Facing funding blacklist threat, Pakistan seeks time to act on terror
New Delhi: Pakistan has sought more time from the Paris-based Financial Action Task Force (FATF) to curtail the activities of terrorist groups on its soil, worried that a knock-on effect could drag the nation’s struggling economy.
Islamabad told a group of countries, including the US and India, through an intermediary that it needed some more time to put in place measures that would cut funds to terrorist groups and restrict their activities, two people familiar with the development said, requesting anonymity.
Islamabad wants the reprieve in order to ensure it is not put on FATF’s “blacklist" from the current “grey list", where it has been since June. It is worried that such a censure could take place when FATF meets next month in the US, the second of the two people cited above said.
India is unlikely to relent, with senior ministers and government officials on Thursday insisting that, if anything, New Delhi would press for action against all terrorist groups and their leaders who endanger the lives of Indian citizens.
Pakistan’s message on the FATF listing was conveyed during negotiations between various countries on a US- and French-backed proposal to blacklist Jaish-e-Mohammed (JeM) terrorist group chief Masood Azhar by the United Nations (UN). Azhar, wanted by India for several terrorist attacks, most recently the Pulwama suicide bombing that killed 40 CRPF soldiers in February, was on Wednesday designated a terrorist under UN norms.
In February, FATF warned that Pakistan had made only “limited progress" on curbing money laundering and terror financing.
FATF is an intergovernmental body tasked with promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. Given FTAF’s importance in the international system, if it blacklists Pakistan, that would mean Islamabad would find it harder to access international markets at a time when its economy is sputtering.
There is no direct legal implication of the FATF blacklisting, such as binding sanctions, but it brings the full weight of extra scrutiny on Pakistan from international regulators and financial institutions that can impede trade and investment flows.
On Thursday, finance minister Arun Jaitley told reporters in New Delhi that India wanted “Pakistan downgraded on the FATF list".
India’s external affairs ministry spokesman Raveesh Kumar later told reporters that “India will keep up its efforts at international fora to ensure that action is taken against those terrorist groups and their leaders who endanger the lives of our citizens". “Let me make it very, very clear—we do not negotiate with any country on terrorism and on matters related to the security of the country," Kumar said when asked if there was any quid pro quo in designating Azhar a terrorist under UN norms.
He made it clear that India expected Pakistan to act against Azhar in accordance with the obligations placed on it by the 1267 Sanctions Committee.
Pakistan is expected to “freeze the funds and other financial assets of Masood Azhar; the second is the imposition of a travel ban and third (is that) there will also be an arms embargo to prevent direct or indirect supply of arms to the individual. Now Pakistan is responsible to the international community to take such actions as demanded by the UN sanctions committee", he said.
Sharat Sabharwal, former Indian high commissioner to Pakistan, however pointed out that while the designation of Azhar was a “big win symbolically," Pakistan was unlikely to relinquish its use of terrorism as an instrument of state policy towards India.
A third person familiar with the developments said that though the Lashkar-e-Taiba terrorist group—blamed for the 2008 Mumbai attacks—and its chief, Hafiz Mohammed Saeed, have been designated terrorists by the UN, “they are free to roam around Pakistan and carry out anti-India activities".
“There have been efforts in Pakistan to integrate Saeed into the political mainstream. What India has achieved (designation of Azhar) is a victory that piles moral pressure on Pakistan," the person said. “It focuses world attention on the fact that Pakistan has a large number of UN-designated terrorists and terrorist groups on its soil."
Given the focus on it due to the designation of Azhar and the upcoming FATF meeting, Islamabad could rein in anti-India terrorist groups for a while, this person said. But no major change was expected—not until “Pakistan takes a conscious decision to turn away from using terrorism as a policy towards India".
This opinion was reflected in the views expressed by intelligence and security officials watching the situation in Kashmir. “It must be understood that Azhar is the head of an organization, which is now a well-oiled machine. So whether or not he’s designated an international terrorist matters little to the JeM. Their recruitment and training process will continue, as it has these many years," said a senior intelligence official, requesting anonymity.
For JeM, the hierarchy is well-defined and clearly spelt out. A local handler or recruiter in Kashmir scouts for boys and initiates the process of radicalization that involves educating them about jihad and the need to battle Indian forces. The local handler reports to a contact person across the border at a local JeM training centre in Pakistan, who, in turn, is answerable to his contact person, usually in Rawalpindi.
“Masood Azhar is the top boss. He controls the entire organization. The major attacks are planned by him and then instructions are passed down the hierarchy. Reconnaissance activities, cadre recruitment and training are not overseen by him. He will continue doing what he’s doing, with active encouragement by Pakistan," said the fourth person familiar with the development.
The terror outfit’s rise in Kashmir has set off alarm bells in India. According to senior intelligence officials, 530 boys from Pulwama and Shopian joined JeM in the past year. Of these, 360 were killed by security forces in 2018. “We have inputs that point to a much, much bigger strike than what was carried out in Pulwama. We don’t know what form or shape it will take, or when it will happen, but we are adequately preparing for it just like we do for all other attacks when we get inputs," said a special operations group official of the Jammu and Kashmir Police.