What is FATF?
An independent inter-governmental body that acts as a global watchdog of financial crimes, ensuring that the global financial system is safe from misuse by the terrorists and other miscreants.
It designs and promotes policies and recommendations to target money laundering, terrorist financing and other threats to the global financial system. It was started on the behest of the G7 in 1989 and is headquartered in Paris.
FATF and Pakistan
Pakistan was placed on FATF's grey list in June 2018, giving it 15-month to complete the implementation of a 27-point action plan.
FATF's subsidiary body Asia Pacific Joint Group (APJG), examined Pakistan's performance on key issues related to terror financing and money laundering and rated 'poor' in the final review, based on the answers submitted to 125 questions asked. It was held in Bangkok, in September 2019. Pakistan's action did not match up to APJG’s standard. On 40 compliance parameters, Pakistan was non-compliant on 30. On 11 effectiveness parameters, Pakistan was adjudged as Low on 10. On August 22, the APJG placed Pakistan in the Enhanced Expedited Follow Up List (blacklist) for its failure to meet standards.
The review report suggests that posibility of Pakistan getting under blacklist is high.
What ‘blacklisting’ would mean for Pakistan?
It would give a big hiccup to Pakistan. Analysts have warned that if Pakistan gets the tag of 'blacklist' it is going to adversely affect its already panting economy.
Pakistan's economy is struggling because of the deep balance of payments crisis and new IMF-funded austerity measures. This essentially means Pakistan will face scarcity of new capital and investment following the measure. Pakistan would lose potential investors and would struggle to seek loans from the global financing market.
It will affect Pakistan's USD 6 billion loan program with the International Monetary Fund (IMF). Pakistan's name under blacklist would increase its financial problem and seeking aid from international avenues would become tougher.
India’s efforts to push Pakistan under the blacklist
India is optimistic about the ill fate of Pakistan during the plenary FATF meeting and India has been adopting various diplomatic offensive strategies to slip Pakistan into the blacklist. But it won't be a cakewalk either
The China factor: In June, China, an all-weather ally of Pakistan, took charge of the inter-governmental body. With China taking the pivotal role, India's job has become tougher.
It took India a decade to get Jaish-e-Mohammed (JeM) chief Masood Azhar designated as a global terrorist by the UN in April as China kept on posing as a roadblock in the process.
Considering the situation, Chinese President Xi Jinping's slated visit to India would be closely watched. The Xi-Modi informal summit next week is likely to happen in Chennai on October 11-12.
However, ahead of the Xi-Modi meet, Pakistan Prime Minister Imran Khan is going to meet Jinping and China's top leadership. He will attend the China-Pakistan Business Forum in Beijing on October 8 for the Promotion of International Trade. Khan is likely to use the platform to woo investors.
However, it is highly anticipated that Pakistan would talk on FATF and urge China to stridently back him at the plenary meeting.
The Saudi visit: National Security Advisor Ajit Doval was on a two-day visit beginning Tuesday to Saudi Arabia -- the first Arab country to get full membership of the FATF in June this year.
Doval met Saudi Crown Prince Mohammed bin Salman (MBS) to get his support in India's bid to blacklist Pakistan in the upcoming session.
He also met his Saudi counterpart Dr Musaid Bin M Al Aiban and other senior Saudi officials, India’s Ambassador to Saudi Arabia, Ausaf Sayeed, said.
“NSA Ajit Doval was on a short visit to Saudi Arabia, during which he had detailed discussions with Crown Prince Mohammed Bin Salman. The two sides reviewed bilateral, regional and international issues and reviewed strong and fraternal bilateral ties between the two countries. Saudi Arabia and FATF in mind, Doval makes a quick trip to Saudi, meets MBS India is set to establish a Strategic Partnership Council, co-chaired by PM Modi and Crown Prince Mohammed Bin Salman,” Sayeed tweeted on Wednesday.
