A similar question was pending before the apex court whether Italy would make a compensation of $136,1500 (INR 10 crore) to be apportioned among the victims of the tragedy. The issue came up before the Supreme Court early this year following a setback in the Permanent Court of Arbitration (PCA) in 2020 with Italy’s claim of its jurisdiction over the trial of marines being accepted.

Ironically, the Indian apex court had raised a concern in 2012 if Italy was trying to silence the victims by paying compensation. The Italian government, however, clarified that the compensation paid to the families of killed fishermen was not “blood money” to save the accused Marines from prosecution but “international humanitarian assistance to help rebuild their lives.” The court had questioned the clause in the agreements Italy had signed—with the families of the two killed fishermen and the owner of the fishing boat—which asked them not to participate in any court proceedings related to the cases arising from the February 15 incident.

It was on 15 February 2012 that the Indian fishermen, Jelestine and Binki, on board St. Antony were killed in a firing when the Italian-flagged commercial oil tanker MV Enrica Lexie was on its way from Singapore to Egypt with a crew of 34 accompanied by six Italian navy marines. St. Antony was getting back from the Lakshadweep sea when the Italian marines fired at them without any provocation. It was reported that after two months the Italian government had entered into an agreement with Jelestine’s wife Doramma and Binki’s two sisters paying them INR 1 crore each as compensation in return for the promise that they would not participate in the criminal case. Another agreement was also signed between Freddy, owner of the fishing boat St Anthony and the lone eye-witness to the shooting incident. The Italian government paid INR 1.7 million to Freddy. When the matter came up before the apex court, Justice Lodha and Justice Gokhale who handled the case were ‘astonished’ by some clauses in the agreement which went against Indian law. “There cannot be an agreement not to give evidence in a case. Our law does not permit this and it is a prosecutable offence,” they said. Italy, however, did not object to the proceedings. But the case went from one level to another—eventually ended up with PCA.

The Enrica Lexie case reached the final phase of its travel a few months ago when the Governments of India, Italy, and the south Indian state of Kerala had come to an agreement on the question of compensation following the apex court’s firm position on the issue with the final Award from PCA in 2020. The case had, in fact, caused some setback in India-Italy relations in the last decade. The question of ‘jurisdiction’ and ‘trial’ of the Italian marines, who killed the Indian fishermen, became a matter of dispute from the state of Kerala to the Supreme Court of India and then to the PCA at the Hague.

Many experts pointed out that the PCA decision of May 2020 eventually came as a setback to India with Italy’s claim of its jurisdiction over the trial of marines being recognised. India’s Ministry of External Affairs (MEA), however, noted that the PCA “upheld the conduct of the Indian authorities with respect to the incident under the provisions of the United Nations Convention on the Law of the Sea (UNCLOS).” The Tribunal held that “the actions of the Italian military officers and, consequently, Italy breached India’s freedom of navigation under the UNCLOS Article 87(1)(a) and 90.” It also observed that “India and Italy had concurrent jurisdiction over the incident and a valid legal basis to institute criminal proceedings against the Marines.” According to MEA, the PCA “rejected Italy’s claim to compensation for the detention of the Marines.” Moreover, it was also a relief for India that the Arbitral Tribunal decided that “India is entitled to payment of compensation in connection with loss of life, physical harm, material damage to property and moral harm suffered by the captain and other crew members of St. Antony.” The PCA Tribunal further held that “the Parties are invited to consult with each other with a view to reaching agreement on the amount of compensation due to India” (India, Ministry of External Affairs 2020).

Following the PCA Award, the Government of India filed a special leave petition before the Supreme Court on 3 July 2020 seeking disposal of the criminal proceedings against Sergeant Massimiliano Latorre and Sergeant Salvatore Girone.

The Chief Minister (CM) of Kerala, however described the Award of the Tribunal and the consequent decision of the Union Government—seeking the disposal of all cases before the apex court—as “shocking’ and “unfortunate.” Requesting to consider a review petition to address the major contention of India, the CM said that all issues, including the compensation to the victims, needed to be taken up. The Government of Kerala also got involved in the subsequent negotiations for compensation (The Economic Times, 3 July 2020).

The Supreme Court, which in September 2015 had ordered a stay on all proceedings in Indian courts during the pendency of the case before the PCA, did not fully concur with the Union Government’s stand. The court took a position that the compensation issue could not be diluted under the terms of the PCA “award.” It requested all parties, including the relatives of the victims, to be heard, before a final settlement.

