It has been 14 years, since Pakistan-sponsored terrorists struck at Mumbai, the commercial capital of India, exactly on the day the civilian government of Pakistan had sent its foreign minister to New Delhi to discuss the modalities of resume the stalled India-Pakistan dialogue. The evidence of Pakistan’s links behind the bloodbath that went for three days in Mumbai was there for all to see. However, Pakistan chose to ignore India’s requests to bring the perpetrators of the act to justice over the past 14 years, and still gotten away with international endorsement that it has been doing enough to counter terrorism. In this context, it is apt to analyse the recent Financial Action Task Force (FATF) waiver to Pakistan and the strategy it employed to convince the international community of its intent.
It came as a huge relief for Pakistan when the FATF, the global money laundering and terrorism financing watchdog, has finally decided to remove the country from the “grey list”, after reviewing Pakistan’s performance for about four years. Pakistan had to undergo a long process of scrutiny to get itself off the list. The country was added in the “grey list” in the FATF’s plenary meeting in Paris in June, 2018.
Announcing the decision, Prime Minister Shehbaz Sharif tweeted that “Pakistan’s exit from the FATF grey list is a vindication of our determined and sustained efforts over the years. I would like to congratulate our civil and military leadership as well as all institutions whose hard work led to today’s success. (Aap sab ko bohat bohat Mubarak)”[1]
This was the third time Pakistan’s name was added in the list. Earlier Pakistan was in the FATF’s grey list during 2008-2010 and 2012-2015 and had its name removed from the list in February 2015. In its latest decision to remove Pakistan from the list, the statement by the FATF President Raja Kumar read that, “It has two concurrent action plans. After a lot of work by Pakistani authorities, they have largely addressed all of the action plans laid down therein.”[2]
Pakistan has often complained that the FATF has been pretty harsh on it. The editorial of an English daily in Pakistan wrote that the decision by the FTAF to add Pakistan in the “grey list” in June 2018, was “a calculated move to penalise Pakistan and make it fall in line, keeping in view the changing dynamics of power politics and geo-economics.”[3] This point of view is resonated in the claims of some commentators in the country who say that the FATF had been harsh and “often demonstrated visible bias rather than neutrality in its assessment and decision-making processes.”[4] The argument, however, does not hold much water.
On the same day, when the editorial of The Express Tribune criticised some for being harsh on Islamabad, the widely popular Urdu daily, which is also the most circulated paper in Pakistan, Jang, underlined the fact the country’s system to curb financing for terrorism has been weak. The paper wrote in its editorial column that “there are elements in Pakistan who help terrorists financially.”[5] Islamabad may not accept that it is systemically support, but it is quite possible that the loopholes in the system are being used by some individuals to support terrorists who not only engage in terrorism within Pakistan, but also expands its terror activities in other countries, such as India, as the glaring case being the Mumbai attacks in 2008, Pathankot and Uri attacks in 2016 and Pulwama in 2019.
In the former case, it was even accepted by the former spokesperson of the military Maj. Gen. Athar Abbas in 2011 in an interview that there was a “the possibility of some retired officials collaborating with Mumbai perpetrators.”[6] This is not one of such stray remarks that can be ignored. Such hints of the establishment being complicit in acting against such terrorists was highlighted by Nawaz Sharif as well, the three-time Premier of Pakistan in the past. Sharif had said in an interview in May 2018, that “Militant organisations are active. Called them non-state actors, should we allow them to cross the border and kill 150 people in Mumbai? Explain it to me. Why can’t we complete the trial?”[7] he quizzed.
Dealing with terrorists
No concerted action had ever been taken against those who were involved in and financed the terror attacks in Mumbai, such as Lashkar-e-Taiba (LeT), leaders like Hafiz Saeed, Zakiur Rehman Lakhvi and Sajid Mir. This was first accepted by the government of Pakistan in February 2009, saying that Mumbai attacks were planned in its soil saying that “some part of the conspiracy has taken place in Pakistan” and six people were arrested in that regard, included Lakhvi.[8] However, Lakvhi was allowed bail in December 2014. The bail was granted because, according to the lawyer, the “evidence against Lakhvi was insufficient”.[9]
Lakhvi became a free man, until he was again arrested in January 2021, only when Pakistan was pressurized by the FATF to act against terror financing. After several years; and after being constantly pursued by the FATF, it was proven that he was involved in terror financing. “He, with some others engaged in collecting funds and utilised them to nurture terror-financing” read the Punjab Counter Terrorism Department’s (CTD) statement.
In the case of the head of the LeT Hafiz Saeed, no action was taken, maybe because of the support Hafiz had received in the country. After being accused of his involvement in the Mumbai terror attacks, Hafiz organised a rally in Islamabad in September 2013, using provocative language against India even when the US, had already announced an offer of US$10 million for information about Hafiz. The first action Pakistan took against Hafiz, was only in 2017, following a crackdown was launched against Jamaat-ud-Dawa (JuD), a namesake of LeT. Hafiz Saeed was kept under house arrest, according to as DG ISPR as “a policy decision,” which was in the “national interest” of Pakistan.[10] Despite the arrest, there was hardly any action against him. Subsequently, Hafiz was freed from the house arrest, when a court rejected a plea by the government for extension of the arrest.[11] Whatever the reasons given for his immediate release, the long-term reasons appeared to be ineptitude of the state mechanism to hold such people accountable for their actions. Or else, it was complicity shown from the system. If that was not the case, then why was Hafiz Saeed again arrested, soon after Pakistan was added in the FATF list? This time even evidence was found.
