New Delhi: Pakistan again escaped being blacklisted by the Paris-based Financial Action Task Force (FATF) Friday, even as it was issued a stern warning to meet all parametres by the next plenary.
So, Pakistan will continue to remain on the FATF grey list, until February 2020, for its failure to combat money laundering and terrorist financing. Entering the blacklist would have meant stringent actions that tantamount to financial sanctions on Pakistan.
Pakistan has been in and out of the FATF’s grey list since 2008. In June 2018, the global financing watchdog had set a 27-Point Action Plan for Pakistan, which it was expected to meet by October 2019. But Pakistan could only fulfill five targets.
“Pakistan’s failure to fulfil FATF’s global standards is an issue we take very seriously. As a result, FATF is giving a very clear warning that if by February 2020 the country does not make significant progress, we would consider further actions, which potentially include putting the country in public statement, often referred to as the blacklist,” Xiangmin Liu, president, FATF said at a press conference.
“Despite a high-level of commitment, Pakistan has not made enough progress. Pakistan’s action-plan deadline has now expired while Pakistan has made some tangible progress under its new government, which the FATF welcomes. The majority of the issues in the action-plan still remains outstanding, including effective measures to prevent terrorist financing. Pakistan needs to do more and it needs to do it faster,” the President said.
Xiangmin added that the main purpose was not to punish Pakistan but to “to incentivise to make more changes and to make the changes faster”.
He also said that FATF has identified “serious weaknesses” in Pakistan’s terrorist financing and anti-money laundering framework. The FATF president said the Imran Khan government had demonstrated “strong political will to implement the action plan”.
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The FATF and its global network, he said, will support Pakistani authorities to both implement the plan and build their capacities. Additionally, it will provide all necessary training and assistance and “we have also called our network and global member to help in that regard”.
In a statement issued after the conclusion of the plenary, FATF said there are still some deficiencies on Pakistan’s part “in demonstrating a sufficient understanding of Pakistan’s transnational TF (terrorist financing) risks, and more broadly, Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction”.
What experts say
According to experts, Pakistan will be able to avoid getting blacklisted even in the February 2020 plenary. The FATF Plenary is the highest decision-making body and meets thrice in a year – February, June and October.
“This was on the cards. They will not be blacklisted even in February. But there will be constant pressure on them, which is very much needed. Blacklisting will have ramifications because then global financial institutions will not be able to lend money to them which means they will take help from their allies like China,” said former foreign secretary Kanwal Sibal.
Sibal added that India should feel relieved that at least until February Pakistan will not be pushing terrorists across its borders to India, which means less trouble in Kashmir.
“Today’s FATF decision means continued international pressure on Pakistan. Its actions will remain closely monitored. Continuation on the grey list means that international scrutiny remains and Pakistan has yet to show the world that they are correcting their ways,” said T.C.A. Raghavan, director general, Indian Council of World Affairs.
Raghavan, a former Indian high commissioner to Pakistan, added that the onus remains on Pakistan to correct the laxity in its financial system which enables easy terrorist financing.
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