Pakistan’s removal from the terror watchdog’s ‘grey list’ doesn’t mean it is out of the woods yet

It has come as a huge relief for Pakistan that it has been removed from the Financial Action Task Force’s “grey list” after four years of being intensely monitored. It was not the first time that the country had come under scrutiny by the international money laundering and terrorism financing watchdog, but the targets set this time were certainly much tougher.

It took four years of hard work by the Pakistani authorities to strengthen the laws and to act more resolutely to combat terror financing and money laundering to get the country off the unwanted list.

Not surprisingly, both the Pakistan Tehreek-e-Insaf government and the current rulers have been quick to take the credit for steering the country out of the grey list. Some attributed the exit to the success of the Pakistan Democratic Movement government’s diplomacy. It is certainly not the case. It took some rigorous reform measures carried out by successive governments and the security agencies that helped us cross the barrier.

Pakistan was handed two action plans comprising 34 points that required Islamabad to bring in anti-money laundering and anti-terrorism laws in line with international requirements. It took over four years for the state to achieve these targets. The country was also required to take action against some militant groups and their leaders. There was a real danger that Pakistan would be put on the blacklist if it failed to comply with the action plan outlined by the global watchdog. This would have had serious consequences for the country.

Although Pakistan is no longer subject to the Financial Action Task Force’s increased monitoring process, it does not mean that we are out of the woods. Instead of congratulating themselves on exiting the grey list, the civil and military leadership must ensure the continued enforcement of the action plan. It is not just a matter of satisfying the Financial Action Task Force; a strong anti-terrorism policy is also critical for our own national security.

It is true that Pakistan’s inclusion on the grey list was mainly the result of our failure to counter terror financing and growing militancy. There may also have been some geopolitical reasons for keeping Pakistan on a harsher and longer list. But it was essentially our own policy failures that landed us in this unwanted situation.

Pakistan was put on the grey list in 2018 for “deficiencies in its legal, financial, regulatory, investigations, prosecution, judicial and non-government sector to fight money laundering and combat terror financing considered a serious threat to the global financial system”.

The Financial Action Task Force was established in 1989 to curb the threat that the illegal flow of money posed to the banking system and financial institutions. It is an inter-governmental body with international standards meant to prevent such illegal activities and their harmful consequences.

“In 2001, the development of standards in the fight against terrorist financing was added to the mandate of the Financial Action Task Force.” After 9/11, the watchdog body issued “Eight Special Recommendations”. The Financial Action Task Force had to revise its standards in 2003, as money laundering evolved new techniques to sustain itself and proliferate.

The year 2018 marked the third time that Pakistan was put on the increased monitoring list by the international watchdog since 2008 when the country was first grey-listed for not taking enough measures to restrain terror financing and money laundering.

It exited the list in 2010 only to be put on it again from 2012 to 2015. The country managed to exit the list on these occasions. But successive governments could not stop terrorist financing or apprehend wanted militant leaders. That was the main reason why the country was put on the watchlist so often.

It was apparent that the situation was far more alarming when Pakistan found itself yet again on the grey list in 2018. With the looming threat of being blacklisted, the state took the matter more seriously. As has been reported, the country cooperated with the “Financial Action Task Force and its affiliates to strengthen its legal and financial systems against money laundering and terror financing to meet international standards” in line with the Financial Action Task Force’s recommendations. The military leadership played a key role in bringing on board both the government and the opposition to take ownership of key reforms.

A major obstacle in the way of avoiding being blacklisted was removed with the conviction of Hafiz Saeed, the leader of the banned Lashkar-e-Taiba, on terror financing charges. He was sentenced to 33 years’ imprisonment by an anti-terrorism court this year. His alleged role in the 2008 terrorist attacks in Mumbai caused him to be put on the most wanted global terrorist list. No government in the past was prepared to apprehend him.

These strenuous and consistent efforts by the state finally got Pakistan off the grey list. But any slackness in the enforcement of anti-terror financing laws or a reversal of anti-terrorism policies could land the country back on the watchlist. In that event, there would also be a danger of being put on the blacklist. The threat is real if the political leadership across the spectrum does not take ownership of a national counterterrorism policy.

Any reversal would be disastrous for national security. The rise of militancy in the last one year is alarming and raises questions about our seriousness in rooting out the menace. According to a report by a local think tank, there has been a 51% rise in terrorist attacks in the last one year. The return of militancy in Swat and in the former tribal districts is ominous.

Earlier this month, suspected militants fired on a school van in Swat, killing the driver. The incident triggered widespread protests in Khyber Pakhtunkhwa. It is an extremely dangerous situation. Pakistan needs to act to contain the rising militancy that threatens its national security before it is too late.

This article first appeared in Dawn.