The move to settle the matter—with the Italian Government reportedly having deposited the amount of compensation to the relatives of the victims—was expected to be completed after the Government of India submitting an affidavit to the apex court with the consent of all parties. As per the terms reported, INR 4 crore each will be given to the dependents of the two deceased fishermen—Valentine from the Kollam district of Kerala and Ajesh from the Kanyakumari district of Tamil Nadu. The owner of St. Antony will also get INR 2. crore for the damage. Even as this gets underway, others onboard the fishing vessel had lodged a complaint with the Union and the State governments over the attempts to settle the issue by violating the order of PCA which, they pointed out, acknowledged the right to compensation for all 11 people on board including a 14-year-old boy.

Trajectory of the Case

According to the Indian Coast Guard, the shooting had occurred on 15 February 2012 when St. Antony was around 20.5 nautical miles (38.0 km) off the Indian coast within the Contiguous Zone (CZ) area of India’s exclusive economic zone (EEZ). Following the incident, the Indian Coast Guard intercepted the oil tanker and it was instructed to move to the Kochi port. The two Italian marines—Latorre and Girone—who were held responsible for shooting while on guard duty were arrested on 19 February on charge of murder under Section 302 of the Indian Penal Code (IPC).

In April 2012 the Italian government with the mediation of some people was reported to have come to an agreement with the legatees of the two deceased fishermen. They had also impleaded themselves before the High Court of Kerala. Subsequently, the legatees said that they would withdraw all the case against the Italian marines. As per the agreement—which the High Court also knew—the Italian government would pay a compensation of INR 1 crore to the victims’ families. This was later criticized by the Supreme Court. The criminal case later went from the Supreme Court to PCA.

Meanwhile, in April 2013, the National Investigation Agency (NIA) of India filed a first information report against the two marines for charges of murder, attempted murder, mischief and conspiracy (National Investigation Agency 2013). The following year saw the case being charged under the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation (SUA). Italy came down heavily against the move and warned that the prosecution under the SUA Convention would amount to converting the incident as an act of terrorism. Even as the bilateral ties between the two countries soured on these issues, India decided to drop the SUA charges and downgraded the case. Yet, even as the legal proceedings in the apex court got underway, Italy tried to mobilise support from the European Union (EU), NATO and its other allies (European Union 2015). New Delhi, however, criticised the EU for its appeal to submit the case to international arbitration.

Notwithstanding India’s objections, Italy took up case before PCA on 26 June 2015 under Article 287 and Annex VII, Article 1 of UNCLOS. Italy argued before the PCA that by directing the Enrica Lexie to change course and proceed into India’s territorial sea and escorting her to Kochi, India violated Italy’s freedom of navigation, in breach of UNCLOS Article 87(1)(a), and Italy’s exclusive jurisdiction over the Enrica Lexie, in breach of Article 92 of UNCLOS and abused its right to seek Italy’s cooperation in the repression of piracy, in breach of Article 300 read in conjunction with Article 100 of UNCLOS. (UNCLOS 1982). It was also contended that by initiating criminal proceedings against the Italian marines, India violated Italy’s exclusive right to institute penal or disciplinary proceedings against the Marines, in breach of Article 97(1) of UNCLOS. On the other hand, India argued that by firing at St. Anthony and killing the fishermen aboard that vessel, Italy violated India’s sovereign rights under Article 56 of UNCLOS and India’s freedom and right of navigation under Articles 87 and 90 of UNCLOS.

The Tribunal examined the facts and the contentions put forth by Italy and India. On 21 May 2020, the Arbitral Tribunal—having determined that it has jurisdiction over the dispute—unanimously held that India’s counter-claims are admissible and that Italy had violated aforementioned provisions of the UNCLOS. The Award was notified by the PCA on 2 July 2020 (Permanent Court of Arbitration 2020).

However, the Tribunal also held that the Italian marines “are entitled to immunity in relation to the acts that they committed during the incident, and that India is precluded from exercising its criminal jurisdiction over the Marines.” Taking note of Italy’s commitment to resume criminal investigations into the St. Anthony firing incident, the Tribunal directed India to take the necessary steps in order to cease the exercise its criminal jurisdiction over the Marines.

The Tribunal award further said that the shooting at the St. Antony “amounted to physical interference with the freedom of navigation of the St. Antony and constituted a breach of Article 87, paragraph 1, subparagraph (a), and Article 90.” It said that based on the limited evidence available to the Arbitral Tribunal, as a consequence of such breach, crew members of the St. Antony “suffered loss of life, physical harm, material damage to their property (including to the St. Antony itself), and moral harm.” “India is accordingly entitled to payment of compensation in respect of such damage, which by its nature cannot be made good through restitution” (Ibid).

