The all-important plenary meeting of the Financial Action Task Force (FATF) will start in Paris today to decide whether Pakistan stays in or out of the ‘grey list’ it is currently placed on.
The FATF, an international watchdog that works to counter money laundering, may extend the duration of the ‘grey list’ it has placed Pakistan on for another six months to ensure the country gets enough time to adopt legislative measures to restructure its banking system in line with the best international practices.
If Islamabad comes out of the ‘grey list’, it will be easy for the country to receive financial aid from international and multinational lenders such as the International Monetary Fund, World Bank, Asian Development Bank and the European Union on easy terms and conditions.
Pakistan was placed on the ‘grey list’ by the Paris-based watchdog in June 2018 and was given a plan of action to complete by October 2019 or face the risk of being placed on the watchdog’s blacklist, along with Iran and North Korea.
In its October meeting, the FATF had noted that Pakistan had addressed only five out of the 27 tasks given to it in controlling funding to terror groups. The intergovernmental organisation had urged Pakistan to complete its full action plan by February 2020.
In the FATF review meeting, held in Beijing between January 21-23, Pakistan successfully defended it’s compliance report about actions it had taken in line with FATF recommendations.
“The State Bank of Pakistan imposed penalties on defaulting banks and the statutory sanctions regime was implemented. The mandatory currency declaration scheme was also implemented at all airports of the country,” the FATF was informed.
The global terror-financing watchdog was also informed that under the new reforms, madrassas were granted the status of schools, where students would now be awarded matriculation and intermediate education certificates.
Just days before the FATF meeting, Pakistan had sentenced Jamat-ud-Dawa (JuD) chief Hafiz Saeed to 11 years in two terror financing cases. The United States had welcomed the conviction of Saeed and said that his sentencing was an important step forward for Pakistan in meeting its international commitments to combat terror financing and holding the LeT accountable for its crimes.
Pakistan is expecting that the FATF may grant another relaxation to the country, probably up to June or September 2020, in its upcoming plenary review meeting, as the February deadline is too short a period for Pakistan to comply with all remaining 22 points of the action plan.
Pakistan has so far successfully managed to avoid the blacklist due to diplomatic support from China, Turkey, Malaysia, Saudi Arabia and Middle Eastern countries. Pakistan requires just three votes out of a total of 39 members of the FATF forum to avoid falling into the blacklist.