The Pakistan’s Problems

At the turn of the Century, in his book “Beyond Belief” Nobel Laureate V S Naipaul had described Pakistan as a ‘criminal enterprise’. While there were the usual howls of protest in Pakistan, the last two decades have validated the prescience of Sir Vidia. It is one thing for people of a country to have a proclivity for criminality, and quite another for the state itself to indulge in criminal behavior. In Pakistan’s case it is the latter. The world can probably turn a blind eye, even hold its nose to the inequity, venality and criminality inside Pakistan. But when that starts to affect other countries and peoples, the international community needs to take strong measures to stop the flow of terror, violence and illegal acts emanating from Pakistan.

Later next month, the Financial Action Task Force (FATF) will hold yet another plenary. Pakistan will once again present its case before the international financial watchdog and try to convince it that it has delivered on all the high-level commitments it had made in 2018 to address international concerns on Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT). On paper, Pakistan will try to prove that it has beefed up its AML/CFT regime, not just in terms of tightening the laws and regulations but also in terms of successfully prosecuting and punishing people involved in money laundering and terror finance. In the last plenary, Pakistan claimed it had met 26 out of the 27 action points. The FATF appeared to have accepted the Pakistani case, but kept it in the ‘Grey List’ pending the delivery on the final point which was successful prosecution of designated terrorists and money launderers.

On the Grey List

The reality is however contrary to every assertion being made by Pakistan before the FATF. Not only has Pakistan not cleaned up its act on AML/CFT, it has no intention of doing so. The reason is simple: the real problem is not that non-state actors are involved in money laundering and terror finance; it is the state agencies that are involved in this activity and they use the non-state actors and criminal networks as a front to carry out their nefarious activities. Equally important is the fact even the actions that Pakistan had boasted of taking against terror finance have been reversed. But most of all, recent events in Europe have shown how Pakistani intelligence agencies are laundering money and financing terrorism in other countries, including in the UK, France, Netherlands, Sweden, Germany and Canada.

Shortly after Pakistan was placed on the ‘Grey List’ the government announced that it had seized over PKR 1 billion from accounts linked to UN designated terror groups. But recently it was revealed that all the seized funds had since been released to the account holders; likewise for assets of designated individuals and entities. But this is just the tip of the iceberg. The real big story has come out London where a Pakistani origin man has been charged for trying to assassinate a dissident blogger based in Netherlands. According to the prosecution, the funds for the assassin were routed through Hawala networks using Pakistani banks and money laundering networks. Clearly, the only lot with any real interest in targeting the blogger was the Pakistani military establishment. The evidence presented in court clearly points at the intelligence agencies in Pakistan, though it does not name them. Nobody else has the baleful influence to skirt around the legal and regulatory framework and put huge amounts of money in a bank account and then launder it through middlemen to give it to the would be assassin. So much for the AML/CFT regime in Pakistan which has been complimented by the FATF.

Terrorism and terrorists

What is important to note is the use of middlemen by the intelligence agency to carry out a criminal, even terrorist action, in the UK. Clearly, if Pakistan had cleaned up the financial system, such middlemen and Hawala operators would have been put out of business. The fact that they have not is in large part because they are being used by the ‘deep state’ for nefarious purposes. It is precisely these criminal networks that also have a nexus with terrorists who use them for laundering and sources their money. These networks do not operate only inside Pakistan but are also operated by Pakistanis settled in Europe and North America. Take for instance the bust in France of a Pakistani network involved in money laundering and fraud using fake companies and forged documents. The French police arrested 11 Pakistani-origin men and seized over €1 million in this particular bust. It is precisely such dubious characters who are used by the Pakistani intelligence agencies to funnel money and to act as front men for criminal and terrorist acts.

Over the last couple of years, there have been other cases of dissident Pakistanis (both Baloch) dying under extremely mysterious circumstances. One such incident happened in Sweden, and the other in Canada. Both were explained away by local authorities as accident or suicide, and not murder. But the London case which was pre-empted, suggests that there was more to these two incidents than is being said by the Sweden or Canadian police. Even if the trail on the cases in Sweden and Canada has run cold, the FATF should demand an explanation from Pakistan on the money laundering in the London case. The Europeans too should ask the Pakistanis some tough questions because the London case documents reveal that there were other Pakistanis dissidents in continental Europe who were on a hit list. This hit list included a journalist in France as well.

It will be nothing short of criminal for the FATF to ignore the latest revelations that have come in the London as well as the Paris cases. Nothing exposes Pakistan’s deceit and deception on AML/CFT more than these cases, which should now become a test case to judge not just Pakistan’s delivery on its high-level commitments to FATF but also to judge the international community’s commitment to stop the export of criminality from Pakistan.