Global Financial Action Task Force's (FATF) regional sub-group APG (Asia-Pacific Group) has blacklisted Pakistan for non-compliance of anti-money laundering and combating terror financing efforts. The decision was taken in a review meeting in Canberra, Australia, on August 22-23. The Pakistani delegation was led by Dr Reza Baqir, the Governor State Bank of Pakistan.
Despite Pakistan's contentions on improving its grading on nearly 50 parameters, Pakistan failed to garner support from the 41-member plenary. The body placed Pakistan on 'Enhanced Expedited Follow-Up List' (blacklist) for failing to meet the requirements.
Of total 40 parameters set by the regional grouping, Pakistan failed on around 36, while it passed on only one of the total 11 'effectiveness' parameters. Pakistan had submitted its compliance report comprising its 27-point action plan to the Financial Action Task Force (FATF). The report could not pass the scrutiny of the APG, which found Islamabad lacking on several fronts.
The current blacklisting of Pakistan would make its case much more difficult during FAFT review in October. Pakistan has to show compliance on the FATF action plan in the next plenary session, which will do the final review in October.
Meanwhile, India Today, citing government sources, said Pakistan, despite failing on 36 of the 40 parameters of compliance, was giving a different picture of the APG analysis. It has even said that its name would be removed from the FATF 'grey list', saying there's a 'positive outcome for Pakistan's grey-listing status'. It has said major world powers, including China, the UK, the US, and Russia, had been intensely lobbied, insisting that "they are positive to take Pakistan off the grey list".
Pakistan was grey listed by FATF in June 2018 after much pressure from countries like the US, France, Germany, the UK, which had supported India. It said Pakistan had failed to complete its action plan on terror financing, warning Islamabad to meet its commitment by October or face action, which could possibly lead to the country's blacklisting.
Countries with domestic laws that are weak to tackle money laundering and terrorism financing are included in the grey list. The FATF currently has 36 members with voting powers and two regional organisations, representing most of the major financial centres in all parts of the globe.
What is FATF
The Financial Action Task Force is an inter-governmental body, which was established in 1989. Its task is to ensure effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system. A policy-making body, FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
FATF also monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally.
Edited by Manoj Sharma