FATF breather

 
February 23, 2020

We have both good news and bad news from the Financial Action Task Force meeting that concluded in Paris on February 21. Let’s first celebrate the good news that somehow Pakistan has been...

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We have both good news and bad news from the Financial Action Task Force (FATF) meeting that concluded in Paris on February 21. Let’s first celebrate the good news that somehow Pakistan has been able to avoid the black list – at least for the time being. The FATF has appreciated Pakistan’s efforts for implementing the 27-point agenda given in June, 2018, when the FATF placed the country on the grey list. The good news also includes recognition by the FATF that Pakistan has successfully abided by at least 14 of the 27 points that the country was supposed to fully comply with. Further, we must appreciate the breather that Pakistan has been given till June 2020, to comply with the remaining requirements if the country wants to get out of the grey list which is in fact a jurisdiction under increased monitoring by the FATF.

Currently, only two countries are in the black list: Iran and North Korea, and Pakistan’s efforts to not be included in that ignominious list are appreciable. Now, the bad news. The measure of failure or success of an effort lies in the expectation that we place in that attempt. In this case, our expectation was to get out of the grey list. First, the placement of Pakistan in the grey list itself in 2018 did not add to our prestige in the world. Then we were supposed to comply with all prerequisites to get out of the list by October 2019. Our lacklustre efforts till October last year also failed to extract Pakistan from the grey list. Then we managed to get a reprieve till February 2020 to show our achievements against terror financing. During the past four months, Pakistan showed remarkable progress but the bad news is that the country still failed to impress the FATF decision-making body to let it off the hook.

The decision by the FATF to maintain Pakistan’s status on the grey list is not exactly a ground for celebration. Remaining on the grey list does mean that we are seen as among the countries that have inadequate control over curbing money laundering and terrorism financing. The next review in June is just three months away and can present a make-or-break situation for Pakistan. FATF’s Compliance Documents are very clear in this regard and let there be no confusion or chest-thumping about this serious matter. The FATF has in unequivocal terms highlighted “the need for further actions for completing the Action Plan by June 2020.” Now, a highly sober attitude is called for. Let’s hope that the warning from the FATF does not get lost in the noise of celebration.



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