FATF pressure on Iran, Pakistan India to deal with Pakistan, China

Islamabad: Analysis by Prof. Dr Abdul Jabbar Khan

Pakistan has been given a ‘relief’ period for another five months to “seriously view its action plan on instructions given by Financial Action Task Force, and said until October, Pakistan should do its best to improve counter-terror financing operations in line with an internationally agreed action plan or face actions against it, a global watchdog said the other day.

In yet another statement of Washington by Secretary Pompeo, Islamabad had been asked to be clear on blasphemy laws and sort out the issue related to around two dozen accused under the law and are pending cases under similar charges.

Under the FATF’s related instruction, a warning to Iran seems to be more pressure asking by the US/FATF to do is best in “controlling terror financing and its spread”, news gathered in Islamabad suggest.

The US Trump administration has also asked the International Monetary Fund (IMF) that has concluded a standby arrangement of around six billion US dollar for Pakistan to be more candid asking Pakistan to play an active role to curb allegedly its role in terror funding. It may be mentioned here that there are certain regulations have already been introduced by the central bank and the government to watch and obstruct any such funding that comes in money laundering or supporting the spread of terrorism. The sources in diplomatic circles here believe that the India and US line is to surround Pakistan more and more and exert pressure.

The Financial Action Task Force said it was concerned that Pakistan had failed to complete the action plan first by a January deadline and then again by a May deadline.

“The FATF strongly urges Pakistan toswiftly complete its action plan by October 2019 when the last set of action plan items are set to expire,” the FATF said in a statement.

“Otherwise, the FATF will decide the next step at that time for insufficient progress,” it said after a meeting in Orlando, Florida.

The FATF already has Pakistan on its “grey list” of countries with inadequate controls over curbing money laundering and terrorism financing. But India wants Pakistan blacklisted, which would likely result in sanctions. The meeting besides discussing a host of other issues reviewed Pakistan’s progress of its action plan to deal with terror financing and money laundering.

Pakistan has been on the global body’s grey list since June 2018 for inadequate measures to curb terror financing.

Islamabad had agreed to take a number of steps to curb terror financing under the action plan. The first review of the action plan took place in January where FATF expressed dissatisfaction and extended the deadline till May to comply with a set of recommendations.

Now member countries in its latest review noted that “the FATF expresses concerns that not only did Pakistan fail to complete its action plan items by January deadlines, it also failed to complete its action plan items due in May 2019”.

“The FATF strongly urges Pakistan to swiftly complete its action plan by October 2019 when the last set of action plan items is set to expire. Otherwise, the FATF will decide the next step at that time for insufficient progress,” the statement reads.
The next meeting of the FATF is scheduled to take place in Paris in October where the body will review Pakistan’s case and decide what action can be taken if member countries still find the progress unsatisfactory.

In its latest review, the FATF noted that Pakistan in June 2018 made a high-level political commitment to work with the organisation and the Asia Pacific Group (APG) to strengthen its anti-money laundering (AMT) and counter-terror financing (CTF) regime and address its strategic “counter-terrorist financing related deficiencies.”

Pakistan, it pointed out, did take steps towards improving its AML/CFT regime, including the recent development of its terror financing risk assessment addendum.
“However, it does not demonstrate a proper understanding of Pakistan’s transnational terror financing risk,” the FATF added.

Based on the review, FATF has identified 10 specific areas where it urged Pakistan to continue to work in implementing its action plan to address its strategic deficiencies.

FATF points out 10 Specific Areas

They include, 1) adequately demonstrating its proper understanding of the terror financing risks posed by the terrorist groups and conducting supervision on a risk sensitive basis.
2) Demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations and that these actions have an effect on AML/CFT compliance by financial institutions.
3) Demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services.
4) Demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for terror financing.
5) Improving inter-agency coordination — including between provincial and federal authorities on combating terror financing risks.
6) Demonstrating that law enforcement agencies are identifying and investigating the widest range of terror financing activity and that terror financing investigations and prosecutions target designated person and entities and person and entities acting on behalf or at the direction of the designated person or entities.
7) Demonstrating that terror financing prosecutions result in effective, proportionate and dissuasive sanctions and enhancing capacity and support for the prosecutors and the judiciary.
8) Demonstrating effective implementation of targeted financial sanctions (supported by comprehensive legal obligations) against all 1267 and 1373 designated terrorists and those acting for or on their behalf including preventing the raising and moving of funds, identifying and freezing assets (moveable and immoveable) and prohibiting access to funds and financial services.
9) Demonstrating enforcement against terror financing violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases.
10) Demonstrating that facilities and services owned or controlled by  designated person are deprived of their resources and the usage of the resources.

As there was such an ultimatum to Pakistan, the finance ministry , government of Pakistan said ” government committed to take all necessary measures to ensure completion of the action plan in a timely manner.”

The statement confirmed that the FATF would undertake the next review of Pakistan’s progress in October 2019.It said the FATF meeting reviewed the compliance of a number of countries, including Pakistan — with the international standards on Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT).
“Pakistan was placed by the FATF in its Compliance Document in view of an action plan agreed with Pakistan in June 2018 to strengthen its AML/CFT regime,” it noted.
The ministry insisted that the FATF acknowledged the steps taken by Pakistan to improve its AML/CFT regime and highlighted the need for further actions to implement the action plan.

FATF- Iran being tightened under similar charges of terror funding

A multinational task force said on Friday it is keeping Iran on a financial blacklist for failing to take action to head off funds flowing to terrorists.
The 38-nation Financial Action Task Force (FATF) said it will require more onerous financial oversight if Tehran fails to meet an October deadline for improving its controls.

