WASHINGTON - Pakistan’s Central Bank has ordered the country’s commercial banks to freeze the accounts of about 4,000 individuals and businesses linked with terrorism.
Central bank spokesperson Abid Qamar told reporters Sunday that the accounts have been suspended under the Fourth Schedule of the 1997 Anti-Terror Act. The law targets elements with links to anti-state activities, hate speech and “activities of religious outfits not yet banned but related with militancy in any way.”
The National Counter-Terrorism Authority, which investigates terrorism in Pakistan, submitted an initial list of 3,500 accounts last month, but more names were later added, Qamar said.
The list reportedly includes Masood Azhar, chief of the Kashmiri Jaish-e-Muhammad militant group; and Muhammad Ahmad Ludhyanvi, leader of the Ahle Sunat Wal Jamaat group. Azhar and Jaish-e-Mohammad, which operates under several names, have been implicated in a number of bombings in India. Ludhyanvi leads a banned group linked to sectarian terror.
Is it enough?
Islamabad is facing the threat of increasing diplomatic isolation over its inability to curb homegrown militancy and the threat it poses to its neighbors. Two U.S. lawmakers have called for Pakistan to be declared a terror state. And analysts say freezing the assets of suspected terrorists may not go far enough.
“I worry the move is just a window dressing that papers over the broader problem in the country. Militant groups have many ways to channel their money through,” said Karachi-based journalist Ali Arqam, who covers security affairs. “It needs iron hands, and we do not see that in Pakistan.”
Washington-based analyst Michael Kugelman says Pakistan’s move to freeze the accounts is a good sign, but it may only be a symbolic gesture.
“Given the various informal and ever-changing mechanisms used by militants to transfer and hold funds, I really do not know if simply freezing accounts will have much of an impact,” said Kugelman, analyst with the Wilson Center, a global policy research group.
Some experts say the list is outdated and incomplete. They say it does not target new branches and aliases of extremist organizations. Most of them raise money through several other names, including their charitable wings.
“It is not credible,” journalist Arqam said of the list. “It has not been reviewed or updated.”
Outside the banks
Lashkar-e-Taiba, which is a U.S. designated Foreign Terrorist Organization, for example, operates under several aliases, including its charitable organizations through which it collects the majority of its funding. According to the U.S. State Department’s report on terrorism, Lashkar-e-Taiba “front organizations continue to fundraise in Pakistan.”
And experts say many of Pakistan’s militant groups don’t use the traditional banking system. They receive the majority of their funds through cash donations. They also receive money through the hawala system, an alternative or parallel system that operates outside of traditional banking and financial channels. The system has largely been used in money laundering.
“People often provide assistance in the form of cash,” Imtiaz Gul, executive director of the Center for Research & Security Studies in Islamabad, told VOA’s Deewa service.
Many militant groups are funded through an affiliation with religious groups.
Some Pakistani businessmen “do not pay taxes to the government, but they do provide funding and donations to these groups because they believe the groups carry out righteous activities,” Gul said.