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Pakistan to be put on FATF grey, not black, list in June: FO

By Mariana Baabar
March 01, 2018

ISLAMABAD: It has for the first time officially been confirmed that Pakistan is set to be put on the ‘grey list’ of the Financial Action Task Force (FATF) in June this year, for failing to fulfill the obligations to prevent terror financing, where banned militant outfits are involved in raising funds.

It, however, has also sent out a strong message to FATF, that Pakistan will not waste time to take “further actions for addressing any remaining deficiencies”.

“Pakistan will be assigned to the ‘grey list’ in June, once an Action Plan has been mutually negotiated. The statement that Pakistan will be transferred from the ‘grey’ to the ‘black’ list in June this year, is therefore not true. The FATF website clearly demarcates the countries in ‘black’ list, as those who are non-cooperative”, spokesman at the Foreign Office clarified on Wednesday.

“The deliberations within FATF are confidential, so I will not be able to share details”, the spokesman told the media. He pointed out that FATF has highlighted certain deficiencies in the Anti-Money Laundering and Countering of Terrorist Financing (AML/CFT) framework of Pakistan.

“The government of Pakistan, over the last a few years, has taken a number of measures to address these issues, including through enactment of legislation, issuance of regulations and guidelines by SBP and SECP to the financial sector, establishment of the Financial Monitoring Unit and implementation of UNSC 1267 sanctions on the entities of concern (JuD/FIF). We will take further actions for addressing any remaining deficiencies”, the spokesman added.

However, the spokesman vigorously denied any chance of Pakistan making it to the ‘black list‘ of FATF. “There is no question of inclusion of Pakistan in the black list as this is meant for countries not cooperating while Pakistan is actively cooperating with the Task Force”, the spokesman told the weekly media briefing. The ‘black list’ according to FATF is for countries which it judges to be non-cooperative in the global fight against money laundering and terrorist financing, calling them "Non-Cooperative Countries or Territories" (NCCTs)

Earlier, the government had gone for a week of bewilderment and confusion, when it failed to clarify the outcome of the FATF Paris meeting, leading to all kind of speculation, with the Foreign Office passing on questions to the Finance Ministry. To further queries the spokesman once again passed the buck to the Finance Ministry.

“On the questions regarding FATF, at the outset I would like to state that the lead Ministry for dealing with FATF/ICRG is the Ministry of Finance. Secondly, the internal processes of FATF are confidential. Therefore, I will not be able to comment on its deliberations,” he replied to the disappointment of media persons. There are worries that Pakistan may suffer a risk of being downgraded by multilateral lenders such as IMF, World Bank, ADB and also a reduction in the risk-rating by Moody’s, S&P and Fitch. However, the spokesman did not hold out any assurances in this regard.

To a query, the spokesman ignored queries on the Kabul Process underway on Wednesday, where in an unprecedented and surprising move, Afghanistan’s President Ashraf Ghani called on the Taliban to take part in peace talks to “save the country,” offering security and incentives such as passports to insurgents who join the negotiations, while recognising the Taliban as a party in future peace talks and as a legitimate political group.

There is no word officially, even from the Foreign Office, whether Pakistan will be represented at the Kabul Process, and whether it is Rawalpindi that had convinced the Afghan Taliban towards the negotiating table.

“Pakistan has always maintained the principled stance that the only solution to the Afghan conflict lies in a politically negotiated settlement led by an Afghan-owned peace process which should appropriately include all the Afghan parties and factions. A military approach over the past 17 years has failed to render the desired results. It has rather exacerbated the situation and increased the miseries of the Afghan civilians,” explained the spokesman.

Initially, reluctant to comment on the recently concluded visit of the US Senior Director for South and Central Asia at the NSC, Lisa Curtis, till the US Embassy released a statement, the spokesman finally refrained from a comment: “I will not be able to share any details, as the discussions are going on outside the public glare. However, rest assured that Pakistan conveyed its position on all the matters of national interest in the clearest manner to Ms Curtis.” He added that the meeting was to exchange views and understand each other's perspective on how to bring peace and stability in Afghanistan. “Both sides have a desire to work together to pursue our common objective of stabilising Afghanistan”, he added.

Giving details of the future of Pak-UK trade concessions related to the EU GSP Plus scheme after Brexit, the spokesman clarified: “The UK government has confirmed more than once through formal communications, as well as in a press statement, that it would continue to allow trade concessions to Pakistan after Brexit, as is being done by the EU through the GSP Plus scheme.

“Pakistan is successfully implementing the 27 International Conventions that it has signed under the agreement,” said the spokesman adding the annual trade between Pakistan and the United Kingdom stands at about $2.5 billion, with Pakistan’s exports to the United Kingdom at $1,591 million. “Pakistan’s imports from the UK are around $904 million. The main exports items to UK include: i) textiles, ii) rice, iii) woven cotton fabrics, iv) medical/surgical instruments, v) synthetic fabrics and vi) sports goods, whereas UK’s main exports to Pakistan are i) machinery and parts, ii) ores and concentrates of iron and steel, iii) chemical material and products, iv) medicinal and pharmaceutical products, v) iron and steel and products”, he said.

On India’s reported successful test flight of its Rustam-2 drone, which is being developed on the lines of the US predator drones for surveillance and reconnaissance, the spokesman said this technology was emerging as a world-wide trend. “It is essential to ensure that the use of drone technology is consistent with the principles of the UN Charter, International Humanitarian Law and other established norms of responsible state behavior,” the spokesman explained.

India’s development of drone technology, he said, is worrying when seen in the larger context of its buildup and expansion of military capabilities in the conventional and non-conventional domains, which are subjecting regional strategic stability to increasing strain.