The push to take Pakistan off the grey list of the Financial Action Task Force (FATF) is reportedly coming from Western countries, particularly the US, following an on-site inspection earlier this year.
News18 had reported on October 14 that Pakistan is likely to be taken off the FATF grey list, around four years after it was placed in the infamous category for failing to check money laundering and terror financing.
The rumoured decision to take Pakistan off the list has reportedly been initiated by US and European countries after a positive recommendation was made based on an on-site inspection in Pakistan earlier this year.
While India reportedly wanted a reporting mechanism to be institutionalised to keep monitoring Pakistan’s progress, European countries also wanted Pakistan to continually report to the Asia/Pacific Group on Money Laundering to prevent backsliding.
Pakistan was included in the increased monitoring list in June 2018 for deficiencies in its legal, financial, regulatory, investigations, prosecution, judicial and non-government sector to fight money laundering and combat terror financing considered serious threat to global financial system.
The Paris-based global watchdog on money laundering and terrorist financing said that the first FATF Plenary under the two-year Singapore Presidency of T Raja Kumar will take place on October 20-21. Pakistan has made high-level political commitments to address these deficiencies under a 27-point action plan. But later the number of action points was enhanced to 34.
With Pakistan’s continuation on the grey list, it had increasingly become difficult for Islamabad to get financial aid from the IMF, the World Bank, the Asian Development Bank (ADB) and the European Union, thus further enhancing problems for the cash-strapped country.
A 15-member joint delegation of the FATF and its Sydney-based regional affiliate — Asia Pacific Group — paid an onsite visit to Pakistan from August 29 to September 2 to verify the country’s compliance with the 34-point action plan committed with the FATF. The authorities had kept the countrywide visit of the delegation low profile and later termed it a smooth and successful visit.
In June this year, FATF had found Pakistan compliant or largely compliant on all the 34 points and had decided to field an onsite mission to verify it on ground before formally announcing the country’s exit from the grey list that finally took place in August and September.
According to the Dawn newspaper, the government had given a commitment to the IMF to review by end-June 2022 the implementation of AML/CFT controls by financial institutions with respect to the tax amnesty programme for the construction sector and promised to meet the timelines for the implementation of APG’s 2021 Action Plan.
Pakistan has so far avoided being on the black list of the FATF with the help of close allies like China, Turkey and Malaysia.
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 financial system.
With PTI inputs