Context: The alleged mastermind of the 2008 Mumbai terror attacks, Hafiz Saeed has been sentenced to jail in Pakistan for five-and-a-half years on charges of terror financing. 


BACKGROUND The FIR against Saeed and his associates was registered in July 2019 on charges of terror financing at the Counter-Terrorism Department (CTD) in Gujranwala Saeed, Abdul Ghaffar, Hafiz Masood, Ameer Hamza and Iqbal were indicted in December 2019. This is the first time that Saeed, who has a $10 million bounty on his head by the U.S. government, has been formally convicted of an offence.  The sentencing comes days ahead of a crucial meeting of the Financial Action Task Force (FATF), an intergovernmental organisation combating money laundering and terror financing, that has put Pakistan on its grey list. KEY DETAILS

  • This is the first time Jamaat-Ud-Dawa chief Hafiz Saeed has been convicted and charged in a terror case. However, he has been detained multiple times in the last 20 years.
  • TOTAL NUMBER OF CASES: 23 cases of terror financing were registered by Pakistan’s Counter-Terrorism Department in July last year.
  • Anti-Terrorism Act: Section 11-F (2): Membership, support and meeting related to a banned outfit.
  • Section 11-H to Section 11-K: Charges linked to fund raising for terrorism and money laundering.
  • EARLIER DETENTIONS: December 2001-March 2002 and August 2006- October 2006.
  • HOUSE ARRESTS: December 2008-June 2009; September 2009-October 2009 and January 2017-November 2017.

ABOUT FINANCIAL ACTION TASK FORCE The Financial Action Task Force (FATF) is an inter-governmental body established by G-7 Summit that was held in Paris in 1989 by the Ministers of its Member jurisdictions.   OBJECTIVES: To set standards and promote effective implementation of legalregulatory and operational measures for combating money launderingterrorist financing and other related threats to the integrity of the international financial system.   The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. FUNCTIONS: The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally.   In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse. FATF’S PLENARY: The FATF’s decision making body, the FATF Plenary, meets 3 times per year.   MEMBERSHIP: During 1991 and 1992, the FATF expanded its membership from the original 16 to 28 members. In 2000 the FATF expanded to 31 members, and has since expanded to its current 39 members Its members includes: Argentina; Australia; Austria; Belgium; Brazil; Canada; China; Denmark; European Commission; Finland; France; Germany; Greece;  Gulf Co-operation Council; Hong Kong, China; Iceland; India; Ireland; Israel;  Italy; Japan; Republic of Korea; Luxembourg; Malaysia; Mexico; Netherlands, Kingdom of New Zealand; Norway; Portugal; Russian Federation; Saudi Arabia; Singapore; South Africa; Spain; Sweden; Switzerland; Turkey; United Kingdom and United States. Indonesia is the only Observer State. What are Black List and Grey List of the FATF? FATF has 2 types of lists;

  • Black List
  • Grey List

Meaning of Black List: Only those countries are included in this list that FATF considers as unco-operative tax havens for terror funding. These countries are known as Non-Cooperative Countries or Territories (NCCTs). In other words; countries which are supporting terror funding and money laundering activities are placed in the Black list. The FATF blacklist or OECD blacklist has been issued by the Financial Action Task Force since 2000 and lists countries which it judges to be non-cooperative in the global fight against money laundering and terror funding. The FATF updates the blacklist regularlyadding or deleting entries. Meaning of Grey List: Those countries which are not considered as the safe heaven for supporting terror funding and money laundering; included in this list. The inclusion in this list is not as severe as black listed. Now Grey list is a warning given to the country that it might come in Black list. If a country is unable to curb mushrooming of terror funding and money laundering; it is shifted from grey list to black list by the FATF. Whenever a country comes in the Grey list, it faces many problems like:

  • Economic sanctions from international institutions (IMF, World Bank, ADB etc.) and countries.
  • Problem in getting loans from international institutions (IMF, World Bank, ADB etc.) and countries.
  • Overall Reduction in its international trade.
  • International boycott.

Pakistan was included in the grey list for the first time in 2012 and remained in it till 2015. On 29 June, 2018 FATF Grey listed Pakistan for the second time.  The process began in February 2018 when FATF approved the nomination of Pakistan for monitoring under its International Cooperation Review Group (ICRG) commonly known as ‘grey list’. India ,USA and UK want that Pakistan should be included in the black list of FATF while China and Turkey are opposing this move. Currently Pakistan is in Grey list of FATF. Due to increasing pressure; the Pakistan is striving to comply all the 27 FATF Targets. But as on October 2019; it could manage to comply with just 5 targets out of 27. But Pakistan again saved by its all-weather friend China, currently in the FATF chair. Now the FATF has given another 4 months time to Pakistan (February 2020) to comply with all the 27 FATF targets otherwise it would be blacklisted.

Follow us on:

Facebook: https://www.facebook.com/upscindiathinkers

Instagram: https://www.instagram.com/ias_hub

Join us on Telegram: http://t.me/ExamGuideUpsc

Print Friendly, PDF & Email