Post FATF: TF Prosecutions and Investigations in Pakistan

Abstract

This research paper delves into Pakistan's efforts to enhance the effectiveness of its countering the financing of terrorism (CFT) regime in accordance with the FATF standards, with a specific focus on TF investigations and prosecutions. The study covers the post-FATF period i.e., August 2022 - May 2023, and analyzes the progress made in TF investigations and prosecutions as compared to the preceding four years. Primary and secondary sources were explored through qualitative and quantitative research methods. Unstructured interviews and focused discussion sessions were conducted with various stakeholders and experts at policy, strategy, and operational levels. The case study research method was employed by examining the ATCs' judgments in TF prosecutions. Analysis of data on TF investigations and prosecutions in the FATF Action Plan and post-FATF periods was done for situation analysis. Survey questionnaires responses from a targeted sample of TF investigators and prosecutors were analyzed to ascertain the operational level issues and gaps in TF investigations and prosecutions. A narrative and thematic analysis approach was adopted. While efforts were made during the FATF Action Plan period to adequately strengthen the legal, institutional, and coordination frameworks and build the capacity of LEAs to establish a sustainable CFT system as per the FATF CFT standards, the effectiveness of TF investigations and prosecutions in the post-FATF period remains a matter of concern. In the post-FATF period, there has been a significant decrease in the initiation of proactive, parallel, and wide-range TF investigations. The number of accused persons arrested and convicted has also gone down by 27% and 73% respectively. There was not a single accused person convicted in Sindh and Baluchistan in a TF prosecution. The progress on MLA requests for international cooperation has not been up to the mark. The convictions in TF prosecutions have decreased by 63%. The inter-agency coordination and implementation gap is hampering the effectiveness of the CFT system. There is a need for dedicated TF investigators and an adequate number of TF prosecutors. The FMU has capacity issues in terms of detecting, developing, and disseminating actionable financial intelligence with CTDs. The proactive role of NACTA and FMU is crucial for the effectiveness of TF investigations and prosecutions in Pakistan. The absence of a unified National CTD hampers the strategic response to terrorism financing. The establishment of National CTD at the federal level is needed to do away with the lack of coordination and the issue of varied levels of implementation of CFT standards in the provinces.