International support: India has been reaching to the 39 members -- 37 countries and two regional organisations (Gulf Cooperation Council and the European Commission) for a long time to swing them in favour of India.
On the eve of recently held United Nations General Assembly in New York, PM Modi and External Affairs Minister S Jaishankar met their counterparts of these FATF countries, sources told The Indian Express.
At UN, Modi met leaders from Belgium, France, US, UK, Italy, New Zealand, South Africa among others and Jaishankar met his counterparts from Australia, Brazil, Canada, China, Germany, Italy, Netherlands, Singapore, Turkey and Japan in New York. On the sidelines of the 74th UNGA, Jaishnakar also met his counterparts from the two regional organisations in the FATF — the GCC and the EC.
Moreover, on his way to New York, Jaishankar met leaders from Finland and his counterparts from France, Germany, Canada.
Separately, Doval and Jaishankar also visited Russia.
India's attempt at amassing global support was also evident at a General Assembly Third Committee -- it deals with social, humanitarian affairs and human rights issues -- where India called for increased cooperation between the UN and FATF to deal with the nexus of terrorist groups and transnational organised criminal networks that helps raise funds for terror financing and recruiting and other illicit activities across borders.
"Terrorist organisations are increasingly drawing sustenance by using transnational organised criminal networks for illicit activities to raise funds. Crime syndicates are in cahoots with terrorists, providing them services such as counterfeiting, money laundering, arms dealing, drug trafficking and smuggling terrorists across borders," first Secretary in India's Permanent Mission to the UN Paulomi Tripathi said on Thursday.
What is Pakistan planning to do?
Khan headed to the US to attend the United Nations General Assembly session in New York with a key objective to persuade US President Donald Trump for relief from the tough conditions Pakistan is likely to face because of actions by FATF and IMF.
“The FATF is going to meet in Paris next month of October where it will decide Pakistan’s fate. The same month, the IMF will also initiate a review of the first quarter of Pakistan’s output under USD 6 billion programme loan,” a cabinet member told The News.
“Pakistan wants relaxation in the position of the FATF and the IMF against its services for the peaceful exit of US troops from Afghanistan,” the member said.
Though President Donald Trump has cancelled talks with the Taliban following a car bomb attack in Kabul that killed an American soldier and 11 others, the US administration “still hopes that Pakistan is in a position to influence the Taliban for peaceful exit of US troops from Afghanistan,'' the minister, who was not identified by the report, told The News.
A top official privy to the development on the front of FATF told the Pakistani daily that the country is left with no option but to launch a diplomatic offensive to win the support of Saudi Arabia, China, Turkey and Malaysia ensuring the FATF’s decision is in its favour.
Conclusion
Modi, jaishankar and Doval had been meeting global leaders and sketching a strong case for India. New Delhi is confident that Pakistan would be dragged under the blacklist during the crucial meet next week. Despite strict warnings, Pakistan has largely been non-compliant on all parameters stipulated by the FATF.
Pakistan Prime Minister Imran Khan in September alleged that the Modi-led government is trying to bankrupt Pakistan and push it into the blacklist of FATF.
The crucial meet will decide the fate of Pakistan -- whether it will be expelled from the grey list, continue to be in it or downgraded to the blacklist.
Its friend China, traditional ally Turkey and Malaysia would play an important role as Pakistan needs the support of three FATF members to avoid backlashes of the blacklist.
One of the key objectives during Khan's New York visit was to lobby hard to avoid getting blacklisted. He, however, failed to impress other FATF member-states and is counting on support from Malaysia and Turkey in particular.
Pakistan has been under the FATF radar for its complicity towards terror groups like Lashkar-e-Taiba (LeT), Jaish-e-Mohammed (JeM), Haqqani Network, among others. In addition, proscribed terrorists like Hafiz Saeed and Azhar Masood are either regularly seen seeking donations and volunteers for armed rebellions in India, or making calls for jihad in Kashmir from the inner recesses of GHQ Rawalpindi.
