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Tuesday January 31, 2023

FATF decides on removing Pakistan from grey list today

Apart from Pakistan, FATF would also be announcing its verdict on North Korea, Turkey and Iran

October 21, 2022
Financial Action Task Force plenary session in progress on Feb. 19, 2020 in Paris
Financial Action Task Force plenary session in progress on Feb. 19, 2020 in Paris

ISLAMABAD: There are strong chances and high hopes by many experts and diplomats that the Financial Action Task Force (FATF), a global money-laundering and terrorism-financing watchdog, will finally remove Pakistan from its grey list as it meets in Paris on Friday (today).

Pakistan managed to complete the 2021 action a year ahead of the prescribed timelines. India, meanwhile, said it would be monitoring Pakistan if it succeeded in exiting from the grey list.

Apart from Pakistan, FATF would also be announcing its verdict on North Korea, Turkey and Iran. Pakistan’s four-year process under different governments to confront terrorism financing had cleared all requirements and conditions except for one related to demonstrating investigations and prosecutions against senior leaders of the UN-designated militant groups, which it finally completed.

Important for Pakistan, which had relentlessly been fighting terrorism on home ground through military operations, exiting the grey list would send a loud and clear message worldwide that Pakistan had through reforms and put an end to terror-financing as well.

Minister of State Ms Hina Rabbani Khar has already reached Paris with a team representing Pakistan. Officially at least, Ministry of Foreign Affairs is not willing to comment on the issue publicly and has refrained from offering any comments, with one diplomat telling The News, “Any and all comments are counterproductive”.

However, former foreign secretary Jalil Abbas Jillani told The News, “We have met all the bench marks. Our relations with the US are improving and the US will most probably drop its objections. I don’t see any reason for being kept in the grey list. We will be out of it”.

Earlier in June, while in Berlin to attend the FATF plenary meeting, Ms. Khar told DW News that exiting the global money-laundering and terrorist-financing watchdog’s grey list and having good ties with the West were crucial for Pakistan’s economy.

Pakistan getting off the grey list would ensure more foreign direct investment, which had shown a downward trend recently and there would also be reduction in foreign scrutiny of global transactions.

Also in June, after returning from Berlin, Ms. Khar said that there was recognition of Pakistan’s tremendous progress and commitment to improve its international anti-money laundering and combating financing of terrorism and proliferation (AML/CFT) standards. She said the 2018 action plan had been closed with no pendency of action on part of Pakistan whilst the action plan of 2021 was completed a year ahead of the prescribed timelines.

It was after this that FATF had, while not removing Pakistan from the grey list, did take it one step nearer and authorised an onsite visit which took place earlier this year and it validated the process of implementation of reforms Pakistan had undertaken.

The Foreign Office, while initially keeping the visit secret, did concede later that the visit was “successful” and “a logical conclusion” was expected. Meanwhile, speaking to Reuters, Michael Kugelman, director of the South Asia Institute at the Washington-based Wilson Centre think-tank, said, “When Pakistan, in recent months, announced new sentences for Lashkar-e-Taiba’s Hafiz Saeed and Sajid Mir — that’s what got things done in the end.”

Economist and former Citigroup banker Yousuf Nazar, told Reuters, “Pakistan’s latest actions to jail, fine and confiscate assets of individuals linked to anti-India militant groups are key reasons it could be taken off the list”. However, Pakistan’s actions for reforms and FATF’s announcement on Friday comes at a time when India had raised the red flag in China’s move at the UNSC when it put technical holds on “joint India-US proposals to list two Lashkar-e-Taiba leaders on the UNSC terrorist list. These holds were put on Hafiz Saeed’s son Talha Saeed. China, to the disappointment of India, put five holds at the UNSC in four months. Talha Saeed was seen participating recently in Pakistan’s by-elections.

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