US, UK move to put Pakistan on terror funding watch list

15 February 2018

The United States along with the United Kingdom has put forward a motion to place Pakistan on a global terrorist-financing watch list with an anti-money-laundering monitoring group, according to a senior Pakistani official.

Pakistan has been scrambling in recent months to avert being added to a list of countries deemed non-compliant with terrorist financing regulations by the Financial Action Task Force (FATF), a measure that officials fear could hurt its economy.

The US and the UK have reported to the FATF that Pakistan hasn't complied with terrorism regulations, Rana Muhammad Afzal Khan, a junior Pakistani minister for finance and economic affairs, told Bloomberg by phone on Wednesday. Khan said the body's review is scheduled for early next week and that the charges were a ''conspiracy''. Pakistan gave a comprehensive reply to the allegations on 5 February, ''but now they are adding some more items,'' he said.

Pakistan's de facto finance minister, Miftah Ismail, told Reuters that the United States and Britain put forward the motion several weeks ago, and later persuaded France and Germany to co-sponsor it.

The United States has been threatening to get tough with Islamabad over its alleged ties with Islamist militants, and last month President Donald Trump's administration suspended aid worth about $2 billion.

Islamabad, which denies assisting militants in Afghanistan and India, has reacted angrily to US threats of further punitive measures.

A meeting of FATF member states is due to take place next week in Paris, where the organization could adopt the motion on Pakistan. The FATF, an intergovernmental body based in Paris, sets global standards for fighting illicit finance.

''We are now working with the US, UK, Germany and France for the nomination to be withdrawn,'' Ismail told Reuters by telephone from Europe. ''We are also quite hopeful that even if the US did not withdraw the nomination that we will prevail and not be put on the watchlist.''

Pakistan had been on the FATF watchlist from 2012 to 2015. The FATF had previously warned Islamabad it could be put back on the watchlist without further efforts to crack down on the flow of funds to militants.

Pakistani officials and Western diplomats say that being put on the FATF watch list could deal a blow to Pakistan's economy as it would make it harder for foreign investors and companies to do business in the nuclear-armed South Asian nation.

Ismail said the FATF motion focused on Hafiz Saeed, a Pakistan-based Islamist whom India accuses of masterminding the 2008 Mumbai attacks that killed 166 people. That suggested the United States had put forward the motion at India's behest, he said.

A spokesperson at the US Embassy in Islamabad said the United States was ''absolutely not'' acting on behalf of India.

State Department spokeswoman Heather Nauert said, ''The US has consistently expressed our long-standing concern about ongoing deficiencies in Pakistan's implementation of its anti-money laundering/counterterrorism finance regime.

''In addition to broader systemic concerns, this also includes Pakistan's non-compliance with its commitments under UN Security Council Resolution 1267,'' she added.

Resolution 1267 requires all states to freeze the assets of people and organisations on a list established by the resolution, including Saeed and his ''Islamic charities.'' Washington has designated Saeed a terrorist.

Saeed has repeatedly denied involvement in the Mumbai attacks and says the charitable organisations he founded and controls have no ties with militants.

On Monday, Pakistan announced it had amended its anti-terrorism law to ban militant groups and organisations that are listed as ''terrorists'' by the United Nations, a move seen to be targeting those charities. (See: Hafiz Saeed's JuD, others finally declared terror outfits by Pak)

Pakistan's attorney general, Ashtar Ausaf, told Reuters the law changes approved by the country's president were meant to reflect obligations under the UN Security Council charter.

''We have to march with the changing times,'' Ausaf said, adding that the new laws would enable the government to track fundraising activities of all the UN-proscribed groups and take punitive action such as freezing their assets.

On Tuesday, US Director of National Intelligence Daniel Coats on Tuesday told a Congressional committee Pakistan will continue to threaten US interests by deploying new nuclear weapons capabilities, and also continue providing safe havens to terrorists operating in India and Afghanistan (See: Pak won't stop needling India as it draws closer to China: US intel).

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