Pakistan could face financial sanctions from FATF, say analysts

General view with Faisal Mosque in Islamabad, July 13, 2008. (REUTERS)
Updated 19 February 2018
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Pakistan could face financial sanctions from FATF, say analysts

ISLAMABAD: Pakistan may be at risk of being placed back on the international terror-financing watch list of the Financial Action Task Force (FATF).
FATF began its six-day plenary meeting in Paris on Sunday to discuss the safety and security of the global financial system.
The resolution to place Pakistan on FATF’s list is spearheaded by the US, with the support of Britain, France and Germany. The US has reportedly had concerns about the depth of Pakistan’s commitment to tackling money laundering and terror financing.
US-Pakistan relations hit a new low last year when Washington — unveiling its new strategy for Afghanistan — accused Pakistan of harboring and supporting terrorists.
Pakistani Foreign Minister Khawaja Mohammed Asif is currently visiting Moscow on a four-day tour, at the invitation of his Russian counterpart Sergey Lavrov.
Asif will likely raise Islamabad’s concerns about the FATF in an attempt to muster Russian support against the four countries leading the attempt to include Pakistan on the watch list.
Last year, FATF’s International Coopera­tion Review Group resolved to scrutinize Pakistan’s apparent support of proscribed groups operating on its soil and requested a report on the country’s efforts to combat terror financing ahead of the its next sessions. The global intergovernmental organization meets three times a year.
“This time (the effects) would be even greater because there are other pressures on Pakistan,” political commentator and retired Lt. Gen. Talat Masood told Arab News, speculating on what might happen should Pakistan be included on the watch list again.
“Pakistan’s balance-of-payment position is very adverse at the moment and internal stability is not good. It will have a greater impact than it had last time,” he continued, urging the government to take “appropriate measures” to combat the imminent danger of sanctions.
Pakistan spent five years on FATF’s watch list from 2010, before its compliance with international standards saw it removed from the list.
Masood said that if financial restrictions are imposed on Pakistan, it would be as a result of the country’s “foreign policy and internal situation,” which he said the government needs to review and revise to avoid risking Pakistan’s economic stability and further tainting the country’s international image.
Former diplomat Javed Hafiz, however, believes “it’s an institutional, not a policy, problem.”
Hafiz told Arab News, “It’s a pressure tactic to force Pakistan to do more than it’s already doing. It’s already in our national action plan not to allow banned organizations (or individuals) to operate, even under a new name, and to freeze their assets.”
Senior economist Dr. Syed Nazre Hyder described the potential impact of Pakistan’s inclusion on the watch list — should it happen — as “near lethal.” He pointed out that the cost to banks’ customers will rise, investors in the international capital market would request a much higher rate of return from Pakistan, and multilateral financing organizations would add risk premiums on any money borrowed.
Furthermore, financial experts fear the International Monetary Fund (IMF) may reject any loan extension Pakistan might request as a bailout to curb its widening trade deficit, or offer a new deal with stricter guidelines dictated by the US and the European Union.
“Pakistan will need a loan to pay off its debt burden,” Hyder told Arab News. “If it’s included on the list, the country will face a serious challenge sourcing funds for repayment leading to the possibility of default. This would cripple Pakistan economically.”
Dr. Ashfaq Hasan Khan, a former adviser to the Ministry of Finance, believes Pakistan’s inclusion on the FATF’s list may not have the expected impact, however.
“Pakistan has done a lot as far as anti-money laundering is concerned. It’s taken additional steps last week to further strengthen (that section of law),” said Khan, referring to the government’s seize, freeze, and control operation against Jamat-ud-Dawa (JuD) and its charity wing, the Falah-e-Insaniat Foundation (FIF).
Both JuD and FIF are linked to Hafiz Saeed, whom India accuses of masterminding the November 2008 attacks in Mumbai. Saeed has a $10 million bounty on his head.
Khan believes the impact on Pakistan’s relations with the international financial market would be insignificant. The FATF, he pointed out, “deals with terror financing and money laundering, against which we have taken action.”
Khan said the present government would not allow the US “to pull Pakistan’s strings financially.”
India has also lobbied for Pakistan’s inclusion on the FATF list. But Islamabad is banking heavily on support from China, Russia, Turkey, and members of the Gulf Cooperation Council.
Masood, for one, thinks Pakistan’s need for Chinese support is worrying.
“We are relying far too heavily on China. I don’t think even China likes that,” he said, adding that Pakistan needs to focus on internal stability before it can successfully resist international pressure, and that it should use its relationship with China to gain tangible benefits, rather than “frittering it away to counter negative pressure from the US, India and others.”


New Zealand orders top-level inquiry into mosque massacres

Updated 25 March 2019
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New Zealand orders top-level inquiry into mosque massacres

  • "One question we need to answer is whether or not we could or should have known more," Ardern said
  • Ardern ruled out New Zealand re-introducing the death penalty for accused gunman Brenton Tarrant

WELLINGTON: New Zealand Prime Minister Jacinda Ardern on Monday ordered an independent judicial inquiry into whether police and intelligence services could have prevented the Christchurch mosque attacks on March 15.
Ardern said a royal commission -- the most powerful judicial probe available under New Zealand law -- was needed to find out how a single gunman was able to kill 50 people in an attack that shocked the world.
"It is important that no stone is left unturned to get to how this act of terrorism occurred and how we could have stopped it," she told reporters.
New Zealand's spy agencies have faced criticism in the wake of the attack for concentrating on the threat from Islamic extremism.
Instead, the victims were all Muslims and the massacre was allegedly carried out by a white supremacist fixated on the belief that there was an Islamist plot to "invade" Western countries.
"One question we need to answer is whether or not we could or should have known more," Ardern said.
"New Zealand is not a surveillance state ... but questions need to be answered."
Ardern ruled out New Zealand re-introducing the death penalty for accused gunman Brenton Tarrant, 28, who was arrested minutes after the attack on the mosques and has been charged with murder.
She said details of the royal commission were being finalised, but it would be comprehensive and would report in a timely manner.
It will cover the activities of intelligence services, police, customs, immigration and any other relevant government agencies in the lead-up to the attack.
The gunman livestreamed the attack online, although New Zealand has outlawed the footage as "objectionable content".
Ardern reiterated her believe it should not be aired.
"That video should not be shared. That is harmful content," she said when questioned about Turkish President Recep Tayyip Erdogan showing excerpts of the footage at campaign rallies for local elections this month.
Erdogan had angered both Wellington and Canberra with campaign rhetoric about anti-Muslim Australians and New Zealanders being sent back in "coffins" like their grandfathers at Gallipoli, a World War I battle.
New Zealand Foreign Minister Winston Peters travelled to Istanbul to meet Erdogan and address an emergency meeting of the Organisation of Islamic Cooperation.
Peters said OIC members were full of praise for the support New Zealand had offered its small, tight-knit Muslim community in the wake of the killings.
"A number of them were weeping and sobbing at the demonstration (of support) by non-Muslim New Zealand towards the Muslim victims," he told reporters.
"It was dramatic and I was told by countless ministers that they've never seen anything of that type."
The body of an Indian student killed in the Christchurch mosque attacks, meanwhile, was returned Monday to her grieving family in Kochi, where relatives remembered a bright young woman dedicated to her studies.
Ansi Alibava, 25, was the first of at least five Indians shot dead on March 15 to be repatriated.
The family planned to hold a funeral ceremony for the masters student in their nearby hometown of Kodungallur.