Pakistan is currently on the Financial Action Task Force’s (FATF) grey list, while some analysts say the prospects for the country’s exit from the grey list this year are bright.
In today’s meeting, the plenary meeting of FATF will decide whether Pakistan will remain on the grey list or not. Before we talk about the FATF list, let’s see what the FATF is.
What is the FATF?
The FATF is an inter-governmental body that sets international standards seeking to prevent international financial crimes that aid terrorism. It is a policymaking body that works to generate political will in national jurisdictions for legislative and regulatory reforms in these areas.
The FATF was established in July 1989 by a G-7 Summit in Paris, initially to examine and develop measures to combat money laundering. After the 9/11 attacks, the FATF in October 2001 expanded its mandate to incorporate efforts to combat terrorist financing, and in April 2012, it added efforts to counter the financing of proliferation of weapons of mass destruction.
The FATF currently comprises 37 member jurisdictions and two regional organisations (European Commission and Gulf Cooperation Council), representing most major financial centres in all parts of the globe.Â
Why is Pakistan on the grey list?
Pakistan was included in the grey list on charges of terrorism, money laundering, and terrorist financing. After the inclusion of Pakistan in the grey list in June 2018, Pakistan was given an action plan to get out of the grey list. However, experts could not be completely satisfied with the steps and explanations of the Pakistani government. As a result, Pakistan is still on the grey list.
In essence, in the assessment of the FATF, all these countries have failed to prevent international money laundering and terrorist financing, and are, therefore, on a global watchlist. To be pulled out of the grey list, a country has to fulfill the tasks recommended by the FATF, for instance, confiscating the properties of individuals associated with terrorist groups. If the FATF is satisfied with the progress, it removes the country from the list.
In the case of Pakistan, it first entered the list in 2008, left it, and then was on it from 2012 to 2015. Since 2018, it has not left the list.
How important it is for Pakistan to get out of the grey list
The Financial Action Task Force lists those countries on the grey list and blacklist that fails to take appropriate action to curb money laundering and terrorist financing. Investment in Pakistan has been severely curtailed since the FATF placed Pakistan on the grey list. Due to this, the country has lost billions of rupees.
This is because when a country is on the FATF’s grey list, investors are reluctant to transact and invest with that country. However, if Pakistan manages to get out of the grey list, then both the country’s economic direction and its global reputation will be better.
Why Pakistan’s chances of getting out of the grey list are bright?
For the first time this year, it is hoped that Pakistan will be removed from the grey list as Pakistan has met almost all the objectives of the Financial Action Task Force. Â
According to experts, the government of Pakistan has shown seriousness in its diplomacy with European countries regarding the Financial Action Task Force.
Pakistan’s Federal Minister for Commerce Syed Naveed Qamar visited the most important countries in Europe last month and sought to persuade Europe to support Pakistan’s position on the country’s status in the Financial Action Task Force. He expressed the commitment of the government to maintain better economic relations with Europe.
Official sources in Islamabad are expecting good news from the ongoing FATF meeting in Berlin, mainly due to Pakistan’s diplomatic efforts around the world over the past few months. An official of the Financial Monitoring Unit (FMU), an organization that monitors money laundering and related matters in Pakistan, said that Islamabad has almost met the 40 targets set by the FATF.
Which country will oppose Pakistan?
Experts say that in the meeting of the Financial Action Task Force, Pakistan’s rival India will oppose Pakistan in any case, but it would be premature to say what justification it will offer in this regard.
Experts point out that there is no possibility of opposition to Pakistan from any country other than India.