“The FATF expects Iran to proceed swiftly in the reform path to ensure that it addresses all of the remaining items,” according to the statement, while welcoming “high-level political commitment” to repair the deficiencies.
Treasury Secretary Steven Mnuchin in a speech yesterday called out Iran’s “willful failure to address its systemic money laundering and terrorist financing deficiencies.”

Iran has faced a growing series of US economic sanctions over the past year, as Treasury has blacklisted numerous firms and officials to choke off their access to funds following President Donald Trump’s decision to abandon the 2015 nuclear deal negotiated by his predecessor.

Amid rising tensions in recent days after Iran shot down an American drone, Trump early Friday appeared to preview the tougher stance, however, no sanctions were announced.

The FATF said steps that Iran still must take include “adequately criminalising terrorist financing,” “identifying and freezing terrorist assets,” and ensuring financial institutions verify wire transfer information. The task force also called upon all members “to require increased supervisory examination for branches and subsidiaries of financial institutions based in Iran.”

US President Donald Trump approved military strikes on Friday against Iran in retaliation for the downing of an unmanned $130-million surveillance drone, but pulled back from launching the attacks, the New York Times said.

Blasphemy law under question by US

US Secretary of State Mike Pompeo on Friday urged Pakistan to do more to stop the abuse of blasphemy laws after the release of Asia Bibi, who escaped a death sentence in a case that drew international scrutiny.

Releasing an annual report on international religious freedom, Pompeo estimated that more than 40 others were serving life sentences or facing execution for blasphemy in Pakistan.

“We continue to call for their release and encourage the government to appoint an envoy to address religious freedom concerns,” Pompeo said.

The Christian woman was on the death row since November 2010 after she was convicted on charges of committing blasphemy during an argument with two Muslim women in Sheikhupura, a foreign news agency has reported this.

India being a US Representative in Region?

US Secretary of State Mike Pompeo on Wednesday said that the administration of President Donald Trump has taken a far tougher stand on Pakistan as compared to previous presidents, as he throws his weight behind New Delhi to “deal with” Islamabad and Beijing.

Speaking at the 44th annual meeting of the US-India Business Council, Pompeo called for strengthening of cooperation with India in defence, energy and space, and defended the US vision of a “free and open” Indo-Pacific region — an idea to counter China in the region.

“Under President Trump, we have taken our defence cooperation to new heights solidifying our common vision in the Indo-Pacific and has taken a far tougher stance on Pakistan’s unacceptable support for terrorism,” Pompeo told the India Ideas Summit in Washington on Wednesday.

“We respect India as a truly sovereign, important country, with its own unique politics and its own unique strategic challenges,” he said, adding: “We realise it’s different to deal with the likes of China and Pakistan from across the ocean than it is when they are on your borders.”

Pompeo spoke ahead of a visit to India later this month that follows the re-election of Prime Minister Narendra Modi. The visit will also come weeks after Trump removed New Delhi from decades-old US Generalised System of Preferences (GSP) programme.

India has been the single biggest beneficiary of that programme, which allowed it to export $5.7 billion worth of goods, duty-free, to the US in 2017. “We … hope that our Indian friends will drop their trade barriers and trust in the competitiveness of their own companies,” Pompeo said.

Pompeo will travel to India, Sri Lanka, Japan and South Korea from June 24-30. During the visit “we’ll also push for the free flow of data across borders – not just to help American companies – but to protect data and ensure consumer privacy”, he said.

US bars China supercomputer firms from buying American parts

According to information reaching here the US government has put a ban of purchasing the US computer equipment by China. The US Commerce Department said on Friday it was adding several Chinese companies and a government-owned institute involved in supercomputing with military applications to its national security “entity list” that bars them from buying US parts and components without government approval.

The export restriction announcement adding the firms to what is effectively a trade blacklist is the latest effort by the Trump administration to restrict the ability of Chinese firms to gain access to US technology amid an on-going trade war.
The department said it was adding Sugon, the Wuxi Jiangnan Institute of Computing Technology, Higon, Chengdu Haiguang Integrated Circuit and Chengdu Haiguang Microelectronics Technology – along with numerous aliases of the five entities – to the list over concerns about military applications of the supercomputers they are developing.

The Commerce Department added China’s National University of Defence Technology (NUDT) to the list “because of its use of US-origin multicores, boards, and (co)processors to power supercomputers believed to support nuclear explosive simulation and military simulation activities.”

The Commerce Department said on Friday that since 2015 NUDT has procured items under the name Hunan Guofang Kei University using four separate, additional addresses not already on the entity list. The department said on Friday it is now adding Hunan Guofang and the four addresses to the list.
The companies “pose a significant risk of being or becoming involved in activities contrary to the national security and foreign policy interests of the United States,” the Commerce Department said.

One thought on “FATF pressure on Iran, Pakistan India to deal with Pakistan, China

  • June 26, 2019 at 12:37 pm
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    With all the human, economic and social sacrifices that Pakistan had given in the interest and so-called friendship of Super Power, this is a gift of such activities and relations. Pakistan economy is unstable for such gestures and Pakistan remain under threat from all parts of the globe. Such restrictions and actions do not effect on the countries having a stable economic condition. Pakistan has to find a solution for the stable economic affairs to guard its integrity and honor against such a threat. Unfortunately, poor diplomatic efforts and non-patriotic media with selfish leadership Pakistan stand where such accusations are laid down on its part.

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