Pakistan avoids FATF blacklisting, gets time till February 2020 to curb terror financing

FATF had on Tuesday indicated that it has decided "in principle" to keep Pakistan on its grey list till February 2020 and directed the country to take "extra measures" for the "complete elimination" of terror financing and money laundering.

Pakistan avoids FATF blacklisting, gets time till February 2020 to curb terror financing

Islamabad: Pakistan on Friday avoided being blacklisted by the Paris-based Financial Action Task Force's (FATF) as it was given time till February 2020 to do more to curb terror financing. However, the country was severely indicted for failing to deliver on most of its 27 targets and not putting a stop to terror financing. 

Announcing its decision, the FATF said, ''We strongly urge Pakistan to swiftly complete its full action plan by February 2020 otherwise should significant and sustainable progress not be made across the full range of its action plan by next Plenary, the FATF will take action including urging members to advise their financial institutions to give special attention to business relations/transactions with Pakistan.''

The FATF decision has come as a jolt to nations like India and the US, which wanted Pakistan blacklisted.

Interestingly, the FATF had on Tuesday indicated that it has decided "in principle" to keep Pakistan on its grey list till February 2020 and directed the country to take "extra measures" for the "complete elimination" of terror financing and money laundering.

During its previous meeting, the terror financing watchdog observed that Islamabad needed to take further steps on the two parameters in these four months.

The FATF had linked the blacklisting of Pakistan with "unsatisfactory steps to curb money laundering and terror financing".

However, despite reports that Pakistan has not been fully compliant on most parameters, it was being speculated that Pakistan will manage to escape the FATF blacklisting.

Of the 39 voting members of the FATF, at least four are known Pakistani allies. And, above all, China, which is an all-weather ally of Pakistan, currently chairs the FATF. 

China, Turkey and Malaysia had earlier appreciated the steps undertaken by Pakistan to curb terror financing on its soil and noted that further time should be given to the country to implement the other measures.

The crucial plenary meeting of the Paris-based watchdog began following the two-day 'informal' meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping in the coastal town of Mamallapuram in South India.

In case, the cash-strapped nation continues to remain in the FATF grey list, it would become very difficult for the Imran Khan government to get financial aid from global money lenders, including the International Monetary Fund (IMF) and World Bank, further making a more precarious situation for its plunging economy.

Representatives from 206 countries and jurisdictions around the world began a meeting for the FATF Week in the French capital earlier this week. Six days of meeting were focused on disrupting financial flows linked to crime and terrorism and discuss ways to contribute to global security. 

Pakistan was placed on the Grey List by the watchdog in June 2018 and was given 15 months to complete implementation of a 27-point action plan, failing which it be placed in the Black List.

The Asia Pacific Group (APG) of the FATF had recently made public its report on money-laundering and terror-financing in Pakistan. The FATF-APG report had 10 parameters for 'Effectiveness and Technical Compliance Ratings' and 40 for 'Technical Compliance Ratings'.

A Pakistani delegation led by Minister for Economic Affairs Hammad Azhar had told the meeting that the country has made positive progress in 20 out of 27 points. The FATF expressed satisfaction on the measures taken by Pakistan and its progress in various areas.