Pakistan’s escape, at least for the moment, from the so-called black list of the global Financial Action Task Force (FATF) that acts against terror financing in the world has surely disappointed Delhi. It also seems to reinforce Delhi’s critics, who believe Pakistan can’t be “isolated” even if its army brazenly violates its international legal commitments on fighting terrorism. Disappointment and criticism arise from the fact that the government of Narendra Modi had mounted a sustained campaign in the last few years to apply the existing international norms against money laundering and terror financing on Pakistan. The grey list is about putting countries on notice and seek time-bound compliance with a range of FATF benchmarks. If countries fail to comply, they get on to a black list that calls on nations to take additional measures against financial transactions involving Pakistan’s jurisdiction. At the moment, only two countries are on the black list — Iran and North Korea.
Pakistan was first put on the grey list in 2012 but got off it in 2015. That was when the FATF and its procedures caught Delhi’s serious political interest. Once the Foreign Office put it at the top of its diplomatic priorities, the FATF became part of the public discourse on Pakistan. The intense Indian effort resulted in Pakistan being put on the grey list again in 2018. There is a good case for tempering India’s disappointment at the international community’s reluctance to put additional pressure on Pakistan’s support for terrorism, despite the FATF’s acknowledgement that Pakistan is in full compliance with only five of the 27 benchmarks Islamabad had to address.
The FATF has certainly issued a stern warning to Pakistan that it could get to the black list if there was no progress by February 2020. There is no guarantee, of course, that Pakistan will pay the price four months down the road. For the FATF, in the end, is a multilateral mechanism, where bilateral political considerations do impact on the outcomes. Pakistan can thank China, Turkey and Malaysia, whose support helped it escape the black list. There is nothing to suggest that the Pakistan policies of the three countries might change any time soon. Is “isolating Pakistan”, then, a “fool’s errand”? No, not by any measure. Although Delhi can’t bet on complete success in its FATF campaign, the effort has generated unprecedented international pressure on Pakistan Army’s support to cross-border terrorism.
Sustaining the international mobilisation also turns harsh light on Islamabad’s allies — especially China — that talk the talk on opposing terrorism and improving ties with India but refuse to walk the walk.