The United States has cautiously welcomed the steps Pakistan has taken this week to ban individuals and groups on the United Nations Security Council list of “terrorists.” But U.S. officials are not saying whether the move is enough for Washington to ease up on its push to add Pakistan to an international terrorism-financing watch list.
“We look forward to additional information on how these steps are being implemented and what concrete steps are being taken to counter the groups, which is crucial,” a State Department spokesperson said.
According to a Reuters report this week, the U.S. and Britain put forward a motion with the Financial Action Task Force, an international anti-money laundering watch group, to put Pakistan on its grey list. Later, the report said the two countries had convinced France and Germany to co-sponsor it.
A plenary meeting of the task force will begin in Paris on February 18.
A senior Pakistani official said the country is complying with the UNSC regulations and is also briefing the member countries on the steps Pakistan is taking to address the terrorism financing issue.
“Our envoys have already arrived in different member countries and briefing them,” the official added.
Of particular concern to the U.S. is Hafiz Saeed, and groups linked to him. Saeed is listed as a “terrorist” by the U.S. and the UNSC for his alleged involvement in 2008 terror attacks on the Indian financial capital Mumbai that killed more than 150 people, including Americans. The U.S. has a bounty of $10 million for information leading to his prosecution.
Groups linked to Saeed, such as Lashkar e Taiba, which, according to the UNSC, morphed into Jamaat ud Dawa and later Falah i Insaniat Foundation, also are listed as terrorist entities accused of involvement in militancy in India and Afghanistan.
Until now, Saeed, and the latter of these two groups, were on a terrorism watch list in Pakistan but not banned. They could raise funds and operate charitable entities. Saeed was put under house arrest by the government several times, but he managed to get relief from the courts who said there was not enough evidence to convict him.
On Friday, Pakistan amended its anti-terrorism law to automatically ban individuals and entities sanctioned by the UNSC.
On Saturday, Pakistan’s Interior Ministry issued a notice ordering a seizure of all assets, “movable, immovable, and human resource” associated with these groups.
The government of the Punjab province, where the groups are headquartered, has started taking over seminaries and health facilities operated by JuD or FiF, according to local media reports.
In January, the Securities and Exchange Commission of Pakistan issued a circular warning companies against donating money to entities sanctioned under UNSC.
Terrorism finance list carries heavy penalty
While the FATF does not have the power to sanction a country, getting on its grey list can put a tremendous financial burden on a country’s economy.
Banks rely on a network of correspondent banks in multiple countries for international transactions. When a country is on the grey list, the correspondent banks become more wary of the monetary flow with them. To avoid landing in trouble for supporting terrorism financing or money laundering, they put in precautionary measures and the listed country’s banks have to pay the additional cost.
“Every time your bank interacts with the outside world, the cost would go up,” said Khurram Hussain, a financial columnist in Pakistan’s English language daily The Dawn.
He pointed out that this would not just raise the cost of doing business for Pakistan, it also could drive down remittances from Pakistanis living overseas.
Pakistan gets more than $13 billion in remittances every year, most of them from Pakistanis working in the Middle East. Hussain said these people are very sensitive to the cost of remitting money and would switch to informal means of sending money home.
In addition, this could raise the cost for Pakistan of borrowing money from international markets.
Pakistan’s Interior Minister Ahsan Iqbal said putting Pakistan on the grey list would help the terrorist outfits by “adversely impacting funding of our security operations that Pakistan is paying out of our own pocket.”
He also said Pakistan has a “collective will and plan to root out terrorism and extremism from our society,” but greylisting the country would help the terrorist outfits because it would send a signal to the population that the agenda was “foreign and West driven.”
The U.S. accuses Pakistan of taking action against terrorists that threaten its own security but not against those active in either India or Afghanistan, a charge Islamabad denies.
“We stand ready to work together with Pakistan to combat terrorist groups without distinction. We will continue these conversations with the Pakistani government in private,” said a State Department spokesperson.