Obligatory headways

With high stakes, Pakistan's dignity enters a crucial week. The Financial Action Task Force's (FATF) plenary session in Paris will be adjudicating the country's performance since October 2019. Pakistan was placed in the Grey List by FATF back in June 2018 and provided with an action plan to complete by October 2019, or slide to the Black List alongside North Korea and Iran. The 27-point action plan mainly revolves around efforts to curb terror financing and money laundering. The October 2019 plenary meeting had taken Pakistan's lack of adherence into consideration with the country having pursued mere 5 tasks out of the provided 27. This raised alarms. Despite the dismal performance, FATF urged Pakistan to complete the Action Plan by February 2020. While FATF provided an additional five months to Pakistan, it was perhaps in latter's own interest to mark improvements in its adherence with FATF's action plan. Pakistan would not want to be demoted to the Black List where it will find it extremely difficult to get financial aid from World Bank, ADB, EU, IMF, etc., which would only prove to a severe drag on its crippling economy. With genuine interests on the horizon, it is natural for the country to make headways and achieve expected compliance by FATF norms. FATF through its 27-point action plan expects Pakistan to curb money laundering, terrorist financing and other related threats to the integrity of the international financial system. In the October 2019 meeting, FATF had decided to keep Pakistan on its Grey List for its failure to curb funnelling of funds to terror groups like LeT and Jaish-e-Mohammad. This specific piece of the reason is crucial as both LeT and JeM have been known to extensively terrorise neighbouring India on several occasions. In fact, New Delhi has been on the lookout to build a strong case against Pakistan for its failure in taking action against terror-financing and the Fake Indian Currency (FICN) menace. In the period that Pakistan got for compliance — October to February — and possible turnaround of its regressive trajectory that may see them blacklisted, Pakistan has made few attempts to woo the members of FATF. Unsurprisingly, just days prior to the scheduled plenary meet, Pakistan announced the conviction of Jamat-ud-Dawa chief, Hafiz Saeed — the mastermind behind 26/11 Mumbai attacks. Hafiz's conviction was no doubt a positive sign yet seems to be a pretence of escaping the FATF's restrictions. While boasting of having convicted Hafiz, FATF must note that Hafiz's sentence can be appealed and is not absolute. This makes it easier for Hafiz to escape prison once the FATF obligation mandate subsides. Likewise, Pakistan had informed FATF in October that JeM chief and UN-listed designated terrorist Masood Azhar, whose outfit masterminded the Parliament attack 2001 and Pulwama carnage last year, was missing along with his family. Hence, there cannot be any action initiated against Azhar. However, Indian intelligence has cited Azhar's exact location — said to be 10 kilometres outside Islamabad — and Indian officials are likely to counter Pakistan's claim that Azhar is missing. While India is prepared to ensure Pakistan does not get any sigh of relief at the Paris meet between February 16–21, Pakistan has cited progress by stating how it has frozen 5500 bank accounts of individuals and groups listed by UN committees.

While FATF takes note of Pakistan's progress, there are also other factors that may play its role in ensuring Pakistan's fate. The very first factor is the chair of the plenary meet — China. An all-weather friend of Pakistan, China has its own vested interest in ensuring Pakistan's welfare at this moment. The heavily-invested China-Pakistan Economic Corridor which passes through Pakistan till the port of Gwadar Port is of great importance to China and it will certainly not want Pakistan to delve into the Black List where the latter becomes completely bereft of financial aid from any of the global institutions. Besides China, there are countries supporting Pakistan's case in Malaysia and Turkey. Together, China, Malaysia and Turkey complete a minimum of three votes for Pakistan to avoid falling into the blacklist. So, a definitive outcome here is that Pakistan will not be blacklisted. However, as far as the Grey List is concerned, Pakistan would still require about 12 votes out of 39 to get out of the Grey List. It is exactly here that western powers may play their card. Depending on their assessment of Pakistan's progress, the latter will either be in Grey List or promoted to White List. A short history of Pakistan's tryst with FATF shows that it has not been in the latter's good books. Back in 2008, Pakistan was blacklisted till 2010. Then it remained in the Grey List between 2010-15. After that, it was placed under the observation of International Cooperation Review Group between 2015-18 to review the risks posed to the international financial system. And, finally, back to Grey List in 2018. There has been a good reason that the country has been under the lens for more than a decade. Shallow improvements resembling a facade will not make any dents. Unless genuine progress is displayed, Pakistan may not find it easy out of the financial watchdog's purview, irrespective of allies in China, Turkey, etc., that may save it from being blacklisted this time. Unless Pakistan itself begins to deplore terrorism in the grassroots, the country will continue to face the backlash of being labelled as a terrorist state by a large part of the globe.