THE Sword of FATF has been hanging on Pakistan for the last many years. It is a strategic tool to straighten the countries that try to defy the strategic balance. For the last three decades the mantra of ‘do more’ was used. It was ensured the country remains at the mercy of crumbs offered in return, pliant leadership continued to bleed the country’s resources to stack money abroad and buy properties. During the Cold War era, later Soviet occupation of Afghanistan, US war, the vary powers that are yielding FATF stick used strategic location of Pakistan to further their strategic interests.
The FATF concept was created by G-7 countries in 1989, the initial membership was 9, it was extended to 19 and then 31. Currently it has 39 members. Over 200 countries committed themselves to judicial jurisdiction. Beside the Interpol, score of banking organizations and watch-dog, including UN monetary oversight unit is also associated. With the passage of time it is tuned to be an effective tool in the hands of big powers. The membership criterion is through majority of votes and consent of founding members. Entry of countries as members also reflects the big powers’ preferences.
Pakistan became its victim for three basic reasons, Pakistan being blamed for exporting terrorism. Second, money laundering which facilitated terrorists. Third, massive money laundering by politicians, businesses and even people from all strata. Support to terrorism accusation firstly came from India which was perpetuating atrocities on Kashmiris and even Sikhs. It is in 1993 IPGO Annual meeting India first time raised boggy of terrorism to suppress the Sikh Movement. There are almost 22 pro- independence and seventeen active pro-independence movements in India. The blame, that Pakistan is supporting them was dumped on it as a strategy first by India and that the money laundered is being siphoned to terrorists. Afghanistan is other area where the US blamed Pakistan for its failure. Ironical it is US itself which lost the battles world over.
Whereas it is India, which has been siphoning money to terrorists through Afghanistan and other countries against Pakistan. Latest UN report link Indian connection with DAES and involvement in terrorist attacks at Karachi Stock Exchange, Chinese Consulate at Karachi, Jalalabad and even in Stockholm. Foreign Policy Magazine in Aug 9 issue has also indicated in this direction. Indian banks carried out 3200 suspected transactions over US $ 1.3 Billion Also massive purchase of properties by Pakistanis was visible world over and even western media highlighted this: a fact which can’t be denied. A large number of politicians and businessmen from all over the world are involved in money laundering. Panama was a watershed which catapulted not only leading Pakistani politicians on the world stage but also smeared the name of Pakistan in the world arena.
FATF is now a geo-political tool; more than a check on financial laundering it is used for strategic arm twisting. Previous Pakistani regimes failed to curb money laundering mostly due to vested interests. This created a critical turning point, giving India and some other powers to lash at and accuse Pakistan of money laundering, through FATF, to hide their own failings in the brutal oppression of Kashmir, supply of funds to nationalist elements in Baluchistan, funding for 5th generation war imposed on Pakistan, and money laundering from the very states. Reportedly the flight of capital from India to England is to the tune of US $ 15000.
If Pakistan has failed, the very states that sit as judge are heaven for money laundered, England, off shore islands, France, Switzerland. In ME Gulf states (to say safe heavens). Billions of dollars are stacked in these countries and money launderers enjoy luxurious life. These countries have enacted laws which give protection to these runaways. Yet, it is for the benefit of Pakistan to curb money laundering. Money laundering thus is not only means but also cause and incentive for the corrupt.
Ironically these heaven countries are the founder watch-dogs of FATF. It is time Pakistan should be following two-pronged approach, one complete fulfilling the conditionalities of FATF to get out of grey-list, which is also to the benefit of Pakistan. But, State Bank must ensure banks do not stifle to genuine clients, reportedly banks staff now indulging in these practices not only pressurizing clients but also impeding businesses. Major sufferers are SMEs. Second, Pakistan must be adopting aggressive diplomacy. Fool proof cases be built up against India and other countries that are major players in money laundering, and no doubt India is a major financier in terrain and subversion. Invoke friends to push the case in FATF.
Reportedly, after UN Money Laundering Watchdog reports and the US banks reporting, in the next FATF meeting Indian may be played on with list. Pakistan must exploit this opportunity to expose India. Also the countries that are the destination of money launderers be brought in FATF’s jurisdiction and laws be made to return looted money. Present excuse of political persecution be made conditional to courts judgments.
—The writer, a retired Brigadier, a veteran of 1965, 1971 wars with SJ, SI, and IS Bar Gallantry. A senior Defence and Industry analyst.