Pakistan will develop a strategy to avoid being put on a global terror financing watchlist, the finance minister said on Monday, after China and Saudi Arabia deserted Islamabad over the issue at a recent meeting in Paris.
Members of the Financial Action Task Force (FATF), an anti money-laundering watchdog based in the French capital, voted last week to place Pakistan on its grey list of nations which are not doing enough to combat terror financing in June, a diplomatic source told AFP.
That gives Pakistan three months to make enough changes to avoid being listed, which could hamper some foreign investment and further strain relations with Washington, where officials have put increasing pressure on Pakistan over its alleged support for militant safe havens.
“We will start meeting on the issue of FATF after March 1 to see what can we do on this and what strategy we can devise,” finance minister Rana Afzal Khan told AFP, adding that Pakistan has not yet received a list of actions it needs to implement.
Observers are doubtful that Pakistan can meet the requirements in time, however.
The move, which was not announced in FATF’s statement at the close of the six-day meeting, came after members had initially been unable to reach a consensus, with Turkey, China and Saudi Arabia holding out, the diplomatic source said. That saw Pakistani foreign minister Khawaja Asif confidently tweet last week that Pakistan had avoided being grey-listed.
But amid a flurry of diplomatic activity a second vote was held, with the U.S. convincing Riyadh to change its vote and Beijing staying silent, the source said.
The decision is a diplomatic blow to Islamabad’s relationship with its “all-weather” friend China, which has invested billions in the country’s infrastructure, and Saudi Arabia, to which Pakistan sent some 1,000 troops earlier this month. “It shows that the people who are concerned about terror financing are pretty broad,” the diplomatic source told AFP.
Pakistan was previously on the list from 2012 until 2015.
Two diplomatic sources in Islamabad told AFP it was targeted again this year over its lack of action against Hafiz Saeed, the alleged mastermind of the 2008 Mumbai attacks, and his charity Jamaat-ud-Dawa (JuD).
JuD is believed to be a front for Lashkar-e-Taiba, the militant group blamed for the Mumbai attacks, which killed 166 people and brought Islamabad and Delhi to the brink of nuclear war.
Saeed, who operates freely in Pakistan, has denied involvement.
This month Pakistan began seizing JuD assets and quietly amended its anti-terror laws to bring them in line with the U.N., a move observers said was in anticipation of the FATF decision.
Rumors of the move have rattled officials and businesses across Pakistan. But there should be “no major impact” to the economy, said Yaseen Anwar, the former central bank governor who help get the country off the list three years ago.
FATF is an inter-governmental body established in 1989 to help combat money-laundering and financing for extremists.