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Why FATF treats India as a protégé and Pakistan as a bête noire?

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Indian media is never tired of describing Pakistan as hub of money laundering and terror financing in the world.  Indian representatives echoed their babble in recent United Nations’ meeting also.

India makes no bones in declaring its intention to link Pulwama blasts with money trail to Pakistan. By doing so India hopes to get Pakistan blacklisted by Financial Action Task Force.

Little focus on money laundering and terror financing by India: Nowadays, Major powers’ geo-political and economic interests have forced them to ignore suspicious financial transactions by India. However, not long ago, the world was more concerned about money laundering in India than in Pakistan.

Even the USA called upon India to do more to prevent financing of terror networks. USA’s Assistant Secretary of State for Economic and Business Affairs Anthony Wayne told the Senate Banking Committee, ‘In India, two accounts belonging to terrorist individuals/entities have been identified, but the Government of India has not frozen any assets to date. It is aware of the UN 1267 Committee List, however’, Wayne noted that India’s Prevention of Money Laundering Act `criminalises money laundering and requires banks and other financial institutions and intermediaries to report individual transactions valued over US$ 23,000 to the financial-investigation unit’. Wayne added, ‘India has also indicated it wants to join the Financial Action Task on Money Laundering. However, at a recent FATF plenary meeting in Paris, concerns were raised regarding its ability to provide effective international cooperation in a timely manner and to extend mutual legal assistance’. 

Here is a glimpse of corrupt India. World Bank estimated that capital flight of Rs 50 to 100 crore took place in four fertilizer plants projects via Italian firm Snam Projetti.  Minimum commission of seven percent was charged on imports of the public sector. Indian government paid no regard to the recommendations adopted by the Financial Action Task Force on money laundering, set up in July 1989 by the Paris summit of the seven most-developed countries.  The conventional money-laundering techniques (smurfing, cover companies, etc.) are used to the hilt in India.  The average amount stashed away from India during 2002-06 is US$27.3 billion (about 136,466 crore). It means that during the 2007-2018 period, the amount stashed away is 27.3×15=US$ 4, 095 billion. Just imagine the volume of money stashed abroad since 1947, including Nehruvian era when Birlas and Tatas gave blank cheque to Congress.

Lid on laundered money lifted: To what end, the laundered money is put is anyone’s guess. However, a recent document-based report by the International Consortium of Investigative Journalists has blown the lid off the suspicious financial transactions by Indian banks, public and private sector companies.

The ICIJ report based on Financial Crimes Enforcement Network (FinCEN) files “represent less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017.”

Earlier a study, conducted by Conflict Armament Research, had confirmed that seven Indian companies were involved in the supply chain of over 700 components including fuses or detonating cords used by the Islamic State to construct improvised explosive devices .Even the Sri Lanka blasts were linked to terrorists hiding in Indian Southern States. As an eye wash, India arrested Islamic State moles. To bypass banking channels, even gold and diamond are `legal tender’ for money laundering.

How the FATF favoured India: In both India and Pakistan, money laundering is popularly known as hawala, or hand –to-hand-transaction. The Financial Action Task Force was scheduled to review India’s money laundering and terrorist financing regime, a ten year cycle, in September-October 2020. But, it has been tentatively postponed to January February 2021 ostensibly `in view of COVID19 pandemic in India. The year-long review evaluates `Indian legal system against financial crimes at its plenary meeting in February 2022 and subsequently issue a statement and recommendation about the country.

The FATF happily agreed with India that `it is impossible for assessed jurisdictions and asssessories alike to conduct on-site visits and in-person meetings’ (no relaxation for Pakistan).

How India hoodwinked the 2013 FATF team: In the 2013 review, India  managed to hoodwink the FATF by pleading  that `it has set up  a joint working group  comprising 22 central investigation, intelligence-gathering and regulatory  agencies  to check illegal  financial transactions. The agencies include the Central Bureau of Investigation. Enforcement Directorate, Income Tax Department, Directorate of Revenue Intelligence, Financial Intelligence Unit, Customs, Market regulator, Securities and Exchange Board of India,  banking regulator and insurance regulator TRDAL.

The 2013 review team was much impressed by Rahul Navin, a 1993-batch Indian Revenue Service Officer of the Income Tax Department deputed with the Enforcement Directorate. Navin who had earlier worked with the Organisation for Economic Cooperation and Development had authored a book Information Exchange and Tax Transparency: Tackling Global Tax Evasion and Avoidance.

