"In conference rooms far removed from South Asia's violence, Pakistan will once again present itself as a responsible counterterrorism partner, armed with compliance reports, legislative amendments, and assurances of reform. On paper, Pakistan's financial regulations increasingly resemble those of many developing democracies. On the ground, however, the networks that finance and enable terrorism continue to adapt and operate with troubling resilience. The widening gap between form and function is precisely what Western policymakers must confront as FATF prepares its next round of assessments."
"The Compliance Illusion Pakistan's removal from the FATF grey list in 2022 was widely portrayed as a success story. Officials pointed to new anti-money laundering laws, terrorist financing prosecutions, and institutional reforms as evidence of a course correction. FATF itself acknowledged technical improvements, yet it also emphasized that effectiveness, not legislation, remains the ultimate benchmark. That distinction has proven critical."
Pakistan presents strengthened financial regulations and compliance documentation to international watchdogs while terrorist-financing networks adapt and persist. Legal reforms and prosecutions produced technical improvements leading to removal from the FATF grey list in 2022, but effectiveness remains the decisive criterion. UN-designated groups such as Jaish-e-Mohammad and Lashkar-e-Taiba exploit humanitarian crises to solicit funds under the cover of aid and mosque reconstruction. Figures connected to JeM orchestrate campaigns that aggregate micro-donations and cryptocurrencies through digital wallets (EasyPaisa, SadaPay, JazzCash) to evade detection. The disparity between formal compliance and operational effectiveness allows resilient financing channels to survive.
Read at The Cipher Brief
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