Pak moves to block flow of funds to Hafiz Saeed front outfits

Pakistan has prohibited collection of donations by 26/11 Mumbai attacks mastermind Hafiz Saeed-led Jamaat-ud-Dawa (JuD), Lashkar-e-Taiba (LeT), Falah-e-Insaniyat Foundation (FIF) as well as several such organisations named in a list of banned outfits by the UN Security Council.

The decision was taken by Securities and Exchange Commission of Pakistan (SECP), the financial regulatory agency under the finance ministry, on 19 December, reports today said. It warned that non-compliance with the ruling could result in a heavy penalty.

"SECP prohibits all companies from donating cash to entities / individuals listed under the UNSC sanctions committee's consolidated list," reads the notification. In addition to JuD, LeT and FIF, other organisations barred from collecting donations include the Paasban-i-Ahle-Hadith and Pasban-i-Kashmir. Several other lesser known outfits too have been named in the notification.

"Non-compliance with SECP ruling could result in a hefty monetary fine. The government has already prescribed a penalty of up to Rs10 million for non-compliance on the sanctions regime being implemented," it said.

Reports said Pakistan's civilian government plans to seize control of charities and financial assets linked to Saeed. Reuters quoted an official saying, "Pakistan's civilian government detailed its plans in a secret order to various provincial and federal government departments on 19 December."

The implementation of the plan would mark the first time Pakistan has made a major move against Saeed's network, which includes 300 seminaries and schools, hospitals, a publishing house and ambulance services. According to counter-terrorism officials, the JuD and FIF alone have about 50,000 volunteers and hundreds of other paid workers.

The official was present during one of several high-level meetings called to discuss the crackdown on outfits controlled by Saeed, Reuters said.

Citing sources, it said a 19 December document marked secret from the finance ministry directed law enforcement and governments in Pakistan's five provinces to submit an action plan by December 28 for a "takeover" of JuD and FIF.

But according to the International Business Times, it is questionable if this action by Pakistan will dry up funds for Saeed. Indian officials tracking the Lashkar-e-Taiba say that Saeed has faced such situations in the past, but beat the system by coming up with new organisations. For instance, when the JuD was banned he came up with the Falah-e-Insaniyat (FeI). He could do something similar now.

According to IBT, while Saeed would rely on funds from Saudi Arabia, there are three key persons who manage the show. The three men - Muhammad Ijaz Safarash, Alexander McLintock and Abdul Aziz Nuristani - would arrange for the funds and then send it to Saeed's organisations through various channels, the main one being hawala. Unless action is taken against them, the funds flow is unlikely to stop.

The US has declared JuD and FIF as terrorist fronts for LeT, the militant organisation that Washington and New Delhi blame for the 2008 attacks in Mumbai in which 166 people were killed.

The Financial Action Task Force (FATF), an international body that combats money laundering and terror financing, too has warned Pakistan that it faces inclusion on a watch list for failing to crack down on financing terrorism.

The document also directs that the name of JuD's 200-acre headquarters, Markaz-e-Taiba, near the eastern city of Lahore, be changed "to make it known that the Government of Punjab solely manages and operates the markaz (headquarters)''.

"I have ordered authorities to choke the fundraising of all proscribed outfits in Pakistan," home minister Ahsan Iqbal said when asked about a crackdown on JuD and FIF.

There is also the possibility that the government's failure to act against the charities could lead to UN sanctions. A Security Council team is due to visit Pakistan in late January to review progress against UN-designated "terrorist" groups.

"Any adverse comments or action suggested by the team can have far-reaching implications for Pakistan," said an official who had attended the 19 December meeting.