Financial Action Task Force (FATF) -Pakistan still in grey list

Financial Action Task Force (FATF) -Pakistan is still in the grey list

Introduction

To Islamabad’s deep disappointment, the Paris-based 39-member Financial Action Task Force (FATF) has decided once again to keep Pakistan on its “grey list” of countries under “increased monitoring”, giving it another three months to complete its commitments.

27-point action list

After being removed from that list in 2015, Pakistan was put back on it in June 2018 and handed a 27-point action list to fulfil.
On Thursday, FATF President Marcus Player announced that although Pakistan has made “significant progress”, it had three remaining points of the 27 that were only partially addressed, notably all in the area of curbing terror financing.

Pakistan’s remaining tasks in the 27-point action list

The body listed the remaining tasks:
- Terror-funding prosecution: Demonstrating terror-funding prosecution is accurate, effective and dissuasive,
- Financial sanctions: Thoroughly implementing financial sanctions against all terrorists designated by the UN Security Council, which include LeT founder Hafiz Saeed, JeM chief Masood Azhar, other leaders of terror groups in Pakistan, and those belonging to al Qaeda.

Pakistan’s response

- Pakistan’s former Interior Minister Rehman Malik has protested the decision most vociferously, even suggesting that the FATF should be taken to The Hague, given that other countries that have completed nearly all the points on their task lists have been dropped from the grey list.

Impact of ‘grey-list’ on Pakistan

Economic loss: Pakistan has lost $38 billion because of its time on the grey list (2008-2015 and 2018-the present).
India-Pakistan ceasefire: First signs of a thaw between India and Pakistan since 2016. The decision of the Directors General of Military Operations, also on Thursday, to strictly observe the ceasefire agreement at the LoC.
Improving India-Pakistan relations: Both the countries are committed to resolving “core issues” that lead to violence between the two sides, indicating more dialogue between India and Pakistan could be on the cards.
- There are no political, trade, cultural ties at present.
Actions taken by Pakistan: Pakistan’s next steps on the FATF directive to successfully prosecute terrorists and terror financers identified by the grouping are in its own interests.

Way ahead

Mr. Pleyer (FATF Head) advised Pakistan to complete the remaining tasks by June 2021, when the FATF will meet again to vote on the issue.
Any proposed New Delhi-Islamabad engagement in the next few months would get a much-needed boost if Pakistan traverses this ‘last mile’ on the FATF grey list, addressing India’s main grievance on cross-border terror that emanates from its soil.

Source: TH

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