FATF to Keep Pak on ‘Grey List’ Till June, Warns on Terror-Funding

FATF warned the country that stern action will be taken if it fails to check the flow of money to terror groups.

3 min read
File photo of Pakistan Prime Minister Imran Khan. 

Global terror financing watchdog Financial Action Task Force (FATF) on Friday, 21 February, decided to keep Pakistan on its Grey List till June 2020, due to lack of action against terror groups operating on its soil, reported PTI quoting sources.

FATF warned the country that stern action will be taken if it fails to check the flow of money to terror groups like the LeT and the JeM, sources said.

The decision was taken at the meeting of the FATF's International Co-operation Review Group (ICRG), held at the ongoing Paris plenary.

“The ICRG meeting, sub group of the FATF, has recommended that Pakistan be retained in the ‘Grey List’. A final decision will be taken on Friday when the FATF takes up issues concerning Pakistan,” PTI quoted a source as saying.

“FATF again expresses concerns given Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF (terror financing) risks emanating from the jurisdiction. FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020. Otherwise, significant and sustainable progress especially in prosecuting and penalising TF not be made by the next Plenary,” the body said in a statement.

“FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their FIs (financial institutions) to give special attention to business relations and transactions with Pakistan,” the statement further said.

Pakistan had submitted a report on its action regarding the implementation of the watchdog’s plan of action to combat terrorism.

The FATF in October last year decided to keep Pakistan on its grey list for its failure to curb funnelling of funds to terror groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammad (JeM), according to PTI.

The body had warned that Islamabad would be put on the blacklist if it did not comply with the remaining 22 out of 27 points related to anti-money laundering and counter-terrorist financing.

China Commends Pakistan’s Efforts

China on Friday praised close-ally Pakistan's "enormous efforts" in combating terror financing and played down reports that it backed India and other countries against Islamabad at the just- concluded FATF meeting, PTI reported.

Foreign Ministry spokesman Geng Shuang told an online media briefing in Beijing that the Financial Action Task Force meeting has decided to give Pakistan more time to implement its action plan on money laundering and terrorist financing.

"China's position on the relevant issue remains unchanged. Pakistan has made enormous efforts in improving its counter-terror financing system, which has been recognised by the vast majority of the FATF members at its latest plenary meeting concluded on February 20 in Paris," he said, according to PTI.

China said it stands ready to work with relevant parties to offer more assistance to Pakistan in its efforts against terrorism.

Pakistan’s Attempts to Please FATF

The FATF meeting is being held a week after an anti-terrorism court in Pakistan sentenced Hafiz Saeed, the mastermind of the 2008 Mumbai attack and founder of LeT, to 11 years in two terror financing cases.

The Pakistani court’s judgment came ostensibly to please the FATF and western countries so that the country can exit the grey list.

India has been maintaining that Pakistan extends regular support to terror groups like LeT, JeM and Hizbul Mujahideen, whose prime target is India, and has urged FATF to take action against Islamabad.

Saeed, a UN designated terrorist on whom the US has placed a $10 million bounty, was arrested on 17 July 2019 in the terror financing cases.

Pakistan had also recently informed FATF that JeM founder Masood Azhar and his family are “missing”.

It has claimed that there were only 16 UN designated terrorists in Pakistan, of which “seven are dead.”

Out of the nine who are alive, seven had applied to the UN for exemption from financial and travel restrictions.

How Does Being on the Grey List Impact Pakistan?

Pakistan needs 12 votes out of 39 to exit the grey list and move to white list. To avoid the black list, it needs support of three countries, according to PTI.

In the last month's FATF meeting in Beijing, Pakistan had received support of Malaysia and Turkey besides FATF current chair China.

If Pakistan continues with the grey list, it will be difficult for the country to get financial aid from the IMF, World Bank, ADB and the European Union, thus further enhancing problems for the nation which is in a precarious financial situation.

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.

The FATF currently has 39 members including two regional organisations - the European Commission and Gulf Cooperation Council. India is a member of the FATF consultations and its Asia Pacific Group.

(With inputs from ANI & PTI.)

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