Pakistan And The FATF Grey List


Oriental Review l

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions, with the objectives of the to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. In principle, the FATF is, therefore, a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. However, there is evidence where like other institutions are influenced by few countries and used as a coercion tool, and some nations were put under a grey list or blacklist to achieve political goals.  Unfortunately, most of the international institutions have been politicized including UN, World Bank, IMF, and FATF, etc.

As long as Pakistan was a non-NATO close partner with the US in cold war against communism threat or front line ally on War on Terror, most of such institutions were helping Pakistan and I must say Pakistan was beneficiary of such institutions. But the situation got reversed when the Western World has written-off completely and coerced.

Pakistan was put in the grey list and demanded to take certain measures. Pakistan did take measures and reported to the FATF with complete details and evidence, during the joint group of FATF meeting held in Beijing from January 21 to 23. China had shown satisfaction over Pakistan’s report of compliance. Out of total 27 actions, Pakistan was found fully compliant on five points in the last plenary meeting and now Pakistan was making efforts to comply with the remaining 22 major points. Now, Pakistan would need 12 votes out of the total 39 to come out from the grey list and land into the white report in the plenary meeting of the FATF scheduled to be held in Paris on February 16, 2020. Pakistan had briefed the joint group of FATF meetings about its action that had recently taken. The country’s central bank had imposed penalties on defaulting banks and statutory sanctions regime was implemented. The mandatory currency declaration scheme was also implemented at all airports in the country.

Pakistan’s team led by Hammad Azhar, who had defended the country’s compliance report, is hopeful that Pakistan will come out from the FATF grey list next month.  It is worth noticing that Pakistan’s action had also impressed China and the United States.  Especially Indian media had also acknowledged the possibility of Pakistan’s exit from the FATF grey list.

Chinese Foreign Ministry Spokesperson Geng Shuang said “Pakistan has made all-out efforts to strengthen the domestic CFT regime with visible progress. Its political will and active efforts should be recognized and encouraged by the international community. We hope FATF will offer Pakistan constructive support and assistance in its continued efforts to improve its counter-terrorism financing system and effectively fight terrorist financing.”

Pakistan has taken several initiatives to improve its governance and this is in Pakistan’s interest too. The current leadership in Pakistan wanted to eliminate corruption in the country and improve governance. The ruling Party in Pakistan got votes from the public on its mandate to eliminate corruption, nepotism, and poverty. It is in-built agenda of the ruling party and coincides with the FATF demands.

The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally.  In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse. Pakistan is extending its full cooperation in a very transparent manner.

The FATF’s decision-making body, the FATF Plenary, meets three times per year.  It is hoped that the upcoming meeting in Paris in April 2020, Pakistan will get out of Greylist.

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