A six-member delegation of Asia Pacific Group (APG) could not have come at a worse time, as Pakistan is still making the transition to a government led by Pakistan Tehreeek-i-Insaf (PTI). The APG delegation on its visit does not seem convinced of the measures Pakistan has taken to meet its global obligations against money laundering and terror financing. It is not that the group has entirely rejected Islamabad’s measures. The group, which will present its report to Financial Action Task Force (FATF), has acknowledged the progress Islamabad has made so far in meeting its international obligations.
It is true that Pakistan has taken enough measures on administrative and regulatory grounds to avoid adverse decisions from FATF, yet Pakistan needs to do more. It is shocking that Ministry of Finance, Federal Investigation Agency (FIA), National Counter Terrorism Authority (NACTA) and State Bank of Pakistan (SBP) did not engage an international legal expert on money laundering in satisfying the group. Pakistan needs to work more on the shortcomings in the legal framework that covers non-profit and charitable organisations.
Nevertheless, the group’s acknowledgement of the inherent limitations of a caretaker setup and political transition means that Pakistan can expect some relaxation and grace period to take necessary measures. However, this assumption should not make the authorities lethargic.
The new government of PTI will have to consider this issue and make it its top priority. The coalition government of PTI has hardly one month to take actions to the satisfaction of the group that will make another review of Pakistan’s efforts in countering terror financing.
PTI must devise a plan of action to make sure that the beneficial ownership regime meets transparency standards. While the group has also raised reservations about the preparedness of authorities like Financial Monitoring Unit (FMU), National Counter Terrorism Authority (Nacta) and police, it is hoped that PTI government will work on enhancing capabilities of these institutions as we have already seen the PTI-led police reforms in Khyber Pakhtunkhwa (KP).
Islamabad needs to consider the reservations of the group and take swift steps in addressing the areas where the group has identified problems. However, what PTI need to keep in consideration is the possibility of FATF-APG desire to get more specific commitments, including a crackdown on groups like Haqqani Network and the likes of Hafiz Saeed. Apart from establishing a leak-proof legal framework to curb terror financing, the group will also want progress on actions against those banned organisations that are still operating under new or different names. These organisations are, in fact, FATF’s actual point of concern.