Pakistan to remain in FATF grey list till June

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Context

On February 25, the Global anti-terrorism watchdog Financial Action Task Force (FATF) decided to retain Pakistan on the “Grey list” till the next review of its performance during the June 2021 plenary session. 

Key Highlights

• The decision of retaining Pakistan on the “Grey list by the FATF was taken in the light of country’s failure to fully comply with the 27-point action plan of to combat the terrorism. This decision was taken following a virtual plenary session that was over three days.

  • Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.

  • Countries placed on the ‘grey’ list face problems in getting loans from IMF, World Bank, ADB and other countries, Reduction in international trade and International boycott.

• The FATF has decided to keep Pakistan into the grey list and will remain under increased monitoring because serious deficiencies were observed with respect to the terror financing.

• Though, Pakistan has taken several steps but it needs to act upon three important points out of 27 action points.

• FATF stated that, Pakistan needs to work on implementing following three remaining items out of 27 items:

  • Pakistan needs to demonstrate the Terror funding investigations and prosecutions targeting the persons & entities acting on behalf of the designated persons or entities.

  • Pakistan needs to demonstrate that Terror funding prosecutions result in Proportionate, effective and dissuasive sanctions.

  • Pakistan needs to demonstrate the effective implementation of targeted financial sanctions against all the UN security council resolution 1267 and 1373 designated terrorists.

 About FATF

• The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 on the initiative of the G7. 

• FATF is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in various areas. 

• The FATF Secretariat is housed at the OECD headquarters in Paris.