In the backdrop of increased efforts to alienate Pakistan at the Financial Action Task Force (FATF) in February next year, New Delhi is focusing on strengthening its case against Islamabad for its failure in taking action against terror-financing and the Fake Indian Currency (FICN) menace.
The continuing worry of the Indian security agencies is the inability so far to dismantle the sophisticated currency production machines, which produce ‘high quality’ FICN, close imitations of genuine Indian Currency Notes (ICN). Besides being smuggled into India, it has also created self-financing criminal networks in Middle-East, South-East and South Asian regions and China, said an official. "Pakistan’s primary objective in infusing FICN is to finance terror, use the network for espionage purposes and to attempt economic de-stabilisation," said the official.
New Delhi is taking steps to gather strong evidence against Pakistan, foremost being to strengthen the FCORD (FICN Coordination Cell) set up within the Intelligence Bureau in 2010 to have effective coordination with state agencies for higher seizures. The latest data of the National Crime Records Bureau has shown a spike in seizure of fake currency. Rs 28.1 crore worth FICN was seized in 2017 against Rs 15.9 crore in 2016.
Efforts are afoot to substantially improve forensic processes, including physical, chemical and morphological parameters, to identify the source of raw materials and the place of manufacture of FICN. Sources in the agency said that increased interaction with foreign forensic experts has enabled them to chemically construct the paper and inks used in FICN and new measures like Visual Imitation Quotient (VIQ), has been developed to assess the percentage of visual imitation of FICN. Moreover, the FCORD and the ministries of home and finance had piloted the inclusion of counterfeit currency as a typology at the G-7 inspired FATF that set the stage to identify Pakistan as a non-compliant nation.
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Sources in intelligence agencies said that Pakistan has been under FATF observation for eleven years, the only nation after South Korea. But Pakistan's flagrant violations of FATF standards has gone on for too long. It was in the year 2008-2010, that Pakistan was put on the black list by the international terror financing watchdog; followed by the grey list between 2010-15. It was then placed under the observation of International Cooperation Review Group (ICRG) between 2015-18 to review the risks posed to international financial system, and since then Pakistan has been on the grey list.
Senior government officials said that just grey listing and warning Pakistan at the FATF may not impact its well-oiled machinery of terror financing and fake currency. In addition, the FATF may have to take counter measures, like ending correspondent banking that will have an economic impact and force Pakistan to act. The procedure provides that when the Action Plan expires, a warning is issued that happened this month and now a decision will be taken at the next plenary.