According to Castellum.AI, a RegTECH startup that automates watchlist compliance, Pakistan removed about 1,800 names from its terrorist watchlist since March 9th without any public explanation, including Zaka ur-Rehman, an alias of the Lashkar E Taiba leader and alleged mastermind of the Mumbai attacks.

At its height in October 2018, Pakistan’s terrorist watchlist, the Proscribed Persons List, had about 7,600 names, according to a report from the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog. Castellum.AI regularly adds new data sources, and on March 9th Castellum.AI added the Pakistan Proscribed Persons List to its database. Between March 9th and March 27th, Castellum.AI data showed that Pakistan removed 1,069 names from the Proscribed Persons List, and that all those names then appeared on the country’s Denotified List, a term used in Pakistan to signify an official removal. Since March 27th, about 800 more names were removed from the terrorist watchlist and placed on the Denotified List. Since its peak, about 3,800 names were removed from the Proscribed Persons List, without explanation or notification to the public.

Pakistan’s Listing and Delisting Process

Pakistan’s Countering the Financing of Terrorism (CFT) lead, the National Counter Terrorism Authority (NACTA), broadly describes the listing process and restrictions on proscribed persons on its website, including that over 200 million in Pakistani rupee were frozen, but there is no explanation regarding why about 3,800 names were removed since October 2018.

Castellum.AI provided data showing the name removals to the Wall Street Journal on April 1. The Wall Street Journal then contacted the Pakistani government for comment. On April 15th, an article was published in a Pakistani newspaper, saying that names were removed because “the list has been bloated up to 7,000 names with multiple inaccuracies such as the names of dead individuals, Afghan nationals, untraceable names without proper identifiers.” It is not clear from this article if any funds were frozen as a mistake and are now being returned, and why Pakistan publicly maintains the Denotified List if the individuals on it are dead or their listings have multiple inaccuracies.

Pakistan’s Reforms and the FATF

Pakistan is working to implement an action plan that has been mutually agreed to with the FATF, part of which involves “demonstrating effective implementation of targeted financial sanctions." It is possible that these removals are part of Pakistan’s action plan to implement FATF recommendations. While Pakistan received a rating of “low” effectiveness from the FATF regarding terrorist financing preventive measures and financial sanctions, the FATF did note in February that Pakistan has largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the action plan. The FATF will again evaluate Pakistan’s progress in June 2020.

Removed Names Include Aliases of Internationally Sanctioned Terrorists

It is not possible to fully verify that the delistings are a match for internationally-sanctioned individuals because the Proscribed Persons List does not have date of birth or place of birth. Still, these are the names of terrorists that are internationally listed and are citizens of Pakistan or Afghanistan, making it possible that these are the removed persons.

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To ensure that we looked at only the most likely cases where internationally listed terrorists were removed, Castellum.AI took the following steps:

• Downloading the official Denotified List.

• Screening these names against our watchlist database.

• Removing all matches that did not match all name parts.

• Removing all matches where the listed persons were not citizens of Afghanistan or Pakistan (the Proscribed Persons list seems to only have these two groups).

• Ensuring that exculpatory information does not exist, for example, IDs that do not match, or news reports that the individual is deceased.

• Ensuring that the name, if not exact, matches an official alias. This is the case with Zaka Ur Rehman, who is more commonly known as Zaki Ur Rehman Lakhvi, but who has an official alias noted by the U.S., UN, EU and others of Zaki Ur Rehman.

In the case of Zaka Ur Rehman, the difference between Zaka and Zaki fits within the parameters of an accurate phonetic translation. Castellum.AI also searched for the Lashkar E Taiba leader’s full name, Zaki Ur Rehman Lakhvi, on the Pakistan Proscribed Persons list, and he was not on the list. This means that if the removed name is a false positive, that Pakistan has not added the Lashkar E Taiba leader to its terrorism watchlist.

How Pakistan Can Improve Its Listing Process

It is possible that these delistings are part of Pakistan’s efforts to implement FATF’s action plan, but not announcing removals or the reasons for them poses many challenges. FATF standards call for transparency in listing procedures. Transparency supports due process for affected individuals and facilitates compliance. Obligated entities within Pakistan, as well as financial institutions who process Pakistan-related transactions globally, need clarity to effectively comply with AML/CFT laws and regulations. To ensure compliance with its list, Pakistan should:

• Clarify if individuals moved from the Proscribed to Denotified list are still a threat.

• State the reason for a list change.

• Identify the reason an individual was listed in the first place.

• Indicate the organization the individual is connected to, if any.

• Describe the process for listing, delisting and resolving cases of mistaken identity.

• Provide additional identifying information. While many on the Proscribed persons list have IDs, (Pakistan’s Computerized National Identity Card - CNIC), the list does not have dates of birth or places of birth, making it difficult to confirm identities.

Comparing the NACTA List To Others

Still, the Proscribed Persons List is better than many worldwide. It is machine readable, it is available in multiple formats, it separates first names and last names, IDs and addresses, specifies the ID type, and clarifies that all names on this list are individuals, not a mix of individuals and entities. Comparing this list to others globally, it does better in some categories and less so in others:

• The Australian DFAT List does not standardize information upon entry, making it difficult to search effectively without Castellum.AI or similar software. For example, United Kingdom citizens have their citizenship listed as “British,” “United Kingdom of Great Britain” and “United Kingdom of Great Britain and Northern Ireland.”

• The U.S. Department of Commerce’s BIS Denied Persons List displays individuals and entities without distinguishing the two, does not separate IDs and addresses and does not have a consistent format.

• The U.S. State Department’s Cuba Restricted List is simply business names posted on a website, without addresses or IDs, and not in a machine readable format.

• The U.S. Treasury rarely provides the rationale for why persons are delisted from OFAC’s SDN List, however, it does publicly announce them.

• The World Bank Listing of Ineligible Firms and Individuals provides IDs for listed individuals and entities, but does not tell users what the ID is. Although the World Bank calls all these IDs “Reg. No.” Castellum.AI research shows that they include Tax IDs, VAT IDs, Business Identification numbers and more.

Castellum.AI is a RegTECH startup that tracks watchlists globally, enhances watchlist data and automates watchlist compliance. We help individuals and businesses globally better understand and make use of watchlist data.