Pakistan's removal from Grey List signals shift in western position on India

What this meant was that Pakistan’s compliance with the FATF's 'conditionalities' was, at best, notional, and the evidence would be visible to any effort in good faith to ascertain the realities.

Published: 30th October 2022 05:00 AM  |   Last Updated: 29th October 2022 08:07 PM   |  A+A-

The Financial Action Task Force (FATF) 'grey list' (the list of 'jurisdictions under increased monitoring') has always been quite toothless, and Pakistan's removal from this list says more about wider geopolitical trends than about the effective containment of terrorist finance or money-laundering in that country.

It is useful to recall that on September 2, the Asia Pacific Group (APG), the Sydney-based regional affiliate of the FATF, noted that although Pakistan had achieved 'technical compliance' in 38 out of 40 Recommendations of the Mutual Evaluation Report, 2019, the 'level of effectiveness' was found to be low on 10 out of 11 'Immediate Outcomes' related to anti-money-laundering and countering terrorist financing. This came after a 15-member delegation of the FATF and APG made an 'onsite visit' to Pakistan between August 29 and September 2 to verify the country's compliance. What this meant was that Pakistan's compliance with the FATF's 'conditionalities' was, at best, notional, and the evidence would be visible to any effort in good faith to ascertain the realities.

Anyone scanning the Pakistani print and social media would find advertisements by various terrorist organisations or their listed front organisations, soliciting donations, exhorting the 'faithful' to jihad, khutbahs by top terrorist leaders, commemorating 'martyrs' and memorialising operations. Such announcements also abound in posters pasted across Pakistan. Demands for zakat donations proliferate around Muslim festivals, and the location of Islamist radical madrassas and institutions is publicised without fear or restraint. The global security and intelligence community is well aware of terrorist training camps and launchpads on Pakistan's soil, and of proxy terrorist groups backed by the country's military intelligence.

Drug trafficking is a critical source of revenues for the funding of terrorism in and from Pakistan, and the country remains a major processing and transit area for narcotics from Afghanistan -- the largest producer of opium in the world. Some of the major players of the hawala (illegal international fund transfer) economy continue to be based in Pakistan, including Dawood Ibrahim and controlling elements of the D-Company.

Abruptly, however, on October 21, the FATF declared that it would be taking Pakistan off its 'grey list'. No mention is made of the APG's immediately preceding and adverse observations in the FATF's bland statement justifying the removal. 

It is significant to note that the FATF's determination follows close on the heels of the Joe Biden administration's September decision to seek Congressional approval for $450 million in funding for the 'sustainment' of Pakistan’s F-16 fleet, purportedly to support Rawalpindi's capacities to 'fight terrorism'. The Trump administration had blocked all security assistance to Pakistan in 2018 in view of Rawalpindi's unrelenting support to terrorism, particularly in Afghanistan.

The Biden administration's decision, however, was no surprise. In May 2021, even while Pakistani mischief in Afghanistan was still claiming American lives, the administration told the US Congress that funding for Pakistan would support governance and help tackle extremism. It is clear that the US policy is shifting to its default setting in favour of its 'dirty tricks' partner in the South Asian region, and this will be reflected in the decisions of various international bodies. Pretensions apart, these bodies are not independent or judicial, but rather political forums dominated by the Western powers.

Pakistan's removal from the grey list will have little impact on the trajectory of the ISI-sponsored terrorism in the region. While the FATF grey listing was a convenient stick to give Pakistan an occasional beating in the media or on international forums, its actual punitive or deterrent impact was negligible. Pakistan was aware that if it met with certain conditions, it would eventually escape the ambit with its infrastructure of proxy terrorist groups intact, and this is precisely what has occurred. 

Pakistan-backed terrorism has been, and will be, defeated on Indian soil. Any expectations from the 'international community' or 'global institutions' are simply a misunderstanding of the fundamental nature of these institutions. These are integral elements of the 'global great game', dominated by the Western powers led by the US. There has been a clear shift in the Western position on India since the commencement of the Biden presidency, and this is likely to work to the progressive detriment of India over the coming years.

Ajai Sahni is Executive Director, Institute for Conflict Management, South Asia Terrorism Portal. He can be reached at ajaisahni@gmail.com.



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