Going grey: on Pakistan and the FATF watch list

The Financial Action Task Force (FATF) that monitors countries on action taken against terror-financing and money-laundering has decided to place Pakistan back on its watch list, or “greylist”, from June. The decision is both appropriate and overdue, given Pakistan’s blatant violation of its obligations to crack down on groups banned by the Security Council 1267 sanctions committee that monitors groups affiliated to the Taliban (which originally included al-Qaeda affiliated groups), such as the Lashkar-e-Taiba, Jaish-e-Mohammed and the Haqqani network. Their leaders like Hafiz Saeed and Masood Azhar continue to hold public rallies and freely garner support and donations. In the process, both the LeT and JeM, which continue to praise and claim credit for terror attacks in India, have grown their bases in Pakistan, with fortress-like headquarters in Muridke and Bahawalpur that the authorities turn a blind eye to. By doing this, successive Pakistani governments have jeopardised ties with India, and shown disregard for the outcry against terrorism worldwide. One violation was a Pakistani court’s bail to Zaki-ur-Rehman Lakhvi, LeT operational commander and a key planner of the November 2008 Mumbai terror attacks. Under the 1267 sanctions ruling, banned entities can get no funds, yet Lakhvi received the bail amount, and the authorities have since lost track of him.


It is surprising, then, that the first round of talks of the International Cooperation Review Group that makes its recommendations to the FATF plenary failed to reach the consensus needed to list Pakistan, despite a formidable team of the U.S., U.K., France and Germany proposing the resolution against it. That the initial support for Pakistan came from China, Saudi Arabia, Turkey and the Gulf Cooperation Council countries is cause for concern in New Delhi, given the recent diplomatic outreach by India. Equally significant, however, is China’s turnaround in the plenary session two days later, when it dropped objections to the resolution, indicating that its support for Pakistan is negotiable and not set in stone. The FATF listing will not miraculously change Pakistan’s behaviour, and this is not the first time it has been listed as a country with “strategic deficiencies” in countering terror-financing and money-laundering. However, if the greylisting comes as part of a concerted campaign to hold Pakistan accountable, and pressure is ratcheted up with financial strictures on its banks and businesses and targeted sanctions imposed against specific law enforcement and intelligence officials, it may yet bear fruit. The hope is that such sanctions will persuade Pakistan to stop state support for these terror groups and become a responsible player on the global stage and a responsive neighbour.