FATF: Pakistan to remain on “Grey List”

Published: October 24, 2020

On October 24, 2020, the Financial Action Task Force voted for Pakistan to remain under “grey list” of the organisation. The decision was taken as Pakistan failed to comply with all the 27 parameters set by the FATF. It has completed only 21.
Earlier, the asia-pacific group of FATF submitted a report titled “Follow up report on mutual evaluation of Pakistan”. The report is first of its kind. The decision of putting Pakistan under grey list was taken based on this report.

Highlights

The report said that the progress of Pakistan on recommendations on the effectiveness of combating Financing terror system and anti-money laundering made by the Financial Action Task Force largely remained unchanged as compared to that of 2019.

In 2019, the Asia Pacific group of the organisation had downgraded Pakistan status from “regular follow-up” to “enhanced follow up”. Enhanced follow up means the country has to provide monthly reports of its compliance to the Financial Action Task Force. It is an intensive process of correction of deficiencies of the member.

Pakistan actions

after being degraded under the FATF list in 2019, Pakistan passed three crucial legislation. They were

  • Anti-terrorism act (Amendment) Bill 2020
  • Anti-money laundering (Amendment) Bill
  • Islamabad capital territory Waqf properties bill

Impact on being under grey list

When a country is put under grey list it becomes difficult to obtain financial aid from International organisations such as Asian Development Bank, International Monetary Fund, and World Bank.

Blacklist

  • Currently Pakistan is unlikely to be put under black list of the Financial Action Task Force. This is mainly because of the support provided by China Turkey and Malaysia to Pakistan in the organisation.
  • Currently North Korea and Iran are under the black list of FATF.
  • Pakistan was put under grey list as it failed to check the flow of money to the terror groups such as Jaish-e- Mohammed and Lashkar-e-Taiba.
  • A 27-point action plan was provided to Pakistan to help the country fight against terrorism. However, Pakistan missed 13 targets according to the Asia Pacific group report.

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