New Delhi: The Financial Action Task Force (FATF) delivered a strong warning to Pakistan as the country was retained on the international terror-financing watchdog’s “grey list” at the end of its February plenary Friday.
According to senior diplomats who spoke to ThePrint, any perception of insincerity on Islamabad’s part from here on could land it in the ‘black list’, which is likely to put its already-weak economy on a sticky wicket.
Its status on the list will be up for review at the FATF’s second of three annual plenaries in June.
At the just-concluded February plenary, the FATF’s highest decision-making forum, Pakistan was accused of failing to fully comply with the 27-point action plan, aimed at curbing terror-financing, issued by the watchdog. Even its steady ally China is said to have voted against taking Pakistan off the grey list over its own concerns about terrorism in the country.
“All deadlines in the action plan have expired… if significant and sustainable progress especially in prosecuting and penalising terrorist financing, not be made by the June 2020 Plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their Financial Institutions to give special attention to business relations and transactions with Pakistan,” the FATF chairman said at the conclusion of the five-day plenary that began Sunday.
No support from ally on grey list
Pakistan, notorious for harbouring terrorists, has been on the terror-financing grey list since June 2018. It has been keen on coming out of the grey list since it entails immense scrutiny by most countries that comprise the 39-member FATF, which is impacting foreign capital inflow into the country, diplomatic sources said.
The sources added that Pakistan ought to pull up its socks to keep up with the FATF action plan because “it will be hugely difficult” for the country to remain in the grey list forever.
Come October 2020, when the last plenary of the calendar year is held, Pakistan will have to come out of the grey list, they added. If it doesn’t, Pakistan “will find it harder to save itself from being blacklisted”.
Speaking about the outcome of the February plenary, a senior Indian diplomat said “Pakistan will continue in the grey list”.
“All its propaganda and false claims, as in the past, to mislead its public and world at large about exiting the FATF grey list in February 2020 has been decisively proved false,” the diplomat added.
According to a second diplomat, Pakistan needed 12-13 votes at the plenary to come out of the grey list, but couldn’t secure them. Pakistan, the diplomat said, could only manage the support of China, Turkey and Malaysia to save itself from being blacklisted.
The first diplomat said that, to get reprieve, Pakistan must take “urgent, credible, verifiable, irreversible and sustainable steps to effectively implement the FATF action plan fully”, including the prosecution and conviction of top leaders of all terrorism groups, and “address global concerns related to terrorism and terrorist-financing emanating from territory under its control”.
‘On expected lines’
Former Indian High Commissioner to Pakistan Sharat Sabharwal said the outcome of the February plenary was “on expected lines”.
“This time, the US had also supported it. They will not be blacklisted even in June. The Americans now feel beholden to Pakistan since they have facilitated the deal with the Taliban,” he added. “And if the situation goes well in Afghanistan, then there is no way they will be blacklisted.”
He was referring to the US State Department’s Friday announcement that America had been able to clinch a “Peace Deal” with the Taliban and an agreement to this effect will be signed by 29 February.
After decades of conflict, we have come to an understanding with the Taliban on a significant reduction in violence across #Afghanistan. This is an important step on a long road to peace, and I call on all Afghans to seize this opportunity.
— Secretary Pompeo (@SecPompeo) February 21, 2020
Sabharwal said China stuck to its stance and continued to support Pakistan. He added that the only reason Beijing didn’t support Pakistan coming out of the grey list was because “it fears that its investment there might get jeopardised if terrorists continue to get support by Pakistan”.