The US will suspend financial assistance to Pakistan if there is any "credible evidence" of misuse of funds provided to it under the Kerry-Lugar Bill that asks Islamabad cease support to terrorist groups on its soil and dismantle camps that threaten its neighbours.
This has been communicated by the State Department to the US Congress in the first report on US' financial assistance to the Pakistan under the Kerry-Lugar Bill.
Signed into law by the President Barack Obama, Pakistan would get $ 7.5 billion civilian assistance in the next five years from the United States under the legislation.
"The Secretary will suspend any government to government assistance to any implementing agency if there is credible evidence of misuse of funds by such agency," the report, a copy of which has been obtained by this agency, said.
"To provide maximum accountability and oversight, a bilateral agreement between the US and Pakistan must be in place detailing the conditions for disbursement of funds and detailed monitoring and reporting requirements before any government to government assistance is provided," it said.
The financial assistance would be distributed through both the governmental and non-governmental sectors.
The bill also asks Pakistan to cease support to terrorist groups on its soil, dismantle terrorist camps in Quetta, Muridke and other areas that threaten its neighbours.
The Bill also asks Pakistan to provide information or direct access to the proliferation network operating in Pakistan without mentioning disgraced nuclear scientist AQ Khan by name.
Giving details of the distribution of $ 7.5 billion to Pakistan in the next five years, the report says $ 3.5 bn will go through the "high impact, high visibility infrastructure programs" particularly in the energy and the agriculture sectors.
Focused humanitarian and social services would receive $ 2 billion, which includes $ 500 million to the immediate post crisis and humanitarian assistance and the rest $ 1.5 billion towards increased access to and quality of education and health services.
The final $ 2 billion would be spent on "government capacity development" which includes $ 1 billion each for "improved national and local governance" and "improved security and legal institutions", the report says.
"Aside from specific capacity building programs, we expect Pakistani officials to learn in depth about budget and program management best practices from technical and oversight professionals who will be on hand to help ensure that projects implemented through Pakistani institutions meet the required standards," it said.