Pakistan could face financial sanctions from FATF, say analysts

General view with Faisal Mosque in Islamabad, July 13, 2008. (REUTERS)
Updated 19 February 2018

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.”


Biggest swimming pool in Russia’s Muslim south bans women, causing outcry

Updated 22 January 2020

Biggest swimming pool in Russia’s Muslim south bans women, causing outcry

MOSCOW: The biggest swimming pool in Russia’s Muslim-majority North Caucasus region has banned women, prompting anger from rights activists and others who have accused the sports complex of discrimination.
The Anzhi Arena spa-complex near Makhachkala, the capital of the internal Russian republic of Dagestan, announced its policy change on the Instagram social media platform on Monday.
“From Jan. 20 onwards attendance of the pool is open only to men,” it said.
The decision has sparked heated debate among residents of the mountainous region, where traditional social values and conservative interpretations of Islam often put it at odds with large parts of European Russia where more liberal values prevail.
The swimming pool said its decision to deny entry to women, who were previously only admitted on Fridays for women-only sessions, was financially motivated.
“Unfortunately, there were hardly any visitors during women’s days,” the RIA news agency cited the spa complex as saying on its Instagram page, which has now been set to private.
“Specifically because of this, after a thorough analysis and evaluation, the difficult decision was made that keeping days for women open in our pool was not viable.”
It is common in the North Caucasus region to find sports facilities offering men and women access on separate days of the week. But a complete ban on women using the pool goes against the Russian constitution, activists said.
Fatima Abdulkhalimova, 31, said she could no longer use the pool despite working there as an instructor.
“I do demonstrations, show people the correct technique, and now I’m not allowed to enter the water,” Abdulkhalimova, a former professional swimmer, said.
“I think it’s to do with religion, I believe it is because a lot of religious guys come here,” she said.
Access to the pool had initially been permitted for both men and women, she said, before being restricted to Fridays only for women.
If having women-only days was not financially viable, then why not simply return to the earlier, mixed-gender system, Abdulkhalimova questioned.
Three women from Dagestan have now filed a complaint to the regional Prosecutor’s Office accusing the sports complex of unconstitutional gender-based discrimination, a copy of the document, shared by Olga Gnezdilova, a lawyer with the Rights Initiative Project, showed.
One of the complainants is Svetlana Anokhina, editor of a local online media platform focused on women’s rights. She said the practice of separating public spaces by gender was on the rise.
“I have a daughter here and she has three daughters too. I’m angry because... I’m afraid for them. I don’t want them to live in a special ghetto for women,” Anokhina, who is based in Makhachkala, said.
One woman, who said she frequently used the pool, said she had been refused a membership pass last month.
Commenting on a post on Instagram she wrote that the pool’s administrators had told her she couldn’t buy a pass because there was not enough locker room space for men.