FATF’s final deadline

There should be no rejoicing over the recent meeting of the Financial Action Task Force (FATF) in Paris during which Pakistan escaped a blacklist on anti-money and counter-terrorism financing standards. Rather it was a sigh of relief that Pakistan was retained on a grey list and left off after being issued a warning.

The FATF is concerned over Pakistan’s inability to fulfill the demands of the 27-point action plan. The FATF president has stated that Pakistan needs to do more and faster. The world is taking Pakistan’s inability to meet the global standards seriously and there is no room for mistakes. We must adhere to the complete action plan or risk being blacklisted, thus triggering sanctions and be considered as a safe haven for terror financing.

The FATF reviewed measures taken and progress made by Pakistan. The global body issued a warning that Pakistan has another four months until February 2020 to make significant progress. The likely action includes issuing directives to member nations for reconsidering business relations and transactions with Pakistan, bank sanctions, and inflow of private capital.

This is not good news for Pakistan and contradicts the official stance of several government officials and ministers stating that FATF has expressed ‘satisfaction’ over Pakistan’s progress. Finance adviser Hafeez Shaikh recently claimed that Pakistan has fulfilled 21 out of 27 actions items, but FATF noted that only five were addressed with varying level of progress on the rest of the action plan.

The government’s spokesman Firdous Awan spurned the news into a political victory stating that Indian’s efforts to add Pakistan to the blacklist have been thwarted. Economic Affairs minister Hammad Azhar, who led the country’s delegation to the FATF meeting, has expressed confidence that Pakistan will be removed from the grey list but admitted that more work needs to be done for the challenge faced is the most ambitious one yet.

Pakistan was placed on the grey list in June 2018 and was given fifteen months to implement an intense monitoring process but missed the third deadline. Pakistan has remained on the grey list before as well from 2012-15. Iran and North Korea are the only two other countries on the blacklist. Failure to meet the final deadline next February will place Pakistan on the blacklist having serious consequences on its economy.

It is also unclear why the government refused to share the action plan or the progress made with the public. What is clear is that Pakistan has been given a final chance to escape being blacklisted and this opportunity should be seriously taken by fully complying with the global standards.