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No Clean Chit from FATF, Pakistan to Remain on Grey List Till June 2020


Last Updated: February 21, 2020, 18:03 IST

Pakistan PM Imran Khan. (Reuters file photo)

Pakistan PM Imran Khan. (Reuters file photo)

In a major setback for Pakistan, the country will remain on the FATF Grey List till June 2020.

Islamabad: In a major setback for Pakistan, the country will remain on the FATF Grey List till June 2020 and has been warned of stern action if it fails to check flow of money to terror groups like the LeT and the JeM, sources said.

The decision was taken by the global terror financing watchdog after the conclusion of the February 16-21 group meetings and plenary in Paris.

The Financial Action Task Force (FATF) in October decided to keep Pakistan on its Grey List for failure to curb funnelling of funds to terror groups Lashkar-e-Taiba, Jaish-e-Mohammed and others. It has also warned Pakistan that if it does not complete a full action plan by June, it could lead to consequences on its businesses, a source said.

The plenary noted that Pakistan addressed only a few of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba (LeT), the Jaish-e-Mohammad (JeM) and the Hizbul Mujahideen, which are responsible for a series of attacks in India.

The FATF said Pakistan has to swiftly complete its full action plan by June, the source said.

If Pakistan fails to comply with the FATF directive, there is every possibility that the global body may put the country in the 'Black List' along with North Korea and Iran.

India has been maintaining that Pakistan extends regular support to terror groups like the LeT, the JeM and the Hizbul Mujahideen, whose prime target is India, and has urged the FATF to take action against Islamabad.

Pakistan needed 12 votes out of 39 to exit the 'Grey List' and move to the 'White List'. To avoid the "Black List", it needs the support of three countries.

The 'Grey Listing' of Pakistan came three days after a sub-group of the FATF recommended continuation of the country in it.

The FATF meeting, from February 16 to 21, was held a week after an anti-terrorism court in Pakistan sentenced Hafiz Saeed, the mastermind of the 2008 Mumbai attack and founder of the LeT, to 11 years in two terror financing cases.

The Pakistani court's judgment came ostensibly to please the FATF and western countries so that the country can exit the 'Grey List'.

Pakistan is believed to have received strong backing from Malaysia but failed to impress western nations due to India's consistent efforts by providing materials and evidence on Pakistan's inaction to check funding to terror groups operating from its soil.

With Pakistan's continuation in the 'Grey List', it will be difficult for the country to get financial aid from the IMF, the World Bank, the ADB and the European Union, thus further enhancing problems for the nation which is in a precarious financial situation.

Pakistan is already finalising major amendments to at least a dozen of its laws to meet the FATF requirements by June this year.

Saeed, a UN-designated terrorist whom the US has placed a $10 million bounty on, was arrested on July 17 in the terror financing cases. The 70-year-old fiery cleric is lodged at the high-security Kot Lakhpat jail here.

Based on these steps, the country's performance would be judged in the next FATF plenary in October 2020, the report said.

Pakistan has also recently informed the FATF that JeM founder Masood Azhar and his family are "missing". It has claimed that there were only 16 UN designated terrorists in Pakistan, of which "seven are dead". Of the nine who are alive, seven had applied to the UN for exemption from financial and travel restrictions.

In the last month's FATF meeting in Beijing, Pakistan got support of Malaysia and Turkey besides FATF current chair China. In the Beijing meeting, Pakistan provided a list of its action taken to comply with FATF directions.

It submitted a 650-page review report to the FATF on January 8. The report was submitted in response to 150 questions raised by the FATF regarding new Pakistani policies on money laundering. The report outlined the steps taken by Pakistan between October 2019 and January 2020 to implement the group's recommendations.

In January, Pakistan urged the US to support its bid to exit from FATF's grey list ahead of a key meeting of the international terror financing watchdog in Beijing in which Islamabad's efforts to adopt stricter laws against terror financing and money laundering were scrutinised.

(With inputs from PTI)

first published:February 21, 2020, 13:43 IST
last updated:February 21, 2020, 18:03 IST
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