“Follow the money”  – Pakistan’s money laundering and terrorism financing trail

“Follow the money” – Pakistan’s money laundering and terrorism financing trail

Follow the money” is a quote from a 1976 film ‘All the President’s Men’.

The principle of ‘follow the money’ advocates that by examining money transfers between illicit parties links can be found to show the complicity of partners in a project of deception. In general such a quote is associated with politicians, however, today it applies more poignantly to terrorism financing.

Pakistani money laundered Altaf Khanani was on the ‘most wanted list’ for his illicit activities for more than a decade until he was arrested in 2015. Money laundering from his organised crime activities, including from drug deals and moving money for terrorist organisations, were reasons to arrest this criminal but a much more serious motivation haunted Interpol and others to capture him. Khanani was financing and moving money, billions of dollars, for jihadist terrorist groups like al-Qaida, Hezbollah and the Taliban.

Once again it is the Islamic Republic of Pakistan that protects the money launderer and the source of terrorism financing for which Pakistan is becoming renowned. The Financial Action Task Force (FATF) President Marcus Pleyer insisted at the Plenary press conference on 23 October that “risks remain” as Pakistan fails to comply with all its terrorism financing standards. The plenary retained Pakistan on the grey-list stating that “all action plan deadlines have expired”.

Both Khanani’s network and Pakistan featured prominently in the so-called FinCEN Files, a probe led by the International Consortium of Investigative Journalists (ICIJ). More than 400 journalists spent 16 months investigating confidential US Treasury documents which were then shared by  BuzzFeed News. According to documents contained in the FinCEN Files, Khanani and his organization reportedly moved an estimated $14 billion (€11.81 billion) to $16 billion annually for drug cartels and terrorist organisations.

“Khanani, the head of the Khanani MLO, and Al Zarooni Exchange have been involved in the movement of funds for the Taliban. Khanani is known to have had relationships with Lashkar-e-Taiba, Dawood Ibrahim, al-Qaida, and Jaish-e-Mohammed,” the US Department of the Treasury said in a press statement in November 2015. All these organisations are based and nurtured in Pakistan with documented connections to Pakistan’s Military and Inter-Services Intelligence (ISI).

The US Acting Under Secretary for Terrorism and Financial Intelligence at the time, Adam J. Szubin, stated that “The Khanani Money Laundering Organization exploits its relationships with financial institutions to funnel billions of dollars across the globe on behalf of terrorists, drug traffickers, and criminal organizations,”

Khanani was arrested in Panama in September 2015 by the  US Drug Enforcement Administration after an extensive manhunt. He was sent to the US and served 68 months in prison. Since his release from prison on July 13 2020, Khanani whereabouts are unknown.

Most alarming however, is that the FinCEN files of Khanani highlighted concerns raised by US officials relating to the transactions of a number of Pakistani companies: A fertilizer company with transactions over $3.8 million from its account to a number of unidentifiable businesses in China, Dubai and Pakistan; three other Pakistani companies were reportedly alleged for producing chemicals for suspicious activities; one of the companies processed over $1.2 million including a payment to an unidentified entity in the UAE under the reference “purchase of seismic explosives.”; and one company had lost its business license in 2009 after it was found smuggling, with another linked to ammonium nitrate.

Pakistan is on the FATF watchlist for a reason – most countries in the FATF membership believe that Islamabad, and the Imran Khan government, have not fulfilled their obligations to curb money laundering and terror financing from its soil. This is the same Imran Khan who recently gave a eulogy to Osama Bin Laden praising him as a martyr. Pakistan remains on the ‘grey list’ despite Imran Khan’s efforts to fool FATF by imposing ‘strict’ financial sanctions on 88 terrorist outfits and their leaders, including Jamaat ud-Dawa’s (JuD) head, Hafiz Saeed, and Jaish-e-Mohammed’s (JeM) Masood Azhar.

The FAFT is not so easily misled – not only does it ask for the documentation but it will also carry out a site visit to check that standards and operating systems are in place. The latest Asia Pacific Group (APG) report which also reviews Pakistan’s money laundering and terrorism financing practices was not very positive in this direction.

There is no doubt that following the money trail clearly indicates the link between Pakistan, Khanani and Pakistani based terrorists groups – And certainly the political system, irrespective of the regime in power is complicit is the activities. In 2016, Interior Minister for Pakistan Nisar Ali Khan announced that the Pakistan People’s Party officials “had massively laundered money with the help of one of the biggest money changers, Khanani and Kalia, and later destroyed the evidence”.

Both Pakistan and Khanani are accused of money laundering and terror financing to militant groups. US officials have long accused Pakistan of supporting militant Islamist groups to use them as proxies to destabilize Afghanistan, Kashmir and the wider region.

Questions must now be raised as to how Khanani, who is and was a convicted money launderer, managed to process business transactions with reputable financial institutions such as Deutsche Bank in Pakistan and the UAE, and in Germany, without any concerns being raised. The sums are not insignificant amounts and, in that, it may be that the scale of such operations are propping up the Pakistani economy which is why it continues to turn a blind eye to such transactions.

The FinCEN files clearly highlight that the UN Security Council’s resolutions 1267 and 1373 both relating to terrorism are not being followed by Pakistan and the European Commission should justify how and why it is supporting Pakistan – a country which is harbouring money launderers, which fund terrorist organisations, all with the knowledge and consent of a government, itself on the money laundering and terrorism financing watch list.

Photo Source: https://www.buzzfeednews.com

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