Political Perception of FATF and Ramifications for Pakistan

International politics in contemporary times is driven through geostrategic considerations. Significance of a country is not taken into account by its geo-economic paradigm rather in conflict of interest dilemma. This game of thrones deliberately is being played by great powers to influence the decision makings at abroad. Moving forward, Financial Action Task Force (FATF) is so called an independent body comprising of 39 member states plus regional organizations. In FATF, 37 are under jurisdiction member countries and 2 regional organizations (Gulf Cooperation and European Commission). It is a watch dog regulating the anti-money laundering and Terror financing framework. It functions by putting states in either black list or in grey list which are showing strategic deficiencies in recommendation given by the body. With these unregulated deficiencies Pakistan once again had been placed in grey list.  Apart from this it is controlled by power politics with and great powers.  Few examples of states like Yemen, Ethiopia, Sri-lanka, Serbia, etc, are in grey list with uncertainty of colliding interests. 

Shockingly, a statement released by Indian Ministry of External Affairs that “PM Modi will make sure that Pakistan would remains in Grey list of FATF by influencing the United Nation’s platform. Realistically, it is considered a tool through which domestic and international meddling of politics is being done. This argument undoubtedly substantiates the raised political tool against states like Pakistan suffering from miserable economy, foreign policy crisis and blank trade with states. Whereas, budget comparison and historical glimpses of terror acts such 9/11, have given rise to dilemma of terrorism and its menace at international level. Secondly, 26/11 of Mumbai attacks which undoubtedly changed the perception of South Asian politics.

Money laundering is an act of transforming the illegal money with certain unusual sources in purpose to decriminalize it. On the other hand, Terror financing is providing financial sources for terrorist activities. In terror financing funds could be legitimate origin such as profits or donations from business, or other organizations and illegitimate sources from drug trade, kidnapping or smuggling of certain goods Steps for both are commonly matched but the differences are of origination and objectives.

 Moreover, sources of ML and TF are concerned with tax evasion, with this factor at domestically or transnational, the owner conceals the sources of its earnings or its profits. Further, with authority fearing they may hide fiscal resources and transfer it to the other banks of neighboring states. Moreover, other substantial reason is negligible financial regulations of state. Additionally, ML can be attributed with involvement of airport security authorities, with these sources can be exchanged and converted to legitimate source without paying any single tax for it, this is called bribery. Further, political authorities are also genuinely involved with this. Moreover, there is no mechanized system to track the money source at international level. Last but not the least is money being carried out through porous borders, for instance Mexico and USA border and Pakistan Afghanistan border. Many other ways to deceive the anti-money laundering authorities ranging from division of money to bank control strategic failures. With all this the launderers can easily become investors. There are many international cases such as Case of Bank of New York to Vatican Bank case which are violating the laws. With unprecedented impacts of money laundering and terror finances harming the rationality of state, these are not only economic centric but creating the great influence and social ills. Firstly, it diminishes the image of that particular country, secondly, FDI get limitations by lowering the confidence of investors. Further, social ills are enhancing such as trafficking of drugs, population to piracy, and refugees’ influx which later will dependent on economy of that country.

Additionally, strangling ML and TF and substantial role carried out by FATF is considered as tool to make states relatively at harm. It is mainly dealing with anti-money laundering and combating financing the terrorism. This body comprising members ensures certain protocols for which states are abiding. Headquarter is at Organization for Economic Cooperation and Development in Paris. It dominates the six areas of interests in the form Recommendations, High-risk and non-cooperative jurisdiction, financing of proliferation, mutual evaluations, corruption and methods and trends. With this regard United Nations Security Council (UNSC) adopted the resolution 1617. Which is concerned with regularizes and adopts the 40 proposals on tax evasion and nine important suggestions on terrorist financing. Later on, the there were forty recommendations for expansion of financing of weapon of mass destruction. These ranging from identifying threats to undertaking new assignments concurred by its members.

Moreover, with the states like Pakistan, has been denoted as golden crescent. In Pakistan, the drug trafficking and money laundering are at immense pace. Problems relating the authorities to corruption have affected this state of affairs at large. For instance, Hawala and Hundi are the prominent source of money laundering in Pakistan. Writer has argued the terrorist activities of foreign state such India and Afghanistan are involved in terror activities to destabilize the Pakistan. With these impacts are of grave nature as earlier defined in review. In sort of many cases Pakistan has initiated and establishes many substantial efforts by amending the legal aspects and introducing many relevant acts in order to get out of grey list from which it had been added in 2015. Moreover, Pakistan has taken policy actions such as SAARC Regional Convention on Suppression of Terrorism to Signing Bilateral and multilateral agreements. Further, it has genuinely introduced many efforts in the form of National action plan and ban terror sponsoring bodies like JuD and FIF.  But demands are also increasing day by day. In new government in Pakistan a hope has been established but it will take inappropriate interests by leaving national policies at stake.

Khaleeque Ahmed
Khaleeque Ahmed
Mphil student at Quaid i azam university, Islamabad.