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Pakistan given extra action plan to check terror financing before it can get off FATF grey list

The Paris-based Financial Action Task Force (FATF) has now given Pakistan time until October to fulfil the previously set requirements along with the new action plan. 

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New Delhi: Pakistan will continue to remain on the Financial Action Task Force (FATF) ‘grey list’, with the Paris-based terror financing watchdog Friday stating that while the country has made progress, it is yet to address concerns regarding investigation and prosecution of senior leaders and commanders of UN-designated terror groups. 

At the five-day plenary that concluded Friday, the FATF said Islamabad has not met all the parameters laid out by the body and that “deficiencies” remain in the measures taken by Pakistan to check money laundering and terror financing, especially of those groups proscribed by the United Nations (UN). 

“Pakistan remains under increased monitoring… It has largely addressed 26 out of 27 items on the action plan it first committed to in June 2018. That action plan focussed on terrorist financing issues,” Marcus Pleyer, president, FATF, said at a virtual press conference. “One action plan still needs to be completed. It concerns investigation and prosecution of senior leaders and commanders of UN-designated terror groups.” 

The development comes a day after India’s National Security Advisor Ajit Doval met with his Pakistani counterpart Moeed Yusuf at the meeting of the NSAs of the Shanghai Organisation Cooperation (SCO). Doval had proposed an “action plan” against Pakistan-based terror groups such as the Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM). 

Also read: Previous govts responsible for Pakistan’s name on FATF grey list, alleges Mehmood Qureshi

‘Risk of money laundering high in Pakistan’ 

Pleyer also said that the risk of money laundering remained high in Pakistan. 

“In addition to this (meeting all 27 parameters), a separate process has been taking place over the past few years,” he said. “… Pakistan is still failing to implement the global efforts to have standards across a number of areas. This means risks of money laundering remain high, which in turn can fuel corruption and organised crime.”

Thus, he said, an ‘action plan’ has been chalked up against that country for “increased” money laundering investigations. This has made matters more complicated for Pakistan.

He added that while the Pakistani government has made “substantial progress” in making its counterterrorist financial systems stronger and more effective, it now needs to adhere to a “separate process”. 

This, technically means, Islamabad will now have to meet a separate set of parameters over and above the 27 laid out previously. 

Pleyer said that in 2019, the FATF’s regional partners — Asia-Pacific Group — identified a number of “serious issues” during its assessment of Pakistan’s entire anti-money laundering and counter-terrorism financing system. Hence, the need for a separate process has risen. 

These investigations will include on-site and off-site supervision of terror financing, increased prosecutions of UN-listed terrorist outfits such as the al Qaeda, the Taliban, Haqqani Network, LeT, JeM, Jamaat-ud-Dawah (JuD), Falah-e-Insaniyat Foundation and Islamic State. 

In the last couple of years, Pakistan has taken some action against leaders of the LeT and the JuD

Pakistan given time till October 2021

The FATF has now given Pakistan time until October to meet all the requirements. October is when the FATF plenary, its highest decision-making body, will again meet.

“We will next meet in October,” the FATF president said. “As soon as the last remaining item of the action plan is largely addressed, the membership will decide whether they grant an on-site for this (the separate action plan).” 

“Usually once an on-site is successfully completed, the membership can decide on de-listing a country. But in this case, we have a parallel action plan,” Pleyer added. “…Pakistan must also complete all action points in this. Then there will be a separate on-site on this action plan. If both action items are completed and both on-site are successfully completed, then the FATF members will decide on de-listing.” 

When the FATF plenary last met in February 2021, it was assumed that since Pakistan had met most of the action items, it would be removed from the ‘grey list’ by this plenary. 

With this FATF decision, Pakistan’s economy will weaken further. Islamabad has set a target of 4.8 per cent GDP growth for fiscal 2021-2022 and fiscal deficit target of 6.3 per cent.

(Edited by Arun Prashanth)

Also read: Pakistan police takes custody of suspects after car bomb blast outside Hafiz Saeed’s house


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