Blow to Pakistan economy if US succeeds to put Pakistan on FATF counter terrorism financial watchlist

Blow to Pakistan economy if US succeeds to put Pakistan on FATF counter terrorism financial watchlist
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WASHINGTON - US along with its ally Britain is moving the Financial Action Task Force on counter terrorism money laundering to act against Pakistan.

FATF had previously warned Islamabad it could be put back on the watchlist without further efforts to crack down on the flow of funds to militants.

Pakistani officials and Western diplomats say that being put on the FATF watchlist could deal a blow to Pakistan’s economy as it would make it harder for foreign investors and companies to do business in the nuclear-armed South Asian nation.

“If you’re put on a terror watchlist, you’re made to go through all the (extra) scrutiny,” Pakistan’s former counterterrorism chief, Khawaja Khalid Farooq, told Reuters. “It can hurt the economy very badly.”

Officials also fear it would be harder and more expensive for Pakistan to borrow money from international debt markets if it was put on the FATF monitoring list.

Ismail said the FATF motion focused on Hafiz Saeed, a Pakistan-based Islamist whom India accuses of masterminding the 2008 Mumbai attacks that killed 166 people. That suggested the United States had put forward the motion at India’s behest, he said.

A spokesperson at the U.S. Embassy in Islamabad said the United States was “absolutely not” acting on behalf of India.

State Department spokeswoman Heather Nauert said ”the U.S. has consistently expressed our long-standing concern about ongoing deficiencies in Pakistan’s implementation of its anti-money laundering/counterterrorism finance regime.

“In addition to broader systemic concerns, this also includes Pakistan’s non-compliance with its commitments under UN Security Council Resolution 1267,” she added.

Resolution 1267 requires all states to freeze the assets of people and organizations on a list established by the resolution, including Saeed and his “Islamic charities.” Washington has designated Saeed a terrorist.

Saeed has repeatedly denied involvement in the Mumbai attacks and says the charitable organizations he founded and controls have no ties with militants.

On Monday, Pakistan announced it had amended its anti-terrorism law to ban militant groups and organizations that are listed as “terrorists” by the United Nations, a move seen to be targeting those charities.

Pakistan’s attorney general, Ashtar Ausaf, told Reuters the law changes approved by the country’s president were meant to reflect obligations under the U.N. Security Council charter.

“We have to march with the changing times,” Ausaf said, adding that the new laws would enable the government to track fundraising activities of all the U.N.-proscribed groups and take punitive action such as freezing their assets.

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