How the ICIJ blew lid off India’s US$ 2 trillion money laundering and terror financing: The International Consortium of Investigative Journalists based its report on two million Suspicious Activity Reports filed by prestigious banks with Financial and Crime Enforcement Network (FinCEN). The ICIJ report is just tip of the iceberg. Its revelations are based on `only  0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017’. The US banks who filed reports include Deutsche Bank Trust Company Americas, BNY Mellello, Citibank, Standard-Chartered and JP Morgan. The reasons mentioned in the reports include `high-risk jurisdiction for money laundering or other financial crimes, adverse media or public information on the client’, unidentified parties, and the fact that source of funds and purpose of transaction could not be ascertained’. Not only the banks but also the public and private sector companies were the culprits. They include Hindustan Aeronautics Limited, Bhushan Steel Limited, Bharti Airtel and Essar. Heretofore is a bird’s-eye view of the findings.

Indian banks figure in over 2000 transactions, linked to Indian entities, valued at over US$ 1 billion (Rs. 7, 369 crore) between 2011 to 2017. These banks include State  Bank of India,  Punjab National Bank, Canara Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, and Indus Ind Bank.

Open Question: While the ICIJ has shared the information with Buzzword and 108 other media outfits, India’s `Special Investigation Team on Black Money’ stays mum. The SIT was formed on the directions of India’s Supreme Court.

Inference: The FATF should undertake an even handed investigation to India’s multi-facetred money laundering and terror financing.

Mr. Amjed Jaaved has been contributing free-lance for over five decades. His contributions stand published in the leading dailies at home and abroad (Nepal. Bangladesh, et. al.). He is author of seven e-books including Terrorism, Jihad, Nukes and other Issues in Focus (ISBN: 9781301505944). He holds degrees in economics, business administration, and law.

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Terrorism

A Virus Yet to Be Eradicated

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Much as everything in this world, human memory knows its limits. Increasingly receding into a background of the past, episodes of our life—be they thrilling at the thought or intensely dramatic—grow faint and fade, as they are gradually eclipsed by latest events and fresh experiences.

On September 11, 2001, I happened to be a first-hand witness to the most heinous terrorist attack in humanity’s contemporary history—the hijacked passenger jets heading to crash into the towers of the World Trade Center in lower Manhattan. Twenty-one years later, I’m somewhat in doubt that all of this happened to me for a fact: blinding flares of orange against the backdrop of a blue September sky, swirls of smoke and dust slowly blanketing the city’s downtown narrow streets, a high-pitched cacophony of fire-truck and police sirens, crowds of disoriented people having no idea where to run and what the next moment might bring.

In the wake of 9/11, international terrorism has predictably become a thing to bandy about. Like many of my colleagues, I was attending numerous conferences and seminars as well as partaking in various research projects on the subject. Besides, a stroke of fate gave me a rare opportunity to have personal conversations with such heavyweights of world politics as Vyacheslav Trubnikov, Richard Armitage, Thomas R. Pickering, Kofi Annan and others, who made their meaningful contribution to fostering cooperation in countering the terrorist threat. In a way, their efforts have borne fruit as the world has seen nothing similar to 9/11 since 2001.

Still, we have to admit that the war on terror has not ended in a decisive victory. Terrorist attacks no longer claim lives of thousands—however, hundreds have died in the massive attacks in Paris and in Madrid, in Bagdad and in Berlin, in Beslan and over Sinai, in Gamboru (Nigeria) and in Mumbai (India), with new names added to this tragic list every so often. Large-scale terrorist attacks are now few and far between in the United States, but there have been more of them in Europe, let alone in the Middle East. The recent suicide bombing near the Russian Embassy in Kabul is yet another reminder that the terrorist threat is still here. Why, then, is the goal to wipe out terrorism—now dating two decades—not achieved so far?

In the first place, the international community has failed to agree on a common definition of terrorism’s origins, driving forces and character. What some actors explicitly dub as “terrorist” may look like a national liberation struggle for others. Bring up the issue of terrorism in Kashmir in a conversation with Indians and Pakistani, only to see there can hardly be a common denominator in this matter.