Meanwhile there were criticisms in India that there was a mishandling of the case at some stage. According to K.P. Fabian, former Indian Ambassador to Italy, shooting unarmed, innocent fishermen and killing them was not an “incident of navigation” but “a crime.” He argued that since “UNCLOS does not apply, and the incident occurred within India’s contiguous zone, the culprits tried to run away, and the victims were Indian nationals, it follows that India has jurisdiction over the matter” (Fabian 2016). Ambassador Fabian also noted that the apex court also “contributed significantly to the confusion in two ways. Italy argued incorrectly that as Kerala had not signed the UNCLOS, it had no locus standi in the matter. The Supreme Court accepted that argument and stopped the proceedings in the Kerala high court. The fact of the matter is that since India had signed the UNCLOS, Kerala was only acting on behalf of the Union of India. He said that “the court complicated the matter further by saying that although it was seized of the matter it was willing to consider Italy’s plea that India had no jurisdiction in the matter” (Ibid). There were other arguments from experts that India had a strong case against Italy on several grounds. However, the case went out of proportion with PCA intervention when Italy tried to ‘internationalise’ it for its own reasons. At last, there was a feeling of relief in India too that Italy could not run away with the whole case (Seethi 2021).

From Setback to Settlement

After the legal proceedings initiated early this year, the Supreme Court has been monitoring the progress of negotiations among the major stakeholders- India, Italy and the state of Kerala. Having recorded the information regarding the deposit of INR 10 crores compensation made by the Republic of Italy, the Division Bench of the Supreme Court on Friday reserved orders on the application field by the Central Government. Solicitor General of India informed the apex court that Italy had already deposited the compensation amount with the Union Government, and the Union has deposited the same amount before the Supreme Court registry as per the earlier direction of the Court. The SG said that the question of apportionment of the compensation amount is pending, as the Government of Kerala Government has indicated that the people who got injured in the incident also need to be compensated, and not just the two people who got killed. Senior Advocate appearing for Italy requested the court to pass an order to quash the criminal proceedings pending against the two Italian Marines, in terms of the award of the International Tribunal. The SG, however, informed the court that as per the award of the Tribunal, the jurisdiction for criminal prosecution would be with Italy and not with India (Ojha 2021). The Supreme Court’s final order is expected to clarify all these things on Tuesday.

In a conversation with this writer, Marshal Frank, former president of All Kerala Federation of Boat Owners who had also served as member, Kerala State Fisheries Advisory Board, told that the settlement being negotiated and pending before the apex court would come as a great relief to the victims of the 2012 incident. According to Frank, the involvement of different agencies, including the church, contributed to the payment of INR 1 crore even at the early stage (as ex gratia payment to the victims). Frank, however, told that the fishing community is now in a high-risk category as they have to move into high seas and shipping ways for better fish catch as the areas adjacent to the coastal region are bereft of fishes. The increasing incidents of boat accidents and collision with ships could be a reminder.

Meanwhile, even as the case proceeded under international arbitration, with both parties submitting arguments before PCA, there was a high amount of confusion regarding the role, responsibilities and jurisdiction of the coastal states in India. Already there were a number of issues of Indian fishermen from the states of Kerala, Tamil Nadu, Gujarat etc while they were on fishing in high seas. In fact, Marshal Frank had shared his concerns on this question, several years back, in a coastal security workshop organised by the KPS Menon Chair for Diplomatic Studies, Mahatma Gandhi University in collaboration with the Ministry of External Affairs, Government of India. He said that besides smuggling of arms, ammunitions, explosives, spirit, fake currencies etc as reported in the media, there were instances of “lot of non-fishing community members entering into this field with big trawlers and thrive in no time.” He said some even doubted “shady business behind the sudden growth of certain owners of these fishing vessels.” “This is increasingly marginalising the fishing community,” he pointed out (Frank 2010).

India has taken up such issues of the fishing community with neighbouring countries like Sri Lanka and Pakistan in the past. On many occasions, the question of violation of maritime boundary and the movement of fishermen in ‘high security’ zones led to arrests and detention in either country. It underlines the fact that the countries in South Asia are yet to have a framework for addressing such issues of humanitarian dimension. Though the Enrica Lexie case would be settled based on the PCA award and subsequent negotiations among different stakeholders, there are many lessons that Union Government and the coastal states in India must learn for an effective maritime governance. This is especially important when the marine traffic density is high in the Arabian Sea and the Indian Ocean.


