Pakistan faces prospects of being blacklisted for global terror funding

K S Tomar

K S Tomar

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Pakistan needs to discard the terror tag attached to it or else its coffers will be empty

The unfulfilled dream of Pakistan to get Kashmir always haunts its successive army generals even as its elected ‘puppet’ governments continue to exploit the issue at international forums.

Besides, Pakistan has been waging proxy war with India and sponsors terrorists to kill innocents in Kashmir valley.

Osama Bin Laden watches TV at his Abbottabad home in Pakistan (File pic)

Americans more often than not have turned a blind eye to Pakistan’s terrorist’s activities, till the time Osama Bin Laden got shelter in the Pakistani city of Abbottabad.

He later became the architect of the 9/11 attack in 2001 on the twin towers killing 2,996 citizens.

American feelings of despair swelled after the beheading of journalist Daniel Pearl of the Wall Street Journal by Pakistan sponsored terrorists in February 2002 in the Sindh province.

At present, Pakistan is one of the biggest funders of terrorism in the world and hence Financial Action Task Force (FATF) has retained it in ‘Grey List’ even as India tries hard to get Pakistan included in the Black List.

It is a huge setback for Pakistan Prime Minister Imran Khan after it failed to get out of the Grey List.

FATF, after its current review meeting, noted that while Islamabad had made “significant progress”, there are nonetheless “serious deficiencies” in mechanisms to check terror financing.

The virtual meeting of the FATF Plenary took place on June 25 under the presidency of Dr Marcus Pleyer.

Dr Marcus Pleyer

FATF President, Dr Marcus Pleyer, made it clear that Pakistan remains under increased monitoring while adding that Islamabad had made “significant progress”, but there remained some “serious deficiencies” in mechanisms to plug terrorism financing.

Three out of 27 [points] need to be fully addressed thereby referring to the Action Plan agreed by Pakistan. FATF has strongly urged Pakistan for the compliance pertaining to improvement in its

investigations and prosecutions of all groups and entities financing terrorists and their associates and show [that] penalties by courts are effective.

It may be recalled that early this month, a regional affiliate of the FATF retained Pakistan on the ”Enhanced Follow-up” list and asked the country to strengthen its implementation of anti-money laundering and combating terror financing measures.

According to the US’ Pakistan Country Report on Terrorism for 2019, the country has to deliver a lot in dismantling terror groups operating from its soil.


It says “Pakistan continued to serve as a safe haven for certain regionally-focused terrorist groups. It allowed groups targeting Afghanistan, including the Afghan Taliban and affiliated HQN, as well as groups targeting India, including LeT and its affiliated front organizations, and JeM, to operate from its territory.”

The report did note that the country took “modest steps in 2019 to counter terror financing and to restrain some India-focused militant groups” but has “yet to take decisive actions against Indian- and Afghanistan-focused militants”.

A 2016 US Institute of Peace report says, “Conviction rates in Pakistan continue to be extremely low” in terror-related cases despite the passage of the Anti-Terrorism Act (ATA) in 1997.

Pakistan paid little attention to court administration and case management”, the report notes, adding that “procedural errors and antiquated practices plague the investigation and prosecution of terrorism cases”.

The US terror report said that progress by Islamabad “remains unfulfilled” on “the most difficult aspects of its 2015 National Action Plan to counter-terrorism”.

The report specifically notes that while Pakistan has indicted Lashkar-e Taiba (LeT) co-founder Hafiz Saeed and some of his associates, “they have made no effort to use domestic authorities to prosecute other terrorist leaders such as JeM founder Masood Azhar and Sajid Mir, the mastermind of LeT’s 2008 Mumbai attacks”.


Ahead of the February 2021 FATF meeting FATF, Pakistan had rushed to register cases against Azhar, Mir, and Rauf Asgar, part of the top leadership of JeM, and even carried out raids to arrest them, “but only Azhar’s wife and a few aides were found at that residence”.

India had at the time said “it has become routine for Pakistan to come up with such farcical actions prior to important meetings”.

It is understandable, then, that New Delhi has deep misgivings about Pakistan’s commitment to discourage terror actors from using its territory to launch attacks in India even as it is widely believed that terrorist groups have access to support at the official level inside the country.

Analysts say that the United Kingdom has already questioned counter-terror financing measures put in place by Pakistan and included it in the list of 21 nations categorized as high risk for terror financing and money laundering, though Pakistan’s Foreign Office refuted it by saying that the UK’s assessment wasn’t based on facts.

To evade further stringent action, Imran Khan government had submitted the Follow Up Reports (FURs) in February, October 2020 and February 2021.

Of these FURs, only one report had been adopted by the APG in which Pakistan was re-rated in Recommendation No 29 (Financial Intelligence Unit) from ‘partially compliant to ‘compliant’.

Pakistan has been seeking the support of its friendly like China, Turkey, Malaysia etc but they could do nothing.

Islamabad-based think tank Tabadlab revealed early this year, that Pakistan sustained a total of $38 billion in economic losses due to FATF’s decision to thrice place the country on its Grey List since 2008. The research paper titled “Bearing the cost of global politics — the impact of FATF grey-listing on Pakistan’s economy” states that that grey-listing event spanning from 2008 to 2019, may have resulted in total GDP losses worth $38 billion.

Pakistan needs to discard the terror tag attached to it or else its coffers will be empty, and it will not be able to get help from IMF, World Bank, and Asian Development Bank.

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K S Tomar

K S Tomar

The writer, a senior political analyst, is a former Editor of the Hindustan Times' Rajasthan edition and has spent nearly four decades in journalism, including a six year stint in Nepal where he covered Sino-India-Nepal complex relationship and had a ringside seat to the Himalayan Kingdom's transition into democracy.

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