Fact Book

Terrorism Financing:
The report argues that law-enforcement agencies cannot differentiate between a terrorist act and
terrorism financing and how there is little effort to investigate the funding of terrorist acts across
provincial borders. This limited understanding of terrorism financing is also revealed by figures in
the report. Of the suspicious transaction reports analysed by the FMU, only 5.5pc were passed
on to the relevant authorities as related to terrorism or terrorism financing. In comparison, 23pc
were suspected of being related to tax evasion and 9.5pc to corruption.

Of equal concern is an issue which has been highlighted time and again — the capacity of law-
enforcement agencies to successfully prosecute and ensure convictions. This is brought home by
some of the statistics in the report. The figures provided for the last five years show that ANF,
FIA, FBR and NAB were able to ensure only one conviction for money laundering; of 161
prosecutions, ANF was able to secure nil convictions; FIA also prosecuted 175 cases to secure no
conviction; NAB managed one out of four and FBR zero out of 14.

The record on terrorism financing is no better. Overall, the country has registered 228 terrorism-
financing cases in five years and convicted 58 individuals. All this was done at the provincial level.
Apart from the convictions, the provincial CTDs have confiscated over $100,000 over five years.
However, it is suggested that this amount is not impressive considering the extent of the problem
in Pakistan. But the report notes a commitment to fighting terrorism and how 30pc of terrorism-
financing cases were registered between March and October 2018.
Another issue highlighted by the report is the lack of awareness about terrorism financing or money
laundering in sectors other than banks. Here it talks specifically of non-banking financial
institutions such as currency exchanges or insurance firms as well as designated non-financial
businesses and professions (DNFBP) which can include real estate, gems and precious metals.
These two sectors, according to the report, can be used for both money laundering and terrorism
financing but those involved in the two categories, especially the second one, have no awareness
of the issue.
According to the breakdown provided in the report, up to June 2018, commercial banks filed over
70pc of the suspected transaction reports with the FMU; exchange companies in one category filed
25pc while DNFBP filed 0pc. This shows that the issue is not as simple as having laws in place
but also requires raising awareness and changing the way private-sector companies work.
Legislation through presidential Ordinances
Despite facing criticism for “bypassing the parliament and relying on presidential ordinances for
legislation”, the federal cabinet on Tuesday approved more than half a dozen ordinances, majority
of which deal with the judiciary and one specifically relates to amending the NAB Ordinance that
may affect high-profile political prisoners in the country.
The ordinances, which received green signal from the cabinet, included
1. The Letter of Administration and Succession Certificates Ordinance 2019.
2. The Enforcement of Women’s Property Rights Ordinance 2019.
3. The Benami Transactions (Prohibition) (Amendment) Ordinance 2019.
4. The Superior Courts (Court Dress and Mode of Address) Order (Repeal) Ordinance 2019.
5. The National Accountability (Amendment) Ordinance 2019.
6. The Legal Aid and Justice Authority Ordinance 2019 and Whistle-Blowers Act.
The most significant ordinance which got the cabinet’s nod was the one seeking an amendment to
the NAB Ordinance under which those facing charges of corruption worth Rs50 million or more
would only be entitled to be kept in ‘C-Class’ prisons.