In July 2019, the Punjab Counter-Terrorism Department (CTD) did not only book Hafiz, but 13 of the JuD activists “for terror financing and money laundering”.[12] This time, being under pressure from the FATF to strengthen its laws against terror financing and money laundering, action was taken against Hafiz and others. An anti-terrorism court sentenced Hafiz Saeed of 33 years of cumulative imprisonment on April 9, 2022. Some say that the decision was taken because Pakistan was not able to convince the FATF that it was working on the conditions laid down by the international body. When it was reeling under pressure or otherwise, the case of Hafiz, in which he was arrested earlier and released soon had sufficient proof that there is something abnormal in the system. The hush-hush case of Sajid Majeed Mir tells more about the way such cases are being dealt with in Pakistan. Sajid was not arrested despite him being accused of directing the Mumbai Attacks, but finally he was taken in 2022 and that was also secretly. He was sentenced only in May 2022, even that was not made public.[13]
Acting against terror financing
Given its own actions against such people and rare confessions made by both security personnel and top politicians, apart from the writings of the experts and commentators, there are “elements” in Pakistan, on the ground that finance or facilitate financing on terrorism, with the support of some in the system or under the complicity of the administration in Pakistan, and therefore, they were able to get away from being caught. Or even when arrested, they were able to exploit the loopholes in the legal system against terror financing and money laundering in the country. The cases of these elements roaming freely for such a long time, or being arrested at times but released soon thereafter, validate that point. Therefore, it is not in the interest of the country to put blame on the US or India for being responsible that Pakistan is facing harsh conditions from the FATF.
Pakistan is a weaker nation due to its political system and myriad issues ranging from ethnic conflicts, terrorism to acute economic crises. It is either incapable or unwilling to keep watch over such activities, such as terror financing or money laundering. The space it has granted to religious parties/groups and the role they have played in making the society inured to violence, make it even more complicated. Pakistan should be forced to create a stronger legal system and a proper monitoring mechanism for countering money laundering and terror financing.
Therefore, it would be apt if the FATF continues to keep its pressure on Pakistan, knowing fully well here is the case of a nation, which is determined to continue with its romance with terror and use terrorism as an instrument of its policy vis-à-vis the wider world.
Nazir Ahmad Mir
(The author of this article is a Research Analyst, Pakistan Project at MP-IDSA and Associate Research Scholar at International Centre for Peace Studies, New Delhi, India).
[1] Shehbaz Sharif tweeted, October 21, 2022, https://twitter.com/CMShehbaz/status/1583477417750204416
[2] Tahir Sherani, “FATF removes Pakistan from grey list after 4 years’ October 21, 2022, https://www.dawn.com/news/1716183/fatf-removes-pakistan-from-grey-list-after-4-years
[3] “FATF: clean chit”, Editorial, The Express Tribune, October 23, 2022, https://tribune.com.pk/story/2383024/fatf-clean-chit
[4] Ali Shahnawaz and Amna Shahid, “FATF: honest mistakes or deliberate ignorance?”, Dawn, https://www.dawn.com/news/1722222
[5] “FATF ka faisla: khushgawaar imkanaat”, Editorial, Jang, October 23, 2022, https://e.jang.com.pk/detail/269682
[6] “Ex-ISI men likely behind 26/11 attacks, says Athar”, Dawn, April 25, 2022, https://www.dawn.com/news/623876/ex-isi-men-likely-behind-2611-attacks-says-athar
[7] https://www.dawn.com/news/1407192
[8] Salman Masood, “Pakistan backtracks on link to Mumbai Attacks”, New York Times, February 12, 2009, https://www.nytimes.com/2009/02/13/world/asia/13pstan.html?partner=permalink&exprod=permalink
[9] “Mumbai attacks ‘mastermind’ Lakhvi bailed in Pakistan”, BBC, December 18, 2014, https://www.bbc.com/news/world-asia-30529137
[10] “House arrest of JuD chief Hafiz Saeed a policy decision: DG ISPR”, Dawn, January 31, 2017, https://www.dawn.com/news/1311868
[11] “US urges Pakistan to re-arrest Hafiz Saeed”, Dawn, November 25, 2017, https://www.dawn.com/news/1372700/us-urges-pakistan-to-re-arrest-hafiz-saeed
[12] Waseem Riaz, “Hafiz Saeed arrested by Punjab CTD, sent on judicial remand in terrorism financing case”, Dawn, July 17, 2022, https://www.dawn.com/news/1494606
[13] Baqir Sajjad Syed, “Top LeT man Sajid Mir quietly held, jailed in terror financing case”, Dawn, June 25, 2022,
https://www.dawn.com/news/1696600
image – https://www.dawn.com/
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