The status quo on the face of it is deceptive. Pakistan was on the grey list, it remains there, but in fiercely contested negotiations over a hotly debated space. On the face of it, again, and deceptively, again, Pakistan is reported to have made progress now on 24 of the 27 steps it was required to take by the Financial Action Task Force (FATF).
As it stands, the three steps not taken could be those that would matter most to take. And in asking Pakistan to take those steps now, the FATF has pointed to what it has not done.
The glass is not quite 24/27 full. In noting such fraction of it that is full, the FATF words itself rather cautiously.
The FATF says that Pakistan law enforcement agencies are now identifying and investigating violations, and demonstrating enforcement. They are also working to prevent raising and moving of funds by designated persons. Some movement forward acknowledged here, but more by way of intention than necessarily action. Not a categorical clean chit certainly, not even on all supposedly done.
Consider the fraction that FATF found not done, that is implicit from what the FATF now wants Pakistan to do.
• Pakistan must demonstrate targeted financial sanctions against all designated persons and groups.
• Pakistan must show now that investigations and prosecutions then target those acting on behalf of designated persons.
• And it must show that its actions result in effective and dissuasive sanctions.
That it is not doing enough on these three is a lot of not doing. That demand is really an observation that Pakistan is taking steps against designated persons and groups only selectively, that these are now delegating their tasks to other entities that Pakistan is not pursuing, and that effective and dissuasive results are not visible from such steps as it says it is taking.
Pakistan has been given yet another deadline now till the June FATF plenary. It’s been told that all deadlines for implementing the action plan have expired. But that it is told every time, Pakistan must be quite used to it. But the FATF cannot keep Pakistan on its grey list for ever. continuing failure on these critical issues could make June difficult for Pakistan.
Politically the US will inevitably be the decisive, or decisively influential voice. Particularly under President Biden, who as vice-president and earlier has kept a particularly close eye on Pakistan, and who is known to be more than capable of making a sharp distinction between rhetoric and reality in Pakistan.
Finally, and secretly, and not least, FATF has announced it is implementing new risk-based rather than rule-based investigating systems. And it has prepared a confidential check-list. The difficulty is, that will still need someone to do the checking.