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.”


Arrests follow rape of Indian anti-trafficking activists

Updated 10 min 28 sec ago
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Arrests follow rape of Indian anti-trafficking activists

  • At least 60 NGOS in four networks are working on a memorandum asking the state to protect activists
  • More recently it brought in the death penalty for those who rape children under the age of 12 following a national outcry over the gang rape

NEW DELHI: Police have made a series of arrests in connection with the abduction and rape at gunpoint of five anti-trafficking campaigners in the central Indian state of Jharkhand early this week.

Khunti police station officials, where the incident happened, told Arab News that three people have been arrested, including the head of the school where the play was being performed. 

Police superintendent Ashwini Kumar Sinha said a leader of a local movement called Pathalgadi instigated the accused, saying that the play performers were against the movement and should be taught a lesson. 

Pathalgadi is a political movement whose followers recognize their village councils as the only sovereign authority and views all outsiders suspiciously.

Activists working in the area say the incident has left them shocked and worried for their safety.

Earlier this week, nine activists were abducted while performing a street play in Kochang village and driven into a forest, where they were beaten and the women raped.

The activists were from the nonprofit organization Asha Kiran, which runs a shelter in the Khunti district for young women rescued from trafficking. Activists say that while such incidents are rare, the abductions have shaken the community.

“There is definitely fear now,” said Rajan Kumar, of Sinduartola Gramodaya Vikas Vidyalaya, a nonprofit group campaigning against people trafficking in the district. 

“But people have to work. We need to do more to take members of the village council into our confidence.”

Rajiv Ranjan Sinha, of the Jharkhand Anti-Trafficking Network, a coalition of 14 organizations, said the incident has frightened everyone.

“We’ve never had to face this before,” Sinha said. “But it will definitely have an implication. New people will be scared to go into the field.”

On Saturday, several non-profit organizations called for a silent protest march at 10 a.m. in the state capital Ranchi on Sunday.

At least 60 NGOS in four networks are working on a memorandum asking the state to protect activists and to take seriously the issue of violence against women.

“We are not only NGO workers, but we are female also,” a spokeswoman said. “There is a lot of fear among workers now.”

India has a poor record of sexual violence against women — at least 39,000 cases were reported in 2016, the latest government data available. Activists say many more incidents go unreported.

The country changed its rape laws and introduced Protection of Children Against Sexual Offences legislation after the rape and murder of a 19-year-old student in December 2012 in the Indian capital.

More recently it brought in the death penalty for those who rape children under the age of 12 following a national outcry over the gang rape and murder of an 8-year-old girl in the northern state of Kashmir.

The girl was kidnapped, drugged and raped in a temple where she was held captive for several days before being beaten to death.