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Wednesday, April 17, 2024

Pakistan Avoids Blacklisting: Remains in Grey List Until February 2020

Pakistan has avoided being blacklisted by the FATF authorities, however, it continues to remain in the grey list the authorities have given Islamabad a four-month extension to fulfill the remaining obligations presented in the 27 recommendations.

Pakistan has narrowly escaped the risk of being placed on the FATF blacklist, which would have accompanied crippling sanctions and economic downfall for the country.

The Financial Action Task Force (FATF) has decided in essence to keep Pakistan on its grey list until February 2020, and Islamabad has been direct to undertake “extra measures” to completely eliminate the specter of terror financing and money laundering.

Pakistan Avoids Blacklisting

On Tuesday, a Pakistani delegation, led by the Minister of Economic Affairs Hammad Azhar, presented the FATF authorities with a detailed review of the measures taken by Islamabad to curb money laundering and terror financing. The delegation had arrived in Paris for the two-day FATF session earlier this week.

However, the authorities observed that Pakistan still needs to undertake extra measures to avoid the blacklist and exhibit a stronger response to eliminate the scourge of terror financing and money laundering.

Media reports indicate that the FATF has associated the blacklisting of Pakistan with dissatisfying measures to eliminate money laundering and terror financing, however, the final decision will come in February 2020.

It is important to note that these reports have come forward in media speculations, while the FATF is due to make a formal announcement with regards to its decision on October 18.

Read more: FATF War: Pakistan Fights for White list – India Lobby For Blacklist

A Paris-based correspondent of Aaj TV, Younus Khan, reported that the FATF has decided to give Pakistan an extension of four months to aid in implementing the remaining recommendations put forward by the intergovernmental organization.

Speaking to the media, Khan said that the FATF authorities will put forward a formal statement on Friday, October 18, which will conclude the ongoing FATF session in the French capital.

Pakistan’s Progress

A delegation led by the Minister for Economic Affairs, Hammad Azhar, informed the FATF authorities that Pakistan has achieved great progress in fulfilling 20 out of the 27 recommendations. The FATF authorities expressed satisfaction on the progress achieved by Pakistan in multiple arenas, and the measures taken to curb terror financing.

The six-day FATF week will be focused on the disruption of financial exchanges associated with acts of terrorism and crime, and contemplate measures to enhance global security and safety. China, Malaysia and Turkey, Pakistan’s “three friends” have come forward to appreciate the measures taken by Islamabad.

Read more: FATF: International Lobbying by India Might Retain Pakistan in Greylist

The meeting was attended by representatives from 205 countries and states across the world, alongside the United Nations, World Bank, IMF and other global regulatory bodies.

Indian Lobbying Continues

During the FATF session on Tuesday, India had recommended the intergovernmental organization to blacklist Pakistan with a plea that Islamabad has allowed Hafiz Saeed to access the funds from his frozen accounts.

New Delhi had also raised issues with the tax amnesty scheme provided in Pakistan. However, the outright support of China, Malaysia, and Turkey moved the FATF authorities to not add Pakistan to the blacklist, and give it an extension to work on implementing the remaining recommendations.

The PTI-led government considers the FATF decision to keep Pakistan on the grey list, a success for the government, as it has succeeded in avoiding the blacklist and its accompanying sanctions. The FATF authorities have also acknowledged and commended the measures taken by Pakistan to deprive terrorists of financial resources, and to curb money laundering.

However, the authorities have stressed upon the need for Pakistan to fulfill the remaining obligations of the action plan, and undertake further measures to strengthen its resolve to fight terror financing and money laundering.

Read more: Has FATF warning put state machinery in aggressive mode?

Analysts had predicted that Indian lobbying attempts will force Pakistan to remain in the grey list, however, the news still comes as a success as the main goal of the Imran Khan-led government was to avoid being blacklisted.

In August 2019, the Asia Pacific Group (APG), a regional counterpart of the FATF, had raised concern over Pakistan’s progress owing to technical issues. Islamabad is mandated to submit its performance report to the APG every three months.

Earlier in September, Economic Affairs Minister Hammad Azhar had led a high-level delegation to attend a two-day session with the APG to discuss Pakistan’s performance on the action plan proposed by the FATF.

Days ahead of the ongoing FATF review in Paris, a Pakistani delegation had met with the FATF Joint Working Group (JWG), which disclosed that out of the 27 recommendations, Pakistan is largely compliant with 10 points, partially compliant with 10 points, and non-compliant on 7 points.

During the meeting, held in Bangkok, the Pakistani delegation defended Islamabad’s position, demonstrated the progress made by the country in the past one year.