India and Pakistan’s FATF Status

The Financial Action Task Force (FATF) recently announced that Pakistan will continue to remain on the watchdog’s “increased monitoring list”. The FATF president Dr Marcus Pleyer said, “Pakistan has made significant progress and it has largely addressed 26 out of 27 items on the action plan it first committed to in June 2018.” He said Pakistan “must improve their investigation and prosecution of all groups and entities financing terrorists and their associates and show that penalties by court are effective. As soon as Pakistan shows it has completed these items, FATF will verify and members of FATF will vote.”

Despite satisfactory performance the decision of the FATF to retain Pakistan on the grey list coupled with the Jaishankar’s statement, it raises serious questions on the integrity of the watchdog. Indian News agency ANI quoted Jaishankar as saying; “due to us, Pakistan is under the lens of the FATF and it was kept in the grey list”.

Reacting strongly Foreign Minister Shah Mehmood Qureshi said: “Manipulating an important technical forum for narrow political designs against Pakistan is disgraceful but not surprising for the Modi government”. The Pakistan’s Foreign Office said that the Indian foreign minister’s statement that the Nrendra Modi government had ensured Pakistan remained on the FATF grey list had vindicated Pakistan’s longstanding stance on India’s negative role in the global financial watchdog.

No doubt, Pakistan’s apprehensions about the ‘politicization of FATF’ are real which are direly needed to present to the world. The FATF currently has 39 members including two regional organizations—the European Commission and Gulf Cooperation Council. India is a member of the FATF consultations and its Asia Pacific Group. India can convince the group through sufficient evidence of Pakistan laxity against terrorist leaders like Hafiz Saeed and Masood Azhar, it may be difficult for Pakistan to get off the grey list.

Further, the FATF officials are required to check the authenticity of India’s arguments. The official also pointed to a vast network of hundreds of “fake media “outlets serving “Indian interests”. The official cited a Brussels-based watchdog, EU DisinfoLab, which uncovered a network of 265 coordinated fake local media outlets in 65 countries “serving Indian interests” and “undermining Pakistan”, as well as multiple dubious think-tanks and NGOs.

India also uses international forums to pressurize Pakistan. Indian lobbying campaign also joined forces with the Armenian National Committee of America (ANCA). It is reported that ANCA was seeking to get support from the 4 million strong Indian diasporas in its new campaign calling on the administration of US President Joe Biden to sanction Pakistan as a terrorist financing state. It is also reported that Indian also tried to use the SCO summit to target Pakistan on the FATF. There are reports that India uses G 20 and G 7 platform against Pakistan. After the Pulwama incident, India tried to link it with Pakistan at the Munich Security Conference. In 2017, the BRICS, which comprises of Brazil, Russia, India, China and South Africa, declared a number of militant organizations allegedly based in Pakistan a regional security threat. In 2018, India reportedly negotiated with China to take back its support in order to place Pakistan on FATF’S grey list.

Pakistan also argues that the FATF administration takes no action against India. After the blast in Lahore’s Johar Town, Foreign Minister had said that Pakistan had shared “concrete proofs” of India’s terror financing in the country and demanded that the FATF bring India in the dock and questions its wrongdoings. “The FATF member countries’ action will determine whether it is a technical or a political forum”. India also sponsors TTP and Daesh in Pakistan.

A report of the top-secret files of the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) which works to combat money laundering, terrorism financing and financial fraud has revealed the “involvement of Indian banks, including the state-owned banks in money laundering through transactions used in facilitating and financing acts of terrorism, particularly in the region—The entities and individuals were involved in money laundering of $ 1.53 billion through 3201 illegal  and suspicious transactions between 2011 and 2017.

International community also sides with the Indian narrative. Some pro-Indian European countries including France and Germany, had recommended to the FATF to continue to keep Pakistan on the grey list and had taken the position that not all points had been fully implemented by Islamabad. France has not been happy with the recent response of Islamabad on the cartoon issue. Pakistan has not even posted a regular ambassador in Paris and Turkey-Pakistan axis is working against French ethos. The United States has also expressed concern over the acquittal the accused in American journalist Daniel Pearl’s kidnapping and murder case. Pakistan needs the support of 12 out of 39 countries to get its name dropped from the grey list. US alone controls a block of 20 countries.

Although FATF’s member countries are the US and other western countries, including many Islamic states, yet decisions of the US -led major western countries prevail on the organization. Hence, FATF shows duplicity, as it has become a tool of keeping pressure on Pakistan, while ignoring India.