Pakistan is again looking to China, Malaysia and Turkey to help it get off lightly for failing to fully implement an action plan to tackle terror funding when the Financial Action Task Force (FATF) assesses its case in October, people familiar with developments said on Tuesday.
Ahead of FATF’s working group and plenary meetings between October 18 and 23, the Asia-Pacific Group (APG), a regional affiliate of the multilateral watchdog, reviewed Pakistan’s actions to counter-terror financing and money laundering at a virtual meeting on September 15 and 16.
At the virtual meeting, China expectedly backed Pakistan’s actions to counter-terror financing, despite the fact that it is yet to fully deliver on 13 of the 27 points in the action plan, the people cited above said on condition of anonymity.
When Yao Jing, China’s outgoing ambassador to Pakistan, made a farewell call on the de facto finance minister Abdul Hafeez Shaikh in Islamabad on September 17 – a day after the APG meeting – he was quoted in an official statement as expressing “his confidence that FATF’s October review will go well for Pakistan”.
“Pakistan will again be looking at China, Malaysia and Turkey to back it at the FATF plenary meeting as the support of only three members is enough to thwart any planned action,” said one of the people cited above.
Malaysia was appointed co-chair of APG in July, while Australia is the permanent co-chair and host country for the regional body.
While relations between India and Malaysia had soured under former Prime Minister Mahathir Mohamed, the new government formed after his resignation has been working quietly to improve ties with New Delhi, the people noted.
Ahead of the FATF plenary meeting, Pakistan will have to submit a progress report by September 30.
But on July 28, Pakistan’s Financial Monitoring Unit (FMU) director-general Lubna Farooq told a parliamentary standing committee on finance and revenue that the country had complied with only 14 of the 27 points in the action plan while stakeholders “were working on the remaining 13 action points”.
The people further noted that Pakistan had resorted to its usual tactic of some high-profile actions in the run-up to the FATF plenary to create the impression that it was delivering on its counter-terror financing commitments.
For instance, an anti-terror court in Lahore indicted four leaders of the banned Jamaat-ud-Dawah (JuD), including Hafiz Saeed’s brother-in-law Abdul Rahman Makki, in four more cases last week.
A joint session of Pakistan’s Parliament also passed three bills aimed at implementing commitments made to FATF last week, while it tightened curbs on eight Lashkar-e-Taiba (LeT) leaders, including Hafiz Saeed, Jaish-e-Mohammed (JeM) chief Masood Azhar and Dawood Ibrahim by taking steps in August to enforce United Nations’ (UN) sanctions against them.
As things stand now, the people said, Pakistan is unlikely to be moved from FATF’s “jurisdictions under increased monitoring” or the so-called “grey list” to the “high-risk jurisdiction subject to a call of action” or “black list”, despite mounting frustration among the watchdog’s members over its repeated failure to deliver on the action plan, the people said.
This frustration was reflected in the statement issued after FATF’s plenary in February: “All deadlines in [Pakistan’s] action plan have expired. While noting recent and notable improvements, the FATF again expresses concerns given Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the [terror financing] risks emanating from the jurisdiction.”
