Although Pakistan appears to comply with most of the parameters set by the Financial Action Task Force (FATF) to crack down on proscribed terror groups, it has been quietly unfreezing their accounts and not providing any information about what it is doing to ensure that the money does not go back into terrorist funding, the Asia Pacific Group in a report has said.
Islamabad has partially complied with 36 of the 40 parameters set by the Financial Action Task Force (FATF) at the time of the country’s inclusion in the grey list.
The long-awaited 228-page report, titled “Mutual Evaluation Report 2019” was published on Saturday, a week before the FATF is set to announce its decision to remove or retain Pakistan in its grey list.
The APG report according to news agency ANI stated that Pakistan “has not taken sufficient measures to fully implement UNSCR 1267 obligations against 26/11 mastermind Hafiz Saeed and other terrorists associated with LeT, JuD among other terror groups”.
“Pakistan did not take any actions to freeze the accounts of proscribed organisations during the period under review, with the exception of assets frozen for proscribed organisations that are also listed under UNSC Resolution 1267.
“Since 2016 (Pakistan only commenced record keeping on freezing of accounts for proscribed individuals in September 2016), 4,770 banks accounts have been frozen with a value of PKR 43.21 million (US $320,074), and 1,441 Micro Finance Bank accounts totalling PKR 1.95 million (US $14,444).
“However, detailed statistics on year of freezing action were not provided and it is not clear which terrorist groups the accounts frozen were associated with. Furthermore, the assessment team understands that proscribed individuals are regularly de-listed and their accounts unfrozen,” the APG group, in its report elaborated.
“Pakistan did not provide any information on the value of unfreezing actions or what measures were put in place to ensure that these unfrozen funds were not made available for terrorist purposes once removed from the 4th Schedule. No other financial institution or designated non-financial businesses and professions (DNFBP) has frozen funds pursuant to UNSCR 1373,” it said.
It said that Pakistan did not provide details of when financial institutions or DNFBPS declined to entertain proscribed individuals or entities.
“Pakistan did however mention that over 600 suspicious transaction reports where filed by reporting entities upon refusal of financial services to proscribed individuals or entities. However, Pakistan provided no additional information on the financial monitoring units’ use of these suspicious transaction reports or actions taken by law enforcement agencies, nor an explanation of why this total (600) significantly exceeds the 198 suspicious transaction reports disseminated as terrorism/terrorist financing by the financial intelligence unit of the Federal Investigation Agency (FIA).”
The report would provide a basis for the FATF to make its decision in an upcoming Paris meeting scheduled for October 13-18, keeping in view Pakistan’s compliance with the parameters it had set earlier.
The FATF had in August put Pakistan in the “enhanced expedited follow-up list” (blacklist) for its failure to meet its standards. The global watchdog for terror financing and money laundering had found that Pakistan was non-compliant on 32 of the 40 compliance parameters of terror financing and money laundering.
FATF has, meanwhile, warned Pakistan of action against it if the country does not improve its counter-terror financing operations in line with an internationally agreed action plan by October.
The FATF last year placed Pakistan on the grey list of countries whose domestic laws are considered weak to tackle the challenges of money laundering and terror financing.