U.S. May Seek to Put Pakistan on Terrorism-Finance List

The United States has indicated that it will seek to place Pakistan on a watch list of countries that are not doing enough to counter terrorism financing, threatening Islamabad with global isolation, according to a senior Pakistani official.

The United States is likely to introduce the motion next week in Paris, where the Financial Action Task Force, a global body created to fight terrorism financing and money laundering, will vote on the matter, the official, Miftah Ismail, a financial adviser to Pakistan’s prime minister, said.

Pakistan was on the list from 2012 to 2015, and officials worry that being added again could hinder the country’s access to international markets as it prepares to repay roughly $3 billion in debt this summer.

In an effort to stave off returning to the list, Pakistan has quietly adopted sanctions against two groups that the United States accuses of being fronts for the militant group Lashkar-e-Taiba, moving to seize their schools, ambulances and other assets this week. The United States has been trying for years to get Islamabad to move against Lashkar-e-Taiba, which India accuses of being behind the 2008 terrorist attacks in Mumbai that shut down the city for several days and killed more than 160 people.

“We’re talking to the U.S. and trying to get them not to take any action against Pakistan,” Ismail said by telephone. “I think they’re listening to us and I’m more than hopeful we won’t be gray-listed.”

But his optimistic tone faded as he recalled a meeting with U.S. Treasury officials this month. The Pakistani delegation walked away with the impression that “they are still going to put us on the gray list,” he said, calling the Trump administration’s foreign policy inconsistent.

That would undermine moderates in the country, he said.

“We’ll have egg on our faces,” Ismail added. “We pushed for these reforms, although many thought we wouldn’t be successful changing Washington’s behavior.”

A State Department spokesman said that the United States welcomed Pakistan’s efforts against the groups tied to Lashkar-e-Taiba, but that it sought additional information on what “concrete steps” were being taken to deprive them of financing. The spokesman said the Paris meeting would determine the next steps on Pakistan, but refused to elaborate.

The Treasury Department said it would not comment on the sanctions list before the meetings in Paris next week or private meetings expected to be held with Pakistani officials.

President Donald Trump’s increasingly hawkish stance on Pakistan has left officials in the South Asian country worried that it could become politically isolated. Previous administrations have tried to force Islamabad to cut off support for extremist organizations that operate in Pakistan and cross the border into Afghanistan, where they launch attacks on U.S.-led forces.

Civilian officials in Pakistan’s government say privately that they are eager to clamp down on insurgent groups, but that the military and its powerful intelligence wing may not comply. The current government was elected in 2013, taking the helm of a country that has bounced between civilian-led governments and military rule.

The military denies that it supports groups such as the Haqqani network, which has been designated a terrorist organization in the United States. It and others are responsible for some of the largest attacks on the U.S.-led military coalition in Afghanistan, and on the Afghan government.

Last month, the Trump administration suspended roughly $1.3 billion in aidto Islamabad, promising it could be restored if Pakistan clamped down on groups such as the Haqqani network.

But with $3 billion in debt coming due, Pakistani officials worry that the United States could put pressure on global institutions such as the International Monetary Fund to block future loans. As the meeting in Paris next week inched closer, Pakistan decided to move swiftly against extremist groups. “FATF is supposed to be a technical forum. It’s not supposed to be a political forum,” Ismail said, referring to the Financial Action Task Force. He cited concerns that Washington planned to use the Paris meeting to exert further pressure on Pakistan, after receiving an underwhelming response to the January aid cut.

Islamabad reacted coolly when Washington announced that it would cut assistance, pointing out that U.S. aid had declined for years and was too meager to support Pakistan’s economy. But U.S. officials insist the suspension will hurt Pakistan’s ability to service its mostly U.S.-made military hardware, a major blow to a country that has frequent border skirmishes with India, its main rival, and that is struggling to quell a violent insurgency at home.

Publicly, Pakistan denies supporting insurgent groups in Afghanistan, saying that the United States is trying to blame it for the Pentagon’s failure to achieve victory after 17 years in Afghanistan.

“There are large swaths of Afghanistan outside the control of the Afghan government, and that’s where the opposition is,” Pakistan’s defense minister, Khurram Dastgir Khan, said in an interview last week in Islamabad. “Any war of words with the U.S. takes our eye off the prize: a peaceful and prosperous Afghanistan.”

“Has Trump’s onslaught of hostile words increased Afghanistan’s prosperity and democracy?” he continued. “Has it seen Kabul take charge of more of Afghanistan’s territory? No.”