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Pakistan remains in FATF ‘grey list’ for terror financing, money laundering, but nearing exit

Financial Action Task Force chief says Pakistan has met all requirements to exit grey list, but terror financing watchdog will assess if it can ‘sustain’ reforms by holding on-site visit.

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New Delhi: Pakistan continued to remain in the ‘grey list’ of the Paris-based Financial Action Task Force (FATF), where it has been since June 2018, even though the terror-financing watchdog Friday lauded the efforts made by Islamabad to reform its financial system and prevent money laundering and terror financing.

However, the FATF Friday said that as part of the process, the Paris-based international policy-making body will now have to undertake on-site visits in Pakistan to assess first hand how well it’s meeting the conditions to exit the grey list.

At the end of the international body’s four-day plenary in Berlin, FATF president Marcus Pleyer said, “The FATF has agreed that Pakistan has substantially completed its action plans at a technical level. In the past few months, Pakistan has demonstrated that it is now pursuing terrorist financing investigations and prosecutions against senior leaders of UN-designated terrorist groups and pursuing money-laundering investigations and prosecutions in line with its risk profile,” 

He added, “The reforms implemented by Pakistan are good for the stability and security of the country and the region. It will ensure that Pakistan’s authorities can more effectively tackle money laundering and funding of terrorist groups.”

Addressing the media at the conclusion of the plenary, Player also said that the FATF will now conduct an on-site visit to “check” that the reforms undertaken by Islamabad are “in place” and “can be sustained into the future.”

Responding to a query by ThePrint, the FATF president said the on-site inspection will be done by experts in order to generate “accurate and clear results” to verify that Pakistan has indeed put an end to financing terrorists outfits such as Lashkar-e-Taiba (LeT), Jaish-e-Mohammed (JeM), al-Qaeda, the Haqqani Network, Jamaat-ud-Dawa (JuD), the Falah-e-Insaniat Foundation and the Islamic State, as proscribed by the UN.

“Once the reviewers have seen that the action plan is largely completed, then always an on-site is granted in order to verify that everything on the ground is really completed and to check whether it is sustainable and irreversible,” he said, adding that the on-site inspection will take time as all action plan items need to thoroughly checked.  

The on-site inspection will be completed before the October plenary that will take place in Paris. The FATF plenary is the highest decision-making body of the international body.

‘Pakistan demonstrated action against terrorist groups’

According to the FATF plenary report, since June 2018 when Pakistan entered the grey list for the first time, it has made a “high-level” commitment to work on the action items prescribed by the body.

 “Pakistan’s continued political commitment to combating both terrorist financing and money laundering has led to significant progress. In particular, Pakistan demonstrated that TF (terror financing) investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups, and that there is a positive upwards trend in the number of ML (money laundering) investigations and prosecutions being pursued in Pakistan, in line with Pakistan’s risk profile,” it said.

The final FATF outcome document also said that Pakistan also largely addressed its 2021 action plan “ahead of the set times”.

At its June 2022 plenary, the FATF made the initial determination that Pakistan has substantially completed its two action plans, covering 34 items.

‘Well done Pakistan’, says Pakistan’s foreign ministry

Hina Rabbani Khar, Pakistan’s Minister of State for Foreign Affairs, who led a delegation to Berlin, said the positive outcome Friday was the result of a four-year “challenging journey”.

“Congrats Pak! FATF declares both Action Plans complete. Intl community has unanimously ack our efforts. Our success is the result of 4 yrs of challenging journey. Pak reaffirms resolve to continue the momentum and give our economy a boost. Well done Pak Team FATF. Pak Zindabad!,” Khar said in a tweet.

(Edited by Rohan Manoj)

Also read: China does it again. Stops India-US move for UN sanctions on top Lashkar terrorist in Pakistan


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