Pakistan’s effort to end militant financing remains uneven: US
WASHINGTON: As the new government in Islamabad starts work on addressing the concerns related to money laundering and militant financing, a US State Department report released said that Pakistan criminalised militant financing through the Anti- militancy Act (ATA), but its implementation remained uneven.
Pakistan is a member of the Asia Pacific Group on Money Laundering — a Financial Action Task Force (FATF)-style regional body. In June, the Paris-based FATF placed Pakistan on its grey list of countries that could be marked out for economic sanctions if they failed to prevent militant from collecting funds within their domain.
The official US report — released with the State Department’s country reports on militant — also highlights FATF’s concerns about Pakistan.
“The FATF continued to note concern that Pakistan’s outstanding gaps in the implementation of the UN Security Council ISIL (Daesh) and Al Qaida sanctions regime have not been resolved, and that UN-listed entities — including Lashkar-e-Taiba (LeT) and its affiliates — were not effectively prohibited from raising funds in Pakistan, nor being denied financial services,” the report points out.
Washington claims progress on efforts to implement UN sanctions related to designated entities is slow
Last month, Finance Minister Asad Umar told the Senate that FATF had given Pakistan 15 months to comply with these requirements. The minister said FATF had identified 27 deficiencies in the Pakistani financial system, including “currency smuggling, hawala and militant financing of proscribed organisations”.
The minister had told the house that the government would be addressing all the objections raised not only to satisfy the international community but also because it was in Pakistan’s own interest to get rid of militant financing and militancy.
The US State Department in its report acknowledged that Pakistan’s laws technically comply with international anti-money laundering/countering the financing of militant standards, but added that Pakistani authorities “failed to uniformly implement UN sanctions related to designated entities and individuals such as LeT and its affiliates, which continued to make use of economic resources and raise funds”.
The report also refers to a Nov 2017 decision of the Lahore High Court which refused to extend the detention of LeT founder Hafiz Saeed as it judged the government had not provided sufficient evidence against him nor had it charged Hafiz Saeed with a crime.
The US report also examines the National Action Plan that the PML-N government gave to FATF in June this year, noting that the plan contains efforts to prevent and counter militant financing, including by enhancing interagency coordination.
The law designates the use of unlicensed hundi and hawala systems as predicate offences to militant and also requires banks to report suspicious transactions to Pakistan’s financial intelligence unit, the State Bank’s Financial Monitoring Unit.
The US State Department, however, notes that throughout 2017 “these unlicensed money transfer systems persisted throughout the country and were open to abuse by militant financiers operating in the cross-border area”.
Reviewing Pakistan’s efforts to fight militancy, the report notes that Pakistan continued to experience significant militan threats in 2017, although the number of attacks and casualties decreased from previous years.
The report also identifies several major militant groups focused on conducting attacks in Pakistan, including the Tehreek-i-Taliban Pakistan, Jamaatul Ahrar, and the sectarian group Lashkar-i-Jhangvi al-Alami.