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International Law

Financial Action Task Force (FATF)

Asfandiyar Khan

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FATF is an independent and inter-governmental organization, which was established in 1989 by G7 countries (UK, France, United States, Germany, Canada, Italy, and Japan) .It is formed by the governments for the governments. This organization develops and promote policies to protect the global financial system against money laundering and terrorist financing and the financing of proliferation of weapons of mass destruction. This organization have total 39 member countries and headquarter is in Paris, France(International Standard/FATF/Combating terrorism, 2012-2019)This organization observing all the countries of the world regarding money laundering, terrorist financing and proliferation of weapons of mass destruction according to its own standards and rules. Whenever a country found involved in one of these type of activities FATF takes very strong steps against that country. FATF have two types of lists, one is “Gray list” and another is “Blacklist”. Whenever a country pushed in one of these list so its economy suffer a lot. Now recently Pakistan is in the Gray list. According to Foreign of Pakistan, “Sha Muhammad Qureshi”, Pakistan losses annually $10 billion due to its existence in the Gray list. Now Iran and North Korea are in the Black list of FATF. In collaboration with other international stakeholders, the FATF also works to identify the national-level vulnerabilities with the aim of protecting the international finance system from misuse.

Background of the FATF

Related threats to the integrity of the international financial system FATF was established in 1989 by the ministers of its member jurisdiction. The only purpose was to keep and control money laundering, terrorist financing and financing for the weapons of mass destruction. In the early stages FATF was only for the black money-those money which was producing from drugs and other illegal activities then the 9/11 attacks changed its priorities and dimensions. FATF jurisdiction extended over other types of activities also, like Terrorist financing, money laundering and financing for weapon of mass destruction. The threat posed to the banking system, G-7 Heads of the states or government and European commission convened the Task Force from the G-7 member states, the European commission and eight other countries (FATF.org.history, 1989-2019).

Recommendation of FATF

In order to combat money laundering, terrorist financing and financing for weapons of mass destruction FATF have set up a comprehensive recommendations and consistent framework of measures which countries should implement. Every country have diverse legal, administrative and operational frameworks and different financial system and so cannot take all identical measures to counter these threats. The FATF Recommendations, therefore, set an international standards, which countries should implement through measures adapted to their particular circumstances. The FATF Recommendations set out the essential measures that countries should have in place to:

-Identify the risks, and develop policies and domestic coordination;

-Pursue the money laundering, terrorist financing and the financing of proliferation;

-Apply preventive measures for the financial sector and other designated sectors;

-Establish powers and responsibilities for the competent authorities ( e.g., investigative, law enforcement and supervisory authorities ) and other institutions measures;

-Enhance the transparency and availability of beneficial ownership information of legal persons and arrangements; and

-Facilitate international cooperation.

Pakistan on FATF Gray List

The international watchdog against money laundering and financing of terrorism, the “Financial Action Task Force” has put Pakistan on a list of “jurisdiction with strategic deficiencies”, also known as the gray-list. The Financial Action Task Force has decided in principle that Pakistan will remain on its gray list till next February and directed Islamabad to take ‘extra measures’ for complete elimination of terror financing and money laundering. The reason is according to “FATF” Pakistan have structural deficiencies in anti-money laundering (AML) and combating financing of terrorism. There are also countries in the FATF’s gray-list: Ethiopia, Serbia, Sir Lanka, Syria, Trinidad, and Tobago, Tunisia and Yemen. This is not the first time Pakistan has found itself on one of FATF’s list- the country was there in 2008 and from 2012 to 2015 and now again in 2018 (Khan, 2019).

It is “highly probable” that Pakistan will be formally black listed by global terror funding and money laundering watchdog FATF if it does not swiftly act against terror funding by February 2020. The Paris based FATF took the decision after its five day plenary, which concluded in the French capital.

“FATF” Implications on Pakistan

Financial Action Task Force (FATF) may put at risk the impending $6 billion IMF bailout- because this organization have very strong coordination with the economic institution like, IMF, World Bank etc. whenever a country don’t comply and don’t take cautious and precious steps regarding terrorist financing, money laundering and financing for weapons of mass destruction according to the FATF recommendations and FATF international standards so that country could involve in economic difficulties. The same case is with Pakistan, Iran, North Korea, Sri Lanka, Ethiopia, Serbia etc (Dhawan, jun 20, 2019).

Pakistan would get loans costlier, with higher interest and with strict conditions. Because “FATF” have very strong coordination with other Economic institutions, they tell them that this country is not safe for loans. May be your loans go in the wrong hands. Whenever a trust-deficit creates between the FATF and a country that’s creates a lot of economic problems to that country. This is the institution that give advises and recommendations to other economic institutions regarding a country economic situation and circumstances. This is very influential inter-governmental organization.