References

European Union (2015): “European Parliament resolution of 15 January 2015 on the case of the two Italian ‘marò’,” https://www.europarl.europa.eu/doceo/document/TA-8-2015-0013_EN.html

Fabian, K.P. (2016): “The Italian Marines Case Represents a Travesty of Justice,” The Wire, 13 May, https://thewire.in/world/the-italian-marines-case-represents-a-travesty-of-justice

Frank, Marshal (2010): “Fishing Community and Coastal Security,” in K.R. Singh and K.M. Seethi (eds.), Coastal Security: Needed A New Look, Kottayam: KPS Menon Chair.

India, Ministry of External Affairs (2020): “Arbitral Tribunal award on the request of Italy in respect of a dispute concerning the incident of 15 February 2012…, 2 July,” https://mea.gov.in/press-releases.htm?dtl/32807/Arbitral_Tribunal_award_on_the_request_of_Italy_in_respect_of_a_dispute_concerning_the_incident_of_15_February_2012_involving_Italian_tanker_quotEnric

National Investigation Agency (2013): “Italian Marine Case: RC-04/2013/NIA/DLI,” https://www.nia.gov.in/case-detail.htm?44/Italian+Marine+Case

Permanent Court of Arbitration (2020): The Italian Republic- V. – The Republic of India- Concerning -The “Enrica Lexie” Incident, Award, 21 May, https://pcacases.com/web/sendAttach/16500

Ojha, Srishti (2021): “Enrica Lexie Case : Italy Deposits Rs 10 Crores Compensation; Supreme Court Reserves Orders On Quashing Criminal Proceedings Against Italian Marines,” LiveLaw, 11 June, https://www.livelaw.in/top-stories/supreme-court-enrica-lexie-case-italian-marines-compensation-kerala-175536

Seethi, K.M. (2021): “The Enrica Lexie case and the stakes of coastal states in India,” South Asia Analysis Group Paper No 6733, 15 January 2021; also in Sri Lanka Guardian, 15 January, http://www.slguardian.org/2021/01/the-enrica-lexie-case-and-stakes-of.html

UNCLOS (1982): United Nations Convention on the Law of the Sea, https://www.un.org/depts/los/convention_agreements/texts/unclos/unclos_e.pdf

An earlier version had appeared in South Asia Analysis Group Paper No 6733, 15 January 2021 and also in Sri Lanka Guardian, 15 January 2021.

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South Asia Analysis Group Paper No 6768 – 16 March 2021
(SAAG in arrangement with Eurasia Review and Sri Lanka Guardian)


“If you want to see the brave, look at those who can forgive. If you want to see the heroic, look at those who can love in return for hatred,” says Bhagavad Gita. Pakistan’s Hindu community has apparently followed this sacred verse while forgiving the accused in the demolition of a 100-year-old holy shrine in the Teri village of the Karak district of Khyber Pakhtunkhwa (KPK) on 30 December 2020.

But does this ensure that their basic right to live in Pakistan will be respected?

The case emerged in the wake of a mob, under instigation of local Muslim clerics, having resorted to attacks and vandalism on the temple, which was built way back in 1919, following the samadhi of Shri Paramhans Ji Maharaj. Shri Paramhans is worshipped by the Hindu community in Pakistan as a mystic and spiritual master.

Reports from Pakistan indicated that legal proceedings against the accused will be put to a halt following a meeting held between local Muslim religious leaders and the Hindu society at a jirga, which is the traditional justice system of the Pakhtuns. The Pakhtun habitants used to settle conflicts among themselves through jirgas according to their traditional set of rules called pakhtunwali. In this consensual justice dispensation system, the state does not have any role; nor does it control the process of conflict settlement. But, in this case, KPK Government played a major role—apparently under pressure of the country’s apex court and with the intervention of the Human Rights Commission of Pakistan.

After the deliberations held in the jirga, an agreement was arrived at—with an apology tendered by the accused for the demolition and burning of the holy shrine. An apology was also made for a similar attack on the temple in 1997. The Maulanas made an assurance to the Hindu community that their rights and privileges would be fully protected as per the law of the land. KPK Chief Minister presided over the meeting.

