By Idrees Ali and Phil Stewart
WASHINGTON (Reuters) - The Pentagon will withhold the remaining $50 million in military reimbursements to Pakistan for fiscal year 2016 after U.S. Defense Secretary Jim Mattis told Congress that Islamabad had not taken sufficient action against the Haqqani network, a U.S. official said on Friday.
"The funds could not be released to the Government of Pakistan at this time because the secretary could not certify that Pakistan has taken sufficient action against the Haqqani Network per the requirement in the FY 2016 National Defense Authorization Act," Adam Stump, a Pentagon spokesman, told Reuters.
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This is not the first time the Pentagon has decided not to make military reimbursements. Last year, it withheld $300 million.
The decision comes as President Donald Trump's administration is exploring potentially hardening its approach toward Pakistan to crack down on militants launching strikes in neighboring Afghanistan.
Possible Trump administration responses being discussed include expanding U.S. drone strikes and perhaps eventually downgrading Pakistan's status as a major non-NATO ally.
"This decision does not prejudge the conclusions of the White House review of South Asia strategy, which is still ongoing," Stump said.
Pakistan has been reimbursed $550 million of the $900 million the country was authorized to receive in fiscal year 2016.
Of the rest, $300 million had already been reprogrammed for other purposes, but had not been previously reported. Mattis' latest decision affects the remaining $50 million.
Relations between the two countries have been frayed over the past decade, with U.S. officials frustrated by what they term Islamabad's unwillingness to act against Islamist groups such as the Afghan Taliban and the Haqqani network.
The United States in 2012 designated the Pakistan-based Haqqani network as a terrorist organization. The year before, U.S. Navy Admiral Mike Mullen, then the top U.S. military officer, caused a stir when he told Congress that the Haqqani network was a "veritable arm" of Pakistan's spy agency, the Inter-Services Intelligence directorate.
Pakistan argues that it has done a great deal to help the United States in tracking down terrorists and points out that it has suffered hundreds of deaths in Islamist militant attacks in response to its crackdowns.
The Pakistan embassy in Washington did not immediately respond to a request for comment.
Stump, from the Pentagon, said the decision did not "reduce the significance of the sacrifices that the Pakistani military has undertaken over previous years."
He added that Pakistan still had time to take action against the Haqqani network in order to receive reimbursements next year.
The amount is under the Coalition Support Fund (CSF), a U.S. Defense Department program to reimburse allies that have incurred costs in supporting counter-terrorist and counter-insurgency operations. Pakistan is the largest recipient of U.S. military reimbursements.
(Reporting by Idrees Ali and Phil Stewart; Editing by Jeffrey Benkoe and Andrea Ricci)