When a country come in “FATF” gray list that country couldn’t take loans easily, the rating and borrowing capacity goes down. The most important thing that investors don’t come to that country which happens in “FATF” gray list. Those countries if want international transactions it takes long time and scrutiny also increase and it does business loss. According to Foreign Minister of Pakistan “Sha Muhammad Qureshi” that due to the existence of Pakistan in gray list of “FATF” Pakistan annually loses $6 billion.

There is also another list with “FATF” that is called “Blacklist”, this very crucial and danger list. If Pakistan were pushed in the Blacklist so the $6 billion “IMF” bailout package would be cancelled and the government of Pakistan would more suffer from economic problems and will get corner on international level. With this inflation would increase, unemployment etc. The proposal was put by the United State of States of America, UK, and France against Pakistan. They claimed that Pakistan should put in the FATF blacklist but so far they didn’t succeed because of Turkey, and Malaysia support in the voting the request was rejected.

International Law

Transition of Balance of Power from Unipolar to Multipolar World Order

Fatima Arif

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The international system may be described as a complex system of social, scientific, political, military and technological systems. This dynamic structure is very difficult to evaluate and it is even more difficult to predict its future.

The distribution of power potential in the international system defines the number of major powers and thus the international system’s polarity. The system would be multi-polar if the great powers are more than two; if they are two it would be bipolar and systems with only one great power are called unipolar.

It can be expected in the future multipolar world that the global economy does not settle with a couple of significant nations but rather with multiple nations of varying capabilities. In the limited arena of affairs pertaining to their country, each state with its particular notable qualities will have decisive say. Beyond the US, Japan, China, the EU, and India are capable of economic influence due to their advancements in technology, increasing economy, and large population base. Iran, Saudi Arabia, Venezuela, African Union countries and Brazil will have an impact, owing to their large energy reserves. Russia should have preferences for both. Because of their geostrategic location such as Pakistan, Central Asia, Ukraine and Turkey, a few nations will have some regional influence because these nations are situated on the energy routes from which energy resources would be on route to other parts of the world.

United States and the Changing World Order

There is a broad bipartisan consensus within US political leadership that the country must remain a global leader / world leading power. This assumption in its re-eminence also comes with the fundamental underpinnings that the United States will lead the world to freedom and liberty. Its third term is resolve to contain China.

It’s troubling to what extent the US continues to pursue China’s containment. The’ democracy alliance’ or the’ pivot to Asia’ are examples of US designs. China too, because of its part, diverted from the usual cautious approach and its proclaimed strategy of’ peaceful progression’ to an unambiguous stance on the South China Sea. Right now, however, the condition does not appear to come to a head-on collision anytime far. Yet the contest could bring a serious and dangerous situation to the fore. The US is not going to communicate directly with its forces on the field. There is a lot of resistance for another war at home. This doesn’t mean the US is ineffective. What we have is a hegemon with a diminishing power and a reluctance to give up his position of leadership. At the other hand, there is no other country capable of replacing it while they frequently seek to question its authority. Chinese occasional deviation from caution, and reluctance on the part of the US to yield, build a dangerous situation.

Decline of the Unipolar System

The U.S. has been the only hegemony since the end of the Cold War, but since the economic crisis of 2008 its world hegemony has been undermined. The gap in power between China and the US is diminishing. In 2011, China’s GDP contributed for around half of the US GDP. If China’s GDP continues to rise at 8.5 per cent and US GDP increases at less than 3.8 per cent, the current gap between the two forces will level out in the decade to come. Meanwhile, the economic gap between these two nations and the other major powers will continue to expand over the next ten years. In the next five years, only the US and China will spend more than $100 billion annually on defense, growing the difference in power between them and the others. Accordingly, the international structure would not be unipolar.

International Players That Can Change the International World Order In 21st Century (Analytical Approach)

Bipolar global structure collapsed by the end of the Cold War. The United States has become the sole superpower and as expressed in the new industrial order of defense, the international structure has become unipolar. The major powers of the global community are China, Russia, Japan and the E.U. Whether the international system can turn into a bipolar or multipolar system depends on developments in many countries and regions in technological, political, economic, and military terms. China, Russia, Japan, the EU and India have the power to change their international structure. In the last twenty-five years, China’s capacities have steadily increased in magnitudes that significantly restructure the international order. Economic prosperity for China goes hand in hand with the advancement of science and technology. It is developing expensive weapons systems that are increasingly capable compared to developed countries ‘ most advanced weapons systems. Another important determinant of the future of the international community is the relative dominance of the U.S. in science, technical, economic and military capacities compared to other major powers.

