Latest news with #ComplexProliferationFinancingandSanctionsEvasionSchemes
Hindustan Times
5 hours ago
- Business
- Hindustan Times
FATF flags Pak case to sound global weapons funding alarm
A new report by the global financial crimes watchdog has cited India's seizure of equipment with military use bound for Pakistan in 2020 as evidence of widespread failures in preventing weapons proliferation financing, a problem that poses significant threats to world security and the integrity of the international financial system. FATF flags Pak case to sound global weapons funding alarm The Financial Action Task Force (FATF) report, published late on Friday, found that 84% of assessed countries demonstrated inadequate controls despite what FATF described as the 'grave threat' posed by such activities. The report featured a case study detailing how Indian customs authorities in 2020 intercepted dual-use items that were mis-declared as medical equipment but were actually destined for Pakistan's ballistic missile programme. 'Indian custom authorities seized an Asian-flagged ship bound for Pakistan. During an investigation, Indian authorities confirmed that documents mis-declared the shipment's dual-use items,' the FATF report titled Complex Proliferation Financing and Sanctions Evasion Schemes stated. The items were listed as autoclaves, which are 'used for sensitive high energy materials and for insulation and chemical coating of missile motors.' A senior Indian government official described the study as 'the most comprehensive and updated survey of risks related to proliferation financing,' noting that it identifies Pakistan alongside North Korea and Iran as countries where proliferation financing risks 'are inherent.' The FATF categorised the incident as 'non-declaration of dual use goods under the prescribed export laws of the exporting country.' Though the report did not name the exporting country, the ship was intercepted in Indian waters while travelling from China's Jiangyin port to Pakistan's Karachi port, as reported by Indian media, including HT, at the time. What was not reported till now, and referenced in the FATF report, is the link of the shipment to Pakistan's National Development Complex, a defence and aerospace agency under the Pakistan government. 'The Bill of Lading of the seized cargo provided evidence of the link between the importer and the National Development Complex, which is involved in the development of long-range ballistic missiles,' the report stated. Officials said the timing strengthens India's position as it prepares to oppose the World Bank's $20 billion lending commitment to Pakistan over 10 years. India will oppose development funding to Pakistan at the World Bank's upcoming meetings, one of these people said, asking not to be named. 'India is not against multilateral agencies such as the IMF and World Bank extending financial support for the development of the people of Pakistan. However, there is ample evidence that these development funds are diverted by Islamabad from development projects to arm purchase and terror funding,' said one of these officials, asking not to be named. In May, finance minister Nirmala Sitharaman contacted IMF leadership directly, presenting evidence of Pakistan's alleged misuse of development funds for military purchases. Despite India's intervention, the IMF executive board approved a $1.4 billion loan for Pakistan under climate resilience funding, though it later imposed 11 strict conditions following New Delhi's objections. 'Pakistan is unlikely to meet those conditions and thus it would not be able to avail the IMF funding,' the official added. Citing data available with multilateral agencies, this official explained: 'Pakistan spends on average around 18% of its general budget on 'defence affairs and services', while even the conflict-affected countries spend on average far less (10-14% of their general budget expenditure). Further, Pakistan's arms imports increased dramatically from 1980 to 2023 by over 20% on average in the years when it received IMF disbursements in comparison to years when it did not receive the same'. A second official said the latest report very nearly 'clubs Pakistan with rogue countries like North Korea.' 'This report will help India in pushing it for placing Pakistan in the grey list again.' The report also comes days after FATF condemned the April 22 Pahalgam terror attack, saying it could not have occurred without means to move funds between terrorist supporters, which Indian officials described as a positive step in New Delhi's renewed attempts to put Pakistan back on the grey list. The FATF report highlighted significant vulnerabilities across the global financial system in countering the financing of weapons of mass destruction. It revealed that only 16% of countries worldwide have demonstrated effective implementation of UN sanctions designed to prevent weapons of mass destruction financing. The report cited North Korea as 'the most significant actor' in proliferation financing — having 'generated billions of dollars through cyberattacks targeting virtual asset-related companies, such as the theft of USD 1.5 billion from ByBit in February 2025,' according to the FBI. The report identified four primary methods used to evade sanctions: employing intermediaries, concealing beneficial ownership, exploiting virtual assets and manipulating shipping sectors. In the 2020 incident, the merchant vessel Da Cui Yun, sailing under Hong Kong flag, was stopped by India's customs department at Kandla port in Gujarat on February 3 for wrongly declaring an autoclave as an 'industrial dryer.' An autoclave -- a device that uses high-pressure steam and heat to sterilise materials -- is used in hospitals for sterilising medical equipment, but also helps in the manufacture of specialised materials for missile components under controlled high-pressure and temperature conditions. The interception was following an intelligence tip-off, and experts from the Defence Research and Development Organisation, including nuclear scientists, examined the 18x4-metre autoclave and determined it was dual-use equipment that could serve civilian or military purposes. The vessel was allowed to leave after the autoclave was seized. Reports suggested the Da Cui Yun had made multiple voyages from China to Karachi via Indian ports carrying machinery. The report underscores that 'unless both the public and private sectors urgently bolster technical compliance and effectiveness, those seeking to finance WMD proliferation will continue to exploit weaknesses in existing controls.'
Time of India
9 hours ago
- Business
- Time of India
FATF flags Pakistan bid to ship in missile gear from China on sly
(AI image created using ChatGPT) NEW DELHI: A new report by Financial Action Task Force has flagged Pakistan's attempts to procure equipment for its missile programme by mislabeling shipment, drawing attention to the country's failure in implementing measures to combat financing of proliferation of weapons of mass destruction, which is one of the recommendations of the global watchdog. The report not only reveals that critical components for ballistic missiles originating from China were mislabeled in documents but also links the importer to Pakistan's National Development Complex which handles missile production. India is likely to use the revelations in its dossier to make another push for Pakistan's return to the FATF 'grey list' which identifies countries with weaknesses in their anti-money laundering and terror financing systems. These countries are subjected to closer monitoring and must demonstrate progress on corrective action plans. Pakistan has been on the list three times with the most recent sanction of 2018 lifted in 2022. In Feb 2020, a Chinese vessel named 'Da Cui Yun', which was en route to Port Qasim in Karachi, was intercepted at Gujarat's Kandla port. While the equipment was seized, the ship and its crew were allowed to leave after investigation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5 Books Warren Buffett Wants You to Read In 2025 Blinkist: Warren Buffett's Reading List Undo In its latest report titled 'Complex Proliferation Financing and Sanctions Evasion Schemes', FATF refers to the investigation by Indian Customs. "Indian authorities confirmed that documents mis-declared the shipment's dual-use items. Indian investigators certified the items for shipment to be 'autoclaves', which are used for sensitive high energy materials and for insulation and chemical coating of missile motors," it read. "The sensitive items are included in dual-use export control lists of the Missile Technology Control Regime, India, and other jurisdictions. The Bill of Loading of the seized cargo provided evidence of the link between the importer and National Development Complex," it added. FATF may release the report next month amid hopes in India that it would expose Pakistan's inadequacies in combating terror financing - something which could potentially result in the country being placed under enhanced monitoring, and being returned to 'grey list'. This move would subject Pakistan to increased financial scrutiny, impacting foreign investment and capital inflows. India has been pushing for Pakistan's return to the list, citing its brazen support for terrorism and failure to comply with FATF norms.