Dozens of people were arrested after the destruction of the temple with the intervention of the Human Rights Council of Pakistan and the Supreme Court. The deliberations of the jirga, including the consensus reached, will be intimated to the apex court of Pakistan. Pakistan Hindu Council leaders like Ramesh Kumar were positive on the issue. Kumar, however, reminded that the demolition had hurt the Hindu sentiments across the world.

The Supreme Court was very vehement in its criticism of the vandalism and the Chief Justice even went to the extent of saying that the demolition had brought “international embarrassment to Pakistan.” The court also ordered the Evacuee Property Trust Board (EPTB) to start the reconstruction of the shrine.

Hundreds of people, instigated by some Muslim clerics (which included a faction of Jamiat Ulema-e-Islam), were involved in the destruction of the temple. A similar vandalism was unleashed in 1997 when the holy shrine came under attack. The apex court had ordered its renovation in 2015.

Following the Supreme Court direction, a Commission on Minorities Rights, KPK Chief Secretary and Inspector General of Police visited the site and submitted a report which stated that more than a hundred people were taken into custody and several officials and police officers were suspended for dereliction of duty. The Chief Justice was, however, very particular that the authorities should also ensure recovering money from the perpetrators of vandalism.

Meanwhile, the Shoaib Suddle commission noted in its report that the vandalism had brought shame to Pakistan by tarnishing the image of the country at the international level. The commission also recommended security and protection of other temples in the country.

Pakistan witnessed several hardships faced by its religious and ethnic minorities over years, particularly under the long spell of military rule. Of the country’s biggest minority of 8 million Hindus (out of the 200 million population of Pakistan), nearly 93 per cent live in Sindh, and other provinces like KPK have only a small percentage of Hindus. There were reports of attacks on the holy places of minorities, including Hindus and Christians, in the past. This took a turn for the worse with the emergence of Taliban forces in Pakistan after the 1990s. Since then, the neo-Wahhabi militant forces used to unleash violence and the shrines of minorities (which included Shia and Ahmadiyya communities) became the targets of frequent attacks.

A few years back, the Pakistan Hindu Council leaders said that around 1,400 Hindu religious shrines in Pakistan required immediate attention as well as protection by the authorities. The Council had also mooted an idea of a federal agency to prevent atrocities against the minorities. The proposal came in the background of reports of forced conversion and cases registered under blasphemy laws.

The National Human Right Commission of Pakistan (NHRCP) and the US Commission on International Religious Freedom (USCIRF) testified that religious minorities had a troubled time in the country, and there were instances when they could not enjoy the freedom of religion or belief guaranteed under Pakistan’s Constitution. NHRCP reports of 2019 and 2020 and the USCIRF Report of 2020 are clear evidences of such incidents.

The reconciliation statement is expected to reach the apex court soon. However, it remains to be seen if the Supreme Court can annul proceedings against the accused on the strength of a statement of ‘reconciliation.’

Two years back, the apex court had held the system of jirgas and panchayats in violation of Pakistan’s international commitments under the Universal Declaration of Human Rights (UDHR), International Covenant on Civil and Political Rights (ICCPR) and Convention on the Elimination of all Forms of Discrimination against Women (CEDAW). The verdict by the court said that these commitments placed a responsibility on Pakistan to ensure that everyone had access to courts or tribunals and would be treated equally before the law. The verdict came on a petition filed by the National Commission on Status of Women (NCSW) as well as the government of the Khyber Pakhtunkhwa (KP).

The court held that the manner in which jirgas or panchayats functioned in Pakistan amounted to violating Articles 4, 8, 10-A, 25 and 175(3) of the Constitution and clarified that this practice did not fall under the constitution or any other law, because this system went to the extent of adjudicating on civil or criminal matters.

It remains to be seen if the apex court of Pakistan can sustain the deliberations of jirga in the case of the demolition and burning of the holy shrine and thereby stall criminal proceedings against the accused on the strength of the Hindu community’s forgiving. The court, which intervened in this case most actively from the beginning, also knows that minority protection in Pakistan is a daunting task against the rising tide of fundamentalism and sectarianism in the country. Evidently, many Islamic militant groups function beyond the path of such ‘reconciliation’ and ‘consensus’ politics. The pattern of violence against the ethnic and religious minorities is a case in point.