Conclusion

The position of emerging states, which influence the range and change of the international system, is very difficult to comprehend. The general outlines of what is happening with this phenomenon are becoming more evident, as transition happens under intense internal dynamic conditions and not from external factors. There is a group of candidates that can be considered growing powers, and there are rapid bursts in this phase of transition, but it is longer than expected. Under conditions of changing institutionalization a central component of these changes occurs. Yet there is also a gap in the assumptions regarding the principles of collaboration and conflict. National interests and principles are certainly the most significant in the changing world order, and these can also lead to deeply complex and frustrated bargaining situations that need to be resolved by enhanced collaboration at the state level. Joined societies dissolve, along with the old beliefs. According to different ideas of world system, that countries are not less divided, and they can constantly struggle and communicate with each other at the same time. Therefore, the future multi-polar system would be no different from the other multi-polar moments that history has seen, resulting in more chaos and unpredictability than in the current unipolar world. Nevertheless, multi-polarity does not only carry the risks involved in researching balance of power among great powers for the first time in history.

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International Law

The UN reforms are required to make it functional

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Today, the world we live in has become more unpredictable, insecure, and exposed to more vulnerability. Geopolitics is changing rapidly, new problems are often emerging, while old issues remained unresolved. Humankind is under threats and challenges; some of them might be natural disasters, like Earthquakes, Floods, Fires, Valconos, Pandemic, etc. But most of the difficulties and problems are man-made, creation of some powerful countries, the result of over-ambitions, greed, expansionism, biases and jealousy. Big and more muscular countries are keeping eyes on the natural resources of small and weaker nations, etc.

In 1945, the United Nations was established to replace the League of Nations. Because the League of Nations was unable to solve most of the problems faced by the world, unable to resolve conflicts and wars, unable to protect human lives, unable to maintain justice and equality, the failure of achieving objects, the League of Nations was dissolved, and UN was established.

The UN was established with the following four objectives:

Maintaining worldwide peace and security

Developing relations among nations

Fostering cooperation between nations in order to solve economic, social, cultural, or humanitarian international problems

Providing a forum for bringing countries together to meet the UN’s purposes and goals

UN Charter was written by very professionals and experts in their own fields. The Charter is comprehensive and based on many considerations, satisfying almost the needs of nearly everyone at that time. Considering the disaster of the Second World war, the Charter was considered a most appropriate document to address practically all concerns.

The UN has been functioning since 1945 and ready to celebrate its 75th anniversary soon. At this moment, if we look at the performance of the UN, there are many things one can mention as achievements or in the UN’s credit. No doubt, in the early days of the Establishment of the UN, the objectives achieved were rated quite well. However, over time, the UN was politicized, and some of the countries, who were a major donor to UN contribution, were using the UN and its structures to achieve their political objectives. They were misusing the UN platform to coerce some other nations or using UN umbrella to achieve political of economic goals by harming other nations. On the other hand, geopolitics became so complicated and complex that the existing structure of the UN is unable to meet the challenges of the modern world.

Just, for example, Afghan is under war for the last four decades, people are being killed in routine matters, foreign intervention caused the loss of precious lives and economic disaster to people of Afghanistan. Iraq war, Libya War, Syria war, Yemen War, the situation in Ethiopia, Burkina Faso, Venezuela, Ukraine, somewhat more complicated conflict among the U.S., Iran, Israel, and the Persian Gulf, U.S.-North Korea tussle, and Kashmir, all are remained unresolved under the current structure of the UN.

Should we remain silent spectators and keep the status quo, and let the humankind suffer more? Should we justify ourselves as helpless and let the more powerful kills more human beings? Should we remain in isolation and keep our self busy with our own interests? Should we compromise with our conscious? Should we ignore our inner voice? Should we prove ourselves as innocent and not responsible such crimes committed by someone else?

Think and thing smartly, and consider yourself in the same situation and a victim, what we should be expecting from other nations, the international community, and the UN. We must do the same thing to meet the expectations of the victims.

The UN is unable to achieve its objectives with the current structure; the reforms are inevitable. We must strengthen the UN and transform the current dysfunctional UN to a more effective UN, which should satisfy the core issues of all nations. Africa is a major continent, and facing many challenges, but have no say in the UN; there is no single country from Africa in the Security Council of the UN as a permanent member having veto power. The Muslim world, having an estimated population of two billion, every fourth person in this world is a Muslim, there are 57 independent sovereign countries as member f the UN,m but no voice in the UN, no permanent member of UNSC, no veto power, who will protect their rights and who will look after their interests. Should they remain at the mercy of the current five permanent members of the UNSC?

Some countries are rebellious to the UN; some states are defaulter of the UN, and not implementing the resolutions passed by UNSC. Some countries have bypassed the UN and imposed war or sanctions on other nations. They must be held responsible for their acts, the UN should kick such countries out of the UN, and their membership may be suspended or cancelled.

