The Financial Action Task Force (FATF) has caused a stir across the country; essentially, it is an independent watchdog over global money laundering and terrorist financing by devising robust recommendations, methodology and standards for anti-money laundering and combating the financing of terrorism and proliferation. Asia Pacific Group is one of the nine FATF-Style Regional Bodies (FSRBs) with the responsibility to monitor terror financing and money laundering in the Asian region including Pakistan.
Due to the ongoing geopolitical turbulence stretching in South Asia over withdrawal of American troops from Kabul, the geo economics of US-Pakistan relation are in a jittery; since Islamabad is in the midst of financial storm following refusal to allow US air bases in Pakistan for carrying out military strikes in Afghanistan and commitment of Prime Minister Imran Khan to pursue an independent foreign policy. Is Pakistan’s inclusion and subsequent retention in the category of jurisdictions with strategic deficiencies grey list since June 2018
an indication of a shock wave to the candid stance of Prime Minister Imran Khan?
Not necessarily, the structural deficiencies around management of internal affairs and glossing over of colossal issues concerning money laundering and terror financing by policymakers in the past have also triggered opening of this Pandora’s box. Inadequate
legislations and subjugation of national interest over personal interests on top of fight against terrorism and involvement of hostile foreign agencies in Pakistan mounted to the ongoing stalemate with FATF.
Further, in the backdrop of this impasse lies the excessive reliance on greenback ever since
its existence thus leaving a limited margin of freedom for taking autonomous decisions. On one hand Pakistan’s Unique Selling Proposition (USP) – nuclear weapon, in the entire Muslim world, makes it strategically the most pivotal economy but we pay a huge price for the nerve-racking dreams of our enemies fearing the prospects of Pakistan becoming
a self-sufficient nuclear Muslimstate and it would not be wrong to attribute our ravaged state to the ill-wishes of those ginger groups.
In June 2018, FATF showed a yellow card to Pakistan by placing it in grey list on foregoing
concerns and issued a 27-points action plan having to do with anti-money laundering and
anti-terror financing urging it to be completed by February 2021.
The efforts by Pakistan, while commendable, were not wholly successful as it could make headway to only 24 points of the total by first cut-off date. Then in June 2021, after addressing largely 26 out of 27 points in original action plans with efforts afoot to address
the remaining item, a new chapter of this spectacle began, and it found itself jumping out of the frying pan into the fire when a wish list requiring additional 7 points action plan was added to the original demands.
In last FATF plenary in October 2021, FATF President Dr. Marcus Pleyer lauding Pakistan’s efforts over addressing 30 out of 34 points in concurrent action plans reiterated the need
to address the remaining 4 points on priority basis and ruled out any possibility of showing red card by placing it in blacklist, however unfortunately, Pakistan’s fate is delayed till next plenary meeting to be held in February 2022. Why FATF plenary is an epoch-making event for Pakistan? The answer is straightforward but unpalatable; take a minute to remember the times we approached International Monetary Fund (IMF) for financial assistance during the last seven decades; sadly, a great many times, to wit the count goes to 23 times! As of June 2021, Pakistan’s external debt stood at USD 122 billion with foreign exchange reserves of only USD 25 billion according to the statistics by State Bank of Pakistan.
Getting blacklisted with such economic indicators by FATF means an end to further financial assistance of such a dependent economy from international monetary institutions. It’s trembling to even think about the heart-rending impacts of getting blacklisted, domestic currency would nosedive uncontrollably leading to hyperinflation thus plundering poverty-stricken citizenry. If not seriously addressed, a complete meltdown of an economy already sailing at a glacial pace is not any farther away, consequently endangering our USP, nuclear weapon, with the imposition of international sanctions.
Isaac Goldberg (1887-1938), American journalist, once rightly said, “Diplomacy is to do and say the nastiest things in the nicest way”. Had the Prime Minister’s stance on adoption of an independent foreign policy with an ailing economy held a right mix of diplomatic and blunt statements? I think circumstances suggest the otherwise, although Pakistan already paid a huge price for jumping into someone else’s war but still such an abrupt and un sculptured stance of the Premier at such a critical point of time has stirred up a hornet’s
nest. Plight o four neighbor, Iran, which challenged the international protocols and restrictions head-on, presents a cautionary tale of victimization by the world through international lobbying and arm twisting.
Over the years, international economies imposed stringent restrictions on Iran encompassing banking, shipping, nuclear, international trade and what not, making it a spineless subject in the face of cruel aggression.
Following the last meeting of FATF, Turkey also accompanied Pakistan in grey list on account of identical reasons, time will tell whether this nation knows to avert this lawfare tool or it would tender its submission like Iran.
This is something that should ring alarm bells for those sitting in Islamabad and it is high time to address the issue.
As they say; crosses are ladders that lead to heaven, similarly FATF’s repeated objections
against removal of Pakistan from grey list give us an excellent opportunity to enact and
promulgate new laws in line with international best practices thus helping us in curbing
money laundering, smuggling and terror financing, and ascension towards a more documented and controlled economy. Pakistan is a sanctity in itself; it must escape a similar fate to Iran, and it cannot afford to make similar mistakes lest FATF restrictions
are used as a lawfare tool against its sovereignty.
The writer is a professional under apprenticeship in a private organization in Islamabad.