Paris-based global money-laundering and terror-financing watchdog Financial Action Task Force (FATF) said on Friday that Pakistan will continue to be on the “grey list” of countries. Pakistan has been on the ‘grey list’ since 2018. It first figured in a FATF statement after the plenary of February 2008.
The Financial Action Task Force (FATF) is an inter-governmental body decision-making body. It was established in 1989 during the G7 Summit in Paris to develop policies against money laundering. It is a “policy-making body” which works to generate the political will to bring about national legislative and regulatory reforms in money laundering. It has also started dealing with virtual currencies. The FATF Secretariat is located in Paris.”
What is FATF’s Grey List?
The Financial Action Task Force’s “gray list” is composed of countries with a high risk of money laundering and what FATF says could be terrorism financing. Being on the ‘Grey’ List severely restricts a nation’s international borrowing capabilities. The countries on the list are ones which have formally committed to working with the FATF to make the requisite changes to exit the list.
The FATF is made up of 37 member countries. The countries also include the United States, and two regional groups – Gulf Cooperation Council and European Commission.
FATF says Pakistan has not taken complete measures to combat money-laundering and terror financing hence will be kept on the list. Twelve countries are in the grey list include: Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Panama, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
On-site inspection in Oct
FATF said that Pakistan could possibly be removed from the list after an on-site visit. The visit will verify Pakistan’s implementation of reforms on countering and stopping terror-financing mechanisms.
Marcus Pleyer, president of the Financial Action Task Force made the announcement that came as a major blow to Pakistan’s new government. Pakistan’s new regime says it has mostly complied with the FATF’s tasks set for it.
Pleyer said that an onsite inspection is set to be conducted before October 2022 and if Pakistan meets the criteria, an announcement would be made regarding the removal of Pakistan from the list.
According to Al-Jazeera, “Being on Paris-based international watchdog’s “grey list” can scare away investors and creditors, hurting exports, output and consumption. It also can make global banks wary of doing business with a country.”
Pakistan has said that it is complying with the watchdog and is detaining suspects involved in terror financing. ‘Tabadlab’ – a Pakistani think tank says the country has lost $38 billion worth of revenue due to being “grey listed” since 2018.