Second, any success in the fight against terrorism entails a high level of trust between the interacting parties—simply because they would have to exchange sensitive and confidential information. In today’s world, trust is thin on the ground. An apparent and mounting deficit of this resource is not only present in the relations between Moscow and Washington; it also takes its toll on the relations between Beijing and Brussels, between Riyadh and Teheran, between Cairo and Addis Ababa, between Bogota and Caracas, and the list goes on.

Third, international terrorism is far from an issue that is set in stone. It is gradually changing and evolving to become more resilient, sophisticated, and cunning. Similar to a dangerous virus, the terrorist threat is mutating, generating ever new strains. Ironically, what is especially dangerous today is the kind of terrorism bred by anonymous mavericks and amateurs rather than the sort represented by well-known transnational extremist movements—individualists are the hardest to track and neutralize, while plans of amateurs are harder to reveal.

The current progress in military technology, coupled with other trends in the contemporary international arena, portend a new spike in terrorist activities in the coming years. Modern and increasingly complex social and economic infrastructure, especially in large metropolitan areas, is an enabling environment for hard-hitting terrorist attacks. Besides, international and civil conflicts—like the one raging in Ukraine—drastically heighten the accessibility of modern arms for would-be terrorists.

Add to this a comprehensive setback in the resilience of global economy, which may be fraught with more social tensions and an inevitable rise of pollical radicalism and extremism in a broad range of countries. An obvious foretelling: In this “nutrient broth”, the virus of terrorism, which has not been wholly eradicated, stands all the chances for an “explosive” growth.

It may well be possible that all of us will in the years ahead be lucky enough to avoid a second edition of the events that shattered the world on September 11, 2001. Still, taking terrorism off the agenda is only possible if humanity effects a transition to a new level of global governance. It is either that the leading powers are wise and energetic enough for this, or the tax that international terrorism imposes on our common civilization will be progressively higher.

From our partner RIAC

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Terrorism

ISIS Rises from the Dust in the Syrian Desert

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Over the last few months Syria’s northeast has been spiraling downwards to chaos amid the surge of violence and terror attributed to Islamic State (IS). After almost five years of dormant existence the terror group is once again making its way to prominence in Syria. With the so-called territorial califate no longer viable, the IS members have switched to hit-and-run attacks on remote outposts and prolific use of improvised explosive devices (IED) against vehicles. These attacks target both US-supported Syrian Democratic Forces (SDF) and the Syrian army units operating in the northeastern provinces of Raqqa and Deir Ezzor. At the same time the terrorists managed to restore afinancial safety net by extorting money from local professionals, including small business owners, doctors and teachers. Those who refuse to pay are subjected to threats and torture. The resulting insecurity enables the terror group to widen the scope of its activities even further.

The deterioration of the security situation in Syria went almost unnoticed by the international community distracted by the Ukrainian conflict. Under these circumstances the U.S. has a window of opportunity to curb the Russian influence in Syria and undermine theimage of power projected by Moscow in the Middle East.

Indeed, the areas held by the Russians and the Syrian army in Deir Ezzor and Homs have witnessed an increase in bloody attacks, supposedly carried out by IS fighters. The terrorists were able to avoid retaliation by retreating to no man’s land in the areas abutting the U.S. bases, namely Al-Shadadi, the Green Zone near Abu-Kemal border crossing and Al-Tanf base. Moreover, previously each IS attack in US-controlled areas had been followed by joint raids of SDF and the US special forces. It is no longer so. Considerable resources that might otherwise have been used for counterinsurgency operations are allocated to maintaining security in Al-Hol camp, where some 12,000 IS fighters and their family members are held. Add to that the imminent threat of Turkish invasion from the north. The SDF was led into a deadlock and is loosing the grip on the region. Meanwhile IS sleeper cells exploit the situation to their advantage and infiltrate territories controlled by the Syrian army.

These suspicions are confirmed by a high-ranking source in the Syrian intelligence. Speaking on the condition of anonymity, the source claimed that the U.S. helicopters transported 200 former IS fighters from prisons in Haseke to the 55-km security zone around Al-Tanf. The terrorists will be split up into groups of 10 – 15 people. These groups will be then sent to provinces with Russian presence including Homs, Latakia, Tartus and Damascus with the task of conducting terror attacks with IEDs at the Russian military sites. Most of the selected militants originate from Northern Caucasia or Central Asia and therefore are fluent in Russian.

The source added that the list of the primary targets of the terrorists includes the phosphate mines in Hneifis guarded by Russian security companies as well as Russian military bases in Lattakia, Tartus, Damascus and Aleppo.

