that it has blocked the financial routes to the terrorist organisations Jamaat-ud-Dawa’h (JuD), Jaish-e-Mohammad (JeM) and the Falah-e-Insaniat Foundation (FiF), merits attention. An inter-governmental body, established in 1989, the FATF has developed a series of recommendations that are recognised as constituting international standards for combating money laundering, the financing of terrorism and the proliferation of weapons of mass destruction. These form the basis for a co-ordinated response to these threats to the integrity of the international financial system. First issued in 1990, the FATF recommendations were revised in 1996, 2001, and 2003 and, most recently, in 2012 to ensure that they remain up to date and relevant, and they are intended to be of universal application.
Besides establishing standards, the FATF seeks to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, and proliferation of weapons of mass destruction and “other related threats to the integrity of the international financial system.” Another of its key objectives is to identify countries with significant weaknesses in their anti-money laundering/countering financing of terrorism system (AML/CFT), and work with them to address these.
The current notice is significant because in February 2015, Pakistan’s name was removed from those in the “grey list” of counties. Not only that, a report by Mubarak Reza Khan in Dawn, datelined February 28, 2015, said that the FATF in its decision to this effect, had welcomed the significant progress made by the country in improving its AML/CFT regime and had noted that Islamabad had established the legal and regulatory framework to meet the commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2010.
According to the report, the FATF had further stated that Pakistan was no longer subject to its monitoring under its ongoing global AML/CFT compliance process. Pakistan would work with the Asia Pacific Group as it continued to address both the full range of AML/CFT issues identified in its mutual evaluation report and the full implementation of the UNSC Resolution 1267.
Pakistan’s jubilation over the February 2015 decision proved ephemeral. FATF’s meeting in October 2016 rejected its claims regarding the action it had taken against finances of these terror groups. Despite Pakistan’s protests, it directed its Asia-Pacific Group (APG) to prepare a specific evaluation report on JuD, JeM and FiF. By all accounts, the evaluation report, submitted in January this year, has been severely critical of Pakistan. According to one theory, the slew of measures Pakistan has taken recently is aimed at convincing the FATF of the genuineness of its resolve to combat terrorism.
These include the house arrest, on January 30 of Hafiz Saeed and four of his associates — Abdullah Ubbaid, Zafar Iqbal, Abdul Rehman Abid and Kazi Kashif Niaz — under Section 11-EEE of Pakistan’s Anti-Terrorism Act, which empowers the Government to detain terrorism suspects for up to 12 months. They have also been put in Fourth Schedule of Pakistan’s Anti-Terrorism Act 1997 which includes the names of persons who are activists, office-bearers or associates of an organisation which is under observation or has been proscribed or is “affiliated with any group or organisation suspected to be involved in terrorism or sectarianism”. Those listed face a number of legal consequences like travel bans and scrutiny of assets. Any violation of provision of the Fourth Schedule may result in imprisonment of up to three years and fine or both.
The names of Hafiz Saeed and his four associates have been added to those of 37 others in the list. All of them have to take the Government’s permission before travelling abroad. Pakistan has cancelled the licences of 44 weapons issued to JuD chief Hafiz Saeed and other members of his organisations, citing security reasons. More, JuD and FiF have been officially proscribed under the Second Schedule of the Anti-Terrorism Act of 1997 which provides for keeping under observation any organisation believe to be “acting in a manner that it may be concerned in terrorism.”
The measures listed above were not relevant to meeting the FATF’s requirement which was about blocking the flow of funds to the JuD, FiF and the JeM. It might, for example, have clamped down on the Al-Rahmat trust through which money is funnelled into the JeM, and which openly advertises its bank accounts. It could also have stanched the flow of funds to the JuD. Why has Pakistan’s Government not acted on the financial front and taken the measures it has? One needs to ask this, given the fact that these measures, which should have conveyed a steely determination to deal with the three organisations and their leaders, tend to fill one with a feeling of déjà vu.
Saeed was arrested in 2001, 2002, 2006 and after the terror attack on Mumbai in November 2008. On each occasion, he was out after a short while and back to the business of spewing hatred and organising cross-border terror strikes against India and Afghanistan. Curbs had been announced on the JuD’s activities and funds on several occasions only to have these quietly removed later. The JeM has been formally banned since 2002, but have operated freely since then, training and arming terrorists and sending them across the border to attack targets like the Pathankot air base and army camps in Uri and Nagrota.
The question is whether history will repeat itself. Given past experience, it is very likely that it will. Hence, another question: Why this flurry of action now? One reason can be fear of the Trump Administration which is determined to stamp out the Islamic State and Islamist terrorism, and may not have much patience with Pakistan’s patronage of the JeM and JuD. This pressure from FATF, and genuine alarm at the recent surge of terrorism inside Pakistan, may well have led to these measures and the launch of Radd-ul-Fasaad (Elimination of Discord).
According to a statement by the Pakistani Army’s media wing, Inter-Services Public Relations, it aims at “indiscriminately eliminating residual/latent threat of terrorism, consolidating gains of operations made thus far and further ensuring security of the border.”
Pakistan may well recall that post-9/11, faced with the prospect of severe retribution in case it continued supporting the Taliban, it cooperated with the US just enough to convince Washington that it was on its side. In reality, it played a double game, sheltering the Taliban and Al Qaeda, including Osama bin Laden, and unleashing the Taliban on Afghanistan from 2003 when American resources and attention were diverted to the war in Iraq. Is Pakistan biding its time and will remove all restrictions on the JuD, FiF and JeM as well as Hafiz Saeed and Masood Azhar if the US gets involved in an exhausting war with the IS and Al Qaeda? This may never happen. But that need not deter Pakistan.
Hiranmay Karlekar is Consultant Editor, The Pioneer, and an author