Hassan Aslam Shad
The February FATF Plenary has ended with the expected outcome: Pakistan has done “well” but not “well enough”. In other words, Pakistan remains on the FATF grey list. Of the 27 action points, we are told Pakistan has complied with 24. Federal Minister for Industries and Production Hammad Azhar has touted it as an achievement. He has called it Pakistan’s “90% compliance” with FATF targets, despite the “challenging timeline given to it [Pakistan]”. He has also assured that the country cannot get blacklisted.
Pakistan was placed on the FATF grey list in June 2018. Since then, Pakistan’s performance has been reviewed several times. Ostensibly, Pakistan has come a long way since it was placed on the grey list. For example, after the October 2019 plenary, FATF had noted that, of the 27 action points, Pakistan had “largely addressed” only 5 items and achieved a “varying degree of progress” on the remaining 22.It is in this context that Minister Hammad Azhar has taken a positive view and commended Pakistan’s efforts.
Without taking away credit from Minister Hammad Azhar and his team on the FATF front, it would be unfair for me not to highlight some deep-rooted structural flaws in our system. If we are not willing to look inward and do a course correction, we will continue to fall foul of international requirements. At the end of the day, the choice is ours.
First is the rather abysmal response of the State in the aftermath of the FATF grey listing. Possibly because Pakistan had earlier exited the FATF grey list in 2015, it was assumed that a “chapter and verse” similar response would suffice to get Pakistan extricated from the grey list. This was a mistake. There is no guarantee in international relations that what worked on one instance (in 2015) will work again.
Second, there was a noticeable delay in understanding the “sum and substance” of FATF’s requirements. The crux of FATF’s requirements relate to anti-money laundering (AML) and combatting financing of terrorism (CFT). The AML and CFT requirements, in turn, flow from two United Nations Security Council Resolutions: 1267 and 1373 pertaining to Al-Qaeda and Taliban. Amongst other things, these two Resolutions require countries to choke terrorist financing, impede the movement of terrorist funds, freeze their assets, and pass domestic legislation that mirrors the requirements of these Resolutions. The ‘house-keeping’ requirements under these Resolutions were the result of increasing scrutiny of Al-Qaeda and Taliban by the international community. FATF was merely the enforcement tool for these two Resolutions. Did we not know throughout about these two UNSC Resolutions and what they required from us (like they did from any other country)?
Third, inordinate time was spent blaming India for its role in getting Pakistan grey listed. Let me be clear: it was indeed India which managed, through its relentless lobbying, to get Pakistan listed on FATF. India’s malign designs towards Pakistan are well-known and it doesn’t take a rocket scientist to figure that out. But endlessly harping on India and playing the ‘victim’ card did two things: it made Pakistan look weak and, worse, showed an intent to deflect blame. All that is not good when it comes to global perceptions.
Fourth, our metric of ‘success’ needs a reset. We continue to joyously celebrate India’s failure to get us blacklisted. Apparently, we cannot get blacklisted because of the vote of some 3 odd ‘friendly countries’ that support us in FATF. This makes me wonder: is this the low bar that we have set, the ‘worth’ that we ascribe to ourselves? Victory for us, instead of being moved to the white list, is avoiding the backlist. This is a defeatist mentality. It also shows our India obsession which has made us myopic in our thinking. Unless we discard it, we will continue to aim at the wrong goalpost.
Fifth, we are attributing our continuing grey list status to the U.S. We believe the U.S. would want to keep us on the grey list until our ‘services’ are required for the Afghan peace process. There may be some truth in this. After all, law is often times corroded by politics and transformed into a tool of coercion. But this isn’t something we can change. What we can change, however, is how we choose to respond.
Sixth, we manage to continually get all the bad optics and press . When Ehsanullah Ehsan escapes Pakistan’s custody in dubious circumstances, or Daniel Pearl’s killer is set free after more than a decade, it only reinforces the world’s deep-rooted perceptions about Pakistan. These are cold, hard facts whether we like them or not.
What is rather troubling is that the remaining 10% of the work required from Pakistan is, perhaps, 90% of the work. This is the proverbial ‘eye of the storm’. I say this because it is with reference to CFT. If after two and a half years, we are still unable to convince FATF about our compliance with CFT requirements, then this is deeply troubling. Getting this remaining 10% completed will require a deep dive to close all loopholes. Compliance will not only be ticking all the right boxes but showing that those boxes have been ticked. In other words, this will require a mix of skill & street smartness (read: strong diplomatic push).
Lastly, a few words in response to the suggestion that Pakistan should take up India at FATF after the release of the EU DisinfoLab Report which confirms its malicious agenda against Pakistan. As mentioned above, this is not the time for this battle. First, Pakistan should extricate itself out of this FATF mess and ensure that it never lands in the FATF net again. Once Pakistan takes steps to move up on the dominance hierarchy of international relations, it can consider lawfare options against India. However, focusing on India at this stage will not only give no positive result but will also sap us of precious energy that we should be expending elsewhere.
No one knows what the outcome of the FATF plenary in June will be when Pakistan’s progress is reviewed. Pakistan may exit the grey list. It could, however, also remain on grey list. But what won’t change are the facts on the ground. While we may not have landed on the FATF grey list solely because of our own mistakes, let me say this: we are managing to stay there because of our own lacklustre performance.
In Greek mythology, Sisyphus was condemned to infinitely rolling up a boulder on an incline which would fall back on its weight. If we want to avoid a Sisyphean fate, we should ask ourselves why we repeatedly keep landing in such uncomfortable and embarrassing situations. Soul searching begins with asking hard and uncomfortable questions and then honestly answering those questions. For a change, can we do some soul searching for our own sake?
Hassan Aslam Shad is a practicing international lawyer based in the Middle East. He is a graduate of Harvard Law School with a focus on international law.