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The decision of the FATF was also a sequel to a number of developments in Pakistan in the past few months. It may be recalled that in early February 2021, the Supreme Court of Pakistan ordered the release of Ahmed Omar Saeed Sheikh, a British-born militant who was convicted for the kidnapping and murder of US journalist Daniel Pearl in 2002. The apex court turned down all charges against Omar Sheikh who has been in jail in Pakistan for the crime. Daniel Pearl was serving as South Asia bureau chief of The Wall Street Journal. He was captured in Karachi in January 2002 while investigating on Pakistani terror groups linked to Al Qaeda. The US and many other countries criticised this action of the apex court in Pakistan.

The South Asia Terrorism Portal estimated that Pakistan saw more than 300 terrorism-related incidents in 2020, and 169 associated deaths of civilians. In the first two months in 2021 alone, there were 48 incidents of killing which also involved 39 civilians. It was only recently that masked militants shot dead four women aid workers in North Waziristan district. The Human Rights Commission of Pakistan condemned the killing and urged the state to “book the perpetrators of this heinous crime.” It said: “The re-emergence of terror groups in the area is a matter of grave concern. It is the responsibility of the authorities to protect the lives and property of citizens at all costs.” The killing of several Hazara miners in early January this year also reminded of the continuing sectarian violence unleashed by terror groups. In July 2020, a UN report indicated that there were as many as 6,000 Pakistani militants in Afghanistan, and most of them had affiliation with the Tehreek-i-Taliban Pakistan (TTP), the deadliest terror group in Pakistan.

However, sensing the implications of ignoring the global terror watchdog’s repeated call for compliance, Pakistan took a few steps which sought to appease the FATF. It sentenced LeT chief Hafiz Saeed to 11 years in prison for “terrorism financing.” Lakhvi was also sentenced to five years for “terrorism financing.” While acknowledging these measures, many doubted if all these were a mere eye-wash to satisfy the global agencies. The United States even reminded that Pakistan should hold these terror leaders accountable for more than “terrorism financing.” There were also reservations about Islamabad’s soft approach towards Jaish-e-Mohammad, the terrorist outfit responsible for the Pulwama attack in February 2019.

Even as Pakistan ran into trouble for its history of terrorism and sectarian violence, the leaders of the country sought to externalise many such incidents with an obvious intent to escape from domestic and international criticism. For instance, after the gruesome killing of Hazara coal miners, Prime Minister Imran Khan sought to shift the responsibility on India saying that New Delhi was backing the militant Islamic State (IS) group to cause turmoil in Pakistan.  Prime Minister Imran Khan also ran into trouble after telling parliament that the US “martyred” Osama Bin Laden. He said: “I will never forget how we Pakistanis were embarrassed when the Americans came into Abbottabad and killed Osama Bin Laden, martyred him.” Opposition leaders criticised Khan for calling Bin Laden, an ‘ultimate terrorist,’ a ‘martyr’ and thereby appeasing violent extremism.

It was in this background that in August 2020, India’s Permanent Representative to the United Nations, Ambassador TS Tirumurti, called Pakistan “a nerve centre of terrorism.” In an interview, he lashed out at Islamabad for sheltering terror groups, saying it was home to the largest number of listed terrorists internationally and designated terrorist entities. He referred to the activities and operations of Jamat-ud Dawah, Lashkar-e-Taiba, Jaish-e-Mohammed and Hizbul Mujahideen. Ambassador TS Tirumurti pointed that the United Nations’ 26th Report of the Analytical Support and Sanctions Monitoring Team concerning ISIS had indicated that there was clear admission that the leadership and funding for the terrorist entities like Al-Qaeda and ISIS had their origin from Pakistan.

Now that the FATF has given another lease of life (for three months) for establishing Pakistan’s credentials, the political leadership in Islamabad is engrossed in meeting the deadline. The National Executive Committee (NEC) on Anti-Money Laundering is reported to have taken decisions to act in close coordination to ensure appropriate measures to be put in place in the coming months.

The leaders are well aware of the fact that Pakistan, which is already facing severe resource crunch, will have to make compromises at different levels. Even international credit and financial agencies will keep away from investment and other transactions if FATF standards are not met. If the study report of an Islamabad-based think-tank is to be believed, the country already suffered a huge loss of $38 billion in the wake of FATF’s listing of Pakistan under JUIM. It also caused decline in exports and inward FDI. Pakistan is currently grappling with its huge public debt which has already crossed Rs. 36.5 trillion. It remains to be seen if the Imran Government can tackle this economic instability with a firm hand. However, FATF’s ‘grey’ listing will certainly put Pakistan in a tight-rope walking—’terror financing’ or ‘financing’ the country’s most pressing needs.

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