Ultimately, the recruitment of IS members to create disturbance for the Russians would only become a logical development of the proxy policy adopted by the U.S. in Syria. After all, Washington is killing two birds with one stone by destabilizing the area of Russian influence and making use of the IS prisoners. However, there is another conclusion to be made: Washington has failed in its initial mission to defeat IS and is now resorting to the use of terror group splinters in its political power games.

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Terrorism

Pakistan is a victim of terrorism

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Terrorism

A High-Level Ministerial the first Session of the UN Global Congress of Victims of Terrorism was held on 8 September 2022, Pakistan’s Foreign Minister Bilawal Bhutto Zardari’s remarks:- 

“I am honored to speak today at the first UN Global Congress of Victims of Terrorism. This subject has special resonance for me personally, having lost my illustrious mother, the first woman Prime Minister of Pakistan, in a dastardly act of terrorism.

2.​ The Government and the people of Pakistan pay solemn tribute to all those who have suffered at the hands of terrorists. I express my profound support and solidarity with the victims and families of those who have been affected by this scourge.

3.​ The international community has an abiding responsibility to protect and support victims of terrorism. This has to be the basic tenant of our efforts to promote peace and security in the world.

4.​ While waging kinetic efforts to eradicate terrorist groups is imperative, we cannot fully win the fight against terrorism without preserving the rights of millions of innocent, defenseless, and vulnerable people who have suffered immensely because of terrorism. There should be more focus on retribution and rehabilitation and justice. Equally important is the need to work together to prevent further attacks, hold terrorists to account, and adopt a uniform victim-centric approach while addressing the challenges faced in conflict zones.

5.​ It is also unfortunate that political expediency and real politick have been allowed to dictate international response towards terrorism. Our tolerance for terrorism must not be a function of our foreign and domestic policies. This selective approach toward terrorism is the biggest injustice to the victims of terrorism.

6. ​For the last two decades, Pakistan has been one of the worst victims of terrorism – with over 80,000 causalities and economic losses exceeding $150 billion. We pay tribute to the families of martyrs of our law enforcement agencies and armed forces, who have rendered invaluable sacrifices while defending our motherland.

7.​ If we are to chart a way forward for victims, we must look beyond narrow political interests and geo-political agendas. We must examine why, despite global strategies, the terrorist threats continue to proliferate and give rise to the number of victims.

8.​ To further debate this issue, I would like to make a few points: First, we must address the root causes of terrorism and conditions conducive to terrorism. Second, we must distinguish terrorism from legitimate struggles for self-determination. Third, we must address state-sponsored terrorism, especially in cases of foreign occupation, and reject occupying powers’ propensity to use brute force against occupied people in the name of counter-terrorism operations. Fourth, we must have a consensus definition of terrorism and take into account new and emerging threats. Fifth, we must address challenges emanating from the use of new technologies by terrorists, especially on social media and the dark web. And finally, we must counter disinformation campaigns.

9.​ Pakistan condemns terrorism in all forms and manifestations including right-wing, Islamophobia, racially and ethnically motivated, and state-sponsored terrorism.

10.​ Terrorism can only be completely eradicated by fighting extremism and the mindset that breeds violent extremism. I would like to urge that this global problem requires continuing international cooperation without any prejudices or preconceived notions against any particular religion, race, civilization, or country.

11.​ I would also like to take this opportunity to pay special homage to the oppressed people of Indian Illegally Occupied Jammu and Kashmir (IIOJK) and Palestine who deserve our special attention for their continuing suffering as victims of the worst forms of state-terrorism. The international community must hold the perpetrators of such state terrorism, and crimes against humanity, to account.

12. ​Our inability to address these issues will continue to increase victims and add to their suffering. It will also add to the physical and psychological trauma that may outlive many conflicts. The international community owes it to the victims of terrorism to take effective steps to address terrorism, wherever it may be, in whatever form it exists, without political considerations. This is our moral as well as legal obligation.”

Pakistan’s sacrifices in the Afghan war are much more than the collective damages caused to the 46 nations alliance led by the US in Afghanistan. Pakistan suffered the loss of around 80,000 precious human lives and an economic loss of estimated worth US Dollars 250 billion, in addition to the menace of terrorism, drugs, and gun cultures. The international community should acknowledge Pakistan’s sacrifices and compensate.

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