FATF all set to select Pakistan's grey list status

The Financial Action Task Force is ready to decide on Pakistan's grey list status in a virtual meeting scheduled later this month, according to a media report on Monday.

The Paris-based global money laundering and terrorist financing watchdog had located Pakistan on the grey list in June 2018 and asked Islamabad to implement an idea of action to curb money laundering and terror financing by the end of 2019 however the deadline was extended later on because of COVID-19 pandemic.

 

Seeking to wriggle from the FATF's grey list, debt-ridden Pakistan in August imposed financial sanctions on 88 banned terror groups and their leaders, including 26/11 Mumbai attack mastermind and Jamaat-ud-Dawa (JuD) chief Hafiz Saeed, Jaish-e-Mohammed (JeM) chief Masood Azhar and underworld don Dawood Ibrahim.

The virtual FATF plenary scheduled for October 21-23 will decide if Pakistan ought to be excluded from its grey list, predicated on an assessment of Islamabad's performance to meet up global commitments and standards on fight money laundering and terror financing (ML&TF), the Dawn News reported.

The meeting was earlier scheduled in June but Islamabad got an urgent breather following the global watchdog against financial crimes temporarily postponed all mutual evaluations and follow-up deadlines in the wake of grave health risk following COVID-9 pandemic, it said.

 

The agency also put a general pause in the review process, this provides you with additional four months to Pakistan to meet up the requirements.

In February, the FATF gave Pakistan, which missed 13 targets, a four-month grace period to complete its 27-point action plan against ML&TF committed with the international community.

In its third plenary held nearly in June, the FATF decided to keep Pakistan in the grey list as Islamabad didn't check flow of money to terror groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM).

With Pakistan's continuation in the 'grey list', it is increasingly becoming difficult for the united states to get school funding from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and europe, thus further boosting problems for the country which is in a precarious finances. 

In July, Pakistan's Senate unanimously approved two bills linked to the tough conditions set by FATF. In August, Parliament's lower house passed four FATF-related bills as part of the efforts by Pakistan to go from the FATF's grey list to the white list.

In September, the joint session of the Parliament amended about 15 laws to upgrade its legal system matching international standards as required by the FATF. The government has recently submitted its are accountable to the FATF and its affiliated review groups and taken care of immediately their comments, detailing compliance with the 13 outstanding action points, the Dawn report stated.

The FATF meeting this month will review Pakistan's compliance with the 13 remaining action points. The FATF will examine if the united states had demonstrated remedial actions and sanctions applied in cases of violations relating to terrorist financing risk management and terror financing sanctions obligations. 

The FATF may also judge if competent authorities were cooperating and taking action to recognize and taking enforcement action against illegal money or value transfer services and had verified implementation of cross-border currency and bearer negotiable instruments controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions.

Pakistan has also to determine if law enforcement agencies were identifying and investigating the widest selection of terror financing activity and that terrorist financing (TF) probes and prosecution target designated persons and entities, and those acting on behalf or at the direction of the designated folks or entities besides showing TF prosecutions bring about effective, proportionate and dissuasive sanctions, the report said. 

The country's outstanding action areas also include effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, including stopping the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting usage of funds and financial services, it said.

If the FATF in its meeting finds that Pakistan has failed to meet its requirements, there is every opportunity that the global body may put the united states in the 'Black List' along with North Korea and Iran.

In August, Prime Minister Imran Khan had warned that if blacklisted at the FATF, Pakistan's entire economy will be destroyed due to inflation and an enormous fall in Pakistani Rupee. 

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing, and other related threats to the integrity of the international economic climate.

The FATF currently has 39 members including two regional organisations - the European Commission and Gulf Cooperation Council.