It is time to introduce, comprehensive reforms in the UN, to address all issues faced by today’s modern, complex and rather complicated world. An appropriate representation of all nations, groups, ethnicity or religion should be ensured. The UN has a heavy responsibility, deserve more budgets, more powers and needed to be strengthened further.

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International Law

Coronavirus Shaping The Contours Of The Modern World

Nageen Ashraf

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Globalization vs. Protectionism:

Globalization means the movement of ideas, products, technology, and people across borders and different cultures. It is a multi-dimensional phenomenon. It has social, cultural, economic, political and legal aspects. Globalization has made the world a global village and talks about co-operation and interdependence. Protectionism, on the other hand, is the restriction of movement of goods and products across borders to protect the national industries and economy. The major goal of protectionism is to boost up national economy, but protectionist measures can also be applied for security purposes. So, we can say that protectionists are basically anti-globalists and prefer domestic strength as compared to foreign co-operation.

Protectionism and Covid-19

Globalization has made the world so interdependent and interconnected that any economic or political change in one state creates a domino effect and influence many other states. For the pandemic, most states were initially blaming China, but as it slowly healed and the pandemic caused more devastating impacts in the western states, more fingers are pointing towards globalization. Multiple narratives are building regarding globalization where protectionists finally got a chance to prove how right they were all along.

Globalization not only played a vital role in the spread of this epidemic, it also made the economic crisis go global by affecting the supply chains. An epidemic that affected a single city in Dec, 2019, grew to become a pandemic affecting almost every state in the world through movement of people and goods. States that adopted strict measures and restricted the movement of people, have relatively less cases of corona virus as compared to other states. The worst impacts of corona virus so far can be seen in USA where New York City was initially the epicenter.

New York City is definitely one of the most crowded cities in the world where daily, thousands of people move in and out for various purposes. This could be one of the reasons of such devastating impacts of corona in NYC because the free circulation of people and goods allowed the virus to spread exponentially. On the other hand, if we talk about African continent, where most states are under developed, and the movement of people in and out of the continent is very less as compared to Europe and Americas, reported cases of corona virus are very low. As of Sep 11, 2020, in the whole continent, the highest number of corona cases is in South Africa, with a count of642k as compared to USA’s count of 6.49m. This provides evidence that movement of people played a vital role in the spread of this virus and movement of people has increased a lot since the rise of globalization.

Critiques of globalization also argue that globalization is to be blamed for an epidemic that spread across borders and will soon plunge the whole world into recession. Interdependence because of globalization has made the world more vulnerable to such situations. For instance, China is one of the biggest markets in the world that exports antibiotics and telecommunications and remains an important part of most of the global supply chains. Half of the world’s surgical masks were made by China, even before pandemic. So, when the pandemic struck Wuhan, China, the supplies from China to the rest of the world affected many states that were dependent on China, and they ran out of important pharmaceutical inputs. Even the developed states like France ran out of medical masks and had to suffer because of lack of important medical equipment. This reveals the cost of such deeply interconnected global supply chains that create a domino effect.

Is Globalization ending?

Globalization has made the world a global village and undoubtedly facilitated the free movement of people, goods, ideas, cultures, information, and technology across borders. But on the other hand, it has also played a major role in the spread of diseases and has made states vulnerable to unexpected shocks. Globalists also believe that the medical or health consequences of corona would prove less destructive if states work together instead of working separately for the vaccine, as a competition. Adopting the nationalist or isolationist approach during the pandemic would crash the international economy and further increase the tensions. As the protectionists suggest, if we’d continue to protect only our national economies and keep on putting barriers on international trade, the national recession would soon turn into a global depression, as happened in 1930’s.Timely economic recovery is only possible through global cooperation.

 I think that the threat of Covid-19 has created an extraordinary situation. Originating from Asia, and then causing millions of deaths all around the globe, the blame on globalization is legitimate. Most of the states in the world rely on their tourism revenue that has been affected badly due to corona virus. For instance, Saudi Authorities decided to cancel Hajj because of growing pandemic, and the impact on KSA’s economy would be dramatic. Similarly, Japan is one of the states that depend highly on tourism revenue from Chinese tourists and travel restrictions have caused severe losses. We have also seen how the supply chains are affected just because one of the major producers (China) was badly hit by the virus. Globalization seems to have conquered the world so there is no way that it can be avoided completely. However, after the pandemic, there might be a little change in the world order regarding high interdependency. States that were mostly dependent on China for their important supplies might try to produce the supplies on their own and prioritize their domestic industries over foreign industries because of the consequences they had to bear during the pandemic. Similarly, travel bans will surely be removed but people might hesitate to cross borders and move freely because there will be awareness regarding the risks related to free movement. So, I think that the pandemic has highlighted some backlashes in globalization, but it doesn’t mean that globalization has failed. We can say that it is fragile, despite or even because of its benefits.

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