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  4. FATF retains Pakistan in Grey List with 4-month ultimatum. What it means

FATF retains Pakistan in Grey List with 4-month ultimatum. What it means

​Financial Action Task Force (FATF), the global terror financing and money laundering watchog, has retained Pakistan on the Grey List with an ultimatum of four months. The FATF Plenary in Paris today noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba and Jaish-e-Mohammad.

India TV News Desk India TV News Desk
New Delhi Updated on: October 23, 2019 10:53 IST
​Financial Action Task Force (FATF), the global terror financing and money laundering watchog, has r

​Financial Action Task Force (FATF), the global terror financing and money laundering watchog, has retained Pakistan on the Grey List with an ultimatum of four months. The FATF Plenary in Paris today noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba and Jaish-e-Mohammad.

Financial Action Task Force (FATF), the global terror financing and money laundering watchog, has retained Pakistan on the Grey List with an ultimatum of four months. The FATF Plenary in Paris today noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba and Jaish-e-Mohammad. 

"It was again decided by consensus that FATF would retain Pakistan on the Grey List and warn Pakistan that if it did not complete its full Action Plan and show significant and sustainable progress action will be taken," an official privy to the development said. 

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. 

What it means:

With FATF's decision, the Paris based watchdog has given notice to the global financial institutions that they need to prepare to red flag the jurisdiction and ready their systems for the eventuality in February 2020.

But what may happen further?

If Pakistan continues with the 'Grey List' or put in 'Dark Grey' list, it would be very difficult for the country to get financial aid from the IMD, the World Bank and the European Union, making its financial condition more precarious. Pakistan has been warned if it did not complete its full action plan and show significant and sustainable progress action will be taken. The action could include calling upon global financial institutions to five special attention to business relations and transactions with Pakistan. This language is the same as used for Iran, which is already on the Black List.

So what are the chances for Pakistan now?

Chances of Pakistan exiting the Grey List in the next few years are now reduced to nil and possibility of a formal Black Listing in February 2020 is now highly probable. 

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.

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. 

 
 

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