Pakistan Acts on Accused Terror Suspect to Avoid Watch List

(Bloomberg) -- Pakistan is racing to avoid being placed on an international terrorism-financing watch list, banning and closing the offices of organizations linked to the suspected planner of the 2008 Mumbai attacks.

Ahead of a review next week by the global anti-laundering Financial Action Task Force in Paris, the government is taking action against Hafiz Saeed’s Jamaat-ud-Dawa and Falah-e-Insaniat Foundation -- which have been accused of being fronts for militant group Lashkar-e-Taiba. More than three dozen properties have been seized by the government and the organization’s ambulances were handed over to the Red Crescent, said Malik Muhammad Ahmad Khan, a spokesman for Punjab province where the charities operate. 

Islamabad has alternated between leaving Saeed alone, because of his domestic popularity, and cracking down on him at the behest of other countries such as the U.S., which view him as an alleged terrorist mastermind.

“They have done it before, but this time the government looks more serious,” said retired Pakistani major general Mahmud Ali Durrani, a former national security adviser and ambassador to the U.S. “This should have been acted on long ago.”

Saeed, who lives in the open in Lahore and has denied the charges against him, was released from his latest bout of house arrest in November -- provoking White House condemnation. He’s long been a thorn in relations between the U.S. and Pakistan, which have drastically soured this year after President Donald Trump accused Islamabad of “lies and deceit” for allegedly supporting militant groups while taking billions of dollars in American aid.

‘Tough Line’

At stake for Islamabad is its ability to tap international markets and avoid further potential sanctions down the line. This week Pakistani officials said the U.S., U.K., Germany and France were pushing to get the nuclear-armed nation added to FATF’s monitoring list, which one government minister on Wednesday called a “conspiracy.”

Pakistan announced this week it had banned Saeed’s charities and changed a law to allow security forces to take action against groups on the United Nations Security Council sanctions list. Islamabad has also repeatedly denied providing safe haven for terrorists and points to multiple military operations it has launched against insurgents that target its own soil.

“At this stage the government people, the military people, they are all talking about taking a tough line,” said Hasan Askari Rizvi, a political analyst in Lahore. “But we don’t know what happens six months down the road” with national elections scheduled in July.

It’s also unclear that being added to a watch list will affect Pakistan’s finances or political behavior. FATF had previously placed Pakistan on its monitoring list in 2012, before removing it three years later. In that period Islamabad negotiated an International Monetary Fund bailout package and continued to tap the global bond market.

No Charges

Pakistan’s actions were greeted with skepticism across the border in India.

“These moves sound quite transparent to try and make sure that next week’s meeting in Paris doesn’t put Pakistan back on the global terrorist-financing watchlist,” said Brahma Chellaney, professor of strategic studies at the Centre for Policy Research in New Delhi. “These are moves that are reversible. Similar moves have been taken against Saeed in the past and they’ve been withdrawn.”

Pakistan’s Prime Minister Shahid Khaqan Abbasi said in an interview this month that more action against Saeed himself was unlikely as the government has no charges against him. He said his administration had “more or less complied” with sanctions against Saeed’s organizations two to three months ago.

It’s also not just Saeed that the U.S. wants Pakistan to act against. Successive administrations have lambasted Pakistan for not moving on militant groups they say are granted sanctuary within its borders and launch attacks in Afghanistan against America-backed forces.

“They’re not addressing the fundamental American concerns,” Chellaney said. “Pakistan is not sincerely cracking down on terrorist networks.”

To contact the reporters on this story: Kamran Haider in Islamabad at khaider2@bloomberg.net, Iain Marlow in New Delhi at imarlow1@bloomberg.net, Ismail Dilawar in Karachi at mdilawar@bloomberg.net.

To contact the editors responsible for this story: Chris Kay at ckay5@bloomberg.net, Ruth Pollard

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