Final chance with no escape route; FATF asserts ‘if Pakistan by Feb 2020 does not act, it will be placed on blacklist’

New Delhi, October 18: Pitching on member nations and close aides, Pakistan hoped to gain some support in escaping the Financial Action Task Force (FATF) grey list. But little did Pakistan know that there is no escape route here. The FATF President stated that if by February 2020 Pakistan does not act, it will be placed on blacklist. As of now, Pakistan will remain on the FATF's grey list till February 2020 and has been asked to fulfil its commitments by that time period.

 

The Financial Action Task Force (FATF) plenary meeting ended on October 18. Most members expressed serious concern on Pakistan's progress on its anti-finance terror commitments. In a statement asserted by FATF, it stated, “Strongly urge Pakistan to swiftly complete its full action plan by February 2020, otherwise should significant and sustainable progress not be made across the full range of its action plan by next Plenary, the FATF will take action, including urging members to advise their financial institutions to give special attention to business relations, transactions with Pakistan”. 

The FATF discussed all jurisdictions, which are under review, including Pakistan, and there was consensus on Pakistan, with its poor performance on the 27-point Action Plan, despite expiry of its 15-month timelines. “It was noted that Pakistan was able to address only five out of 27 items. It was unanimously decided to express serious concern with overall lack of progress in addressing its transnational terror funding risks,” the official said.

The FATF President noted that despite a high level commitment from Pakistan. Pakistan has not made enough progress. Majority of issues are outstanding. FATF is giving clear warning, if by February 2020, the country does not make enough measures, the country will be put on blacklist

Pakistan was put on the grey list by the FATF last year and is causing a loss of $10 billion to Pakistani economy annually. A blacklist will further have a detrimental impact on Pakistan's weak economy as investors won't be keen to invest in a country that is prone to terror financing. If Pakistan continues with the 'Grey List' or is put in 'Dark Grey' list, it would be very difficult for the country to get financial aid from the International Monetary Fund (IMF), the World Bank and the European Union, making its financial condition more precarious.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system. It places nations in three categories – White List, Black List and Grey List. Pakistan was placed on the Grey List by the FATF in June last year and was given a plan of action to complete it by October 2019, or face the risk of being placed on the black list with Iran and North Korea.