Interior minister rejects reports of Pakistan’s inclusion on FATF watch list

In this file photo, Ahsan Iqbal Pakistan’s Minister of Planning and Development speaks with a Reuters correspondent during an interview in Islamabad, Pakistan June 12, 2017. (REUTERS)
Updated 23 February 2018
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Interior minister rejects reports of Pakistan’s inclusion on FATF watch list

ISLAMABAD: Pakistan’s Interior Minister Ahsan Iqbal has said in a Twitter message that there had been “no official intimation of a FATF decision yet” and requested that the media not speculate until a statement was released.

It followed reports that the Financial Action Task Force (FATF) had placed Pakistan back on its list of non-compliant countries, days after the country’s Foreign Minister Khawaja Muhammad Asif announced a victory against the US co-sponsored resolution.
Reuters on Friday, citing Indian media and an unnamed non-Indian diplomatic source from one of the FATF countries, reported that the anti-money laundering and terror-financing watchdog had decided Pakistan would be put back on the watch list.
“The decision was taken yesterday,” the diplomat told Reuters.
He added that the financial consequences would not kick in until June, which, in theory, could allow Pakistan wriggle room to solve terrorist-financing issues. “But the odds of that, particularly in an election year, seem slim,” he said.
The Foreign Office rejected Indian media reports of FATF including Pakistan on the “grey list,” Pakistan’s English daily The News reported.
Foreign Office spokesman Dr. Mohammed Faisal said at a press briefing: “So far, the outcome of the ICRG (International Country Risk Guide) /FATF meeting in Paris is awaited.”
“Pakistan has serious concerns over, and objections to, the introduction of this new ‘nomination’ procedure, which is unprecedented and in clear violation of established rules/practices of FATF,” he said. “Most of the concerns raised by the US side regarding deficiencies in our CFT (combating financing of terrorism) and AML (anti-money laundering) regime had already been addressed in 2015 when Pakistan got an exit from the “grey list.”
The resolution to put Pakistan on FATF’s high-risk and non-compliant list has been spearheaded by US with the support of Britain, France and Germany.
Earlier this week, Pakistan’s foreign minister said that there was “no consensus for nominating Pakistan” at the FATF plenary session, which began its six-day meeting on Sunday after members of the regulatory body failed to reach an agreement on placing the country on its grey list.
Officials at the Ministry of Finance and Ministry of Foreign Affairs declined to comment to Arab News until the conclusion of the Paris meeting.
A three-month reprieve was extended by FATF to Pakistan and its Asian Pacific Group subsidiary is scheduled to review “another report” for consideration.
Senior economist Dr. Syed Nazre Hyder described the potential impact if Pakistan was included on the watch list as “near lethal.”
The cost to banks’ customers would rise, investors in the international capital market would request a much higher rate of return from Pakistan and multilateral financing organizations would add risk premiums on any money borrowed, he said.
Financial experts fear that the International Monetary Fund may also reject any loan extension Pakistan might request as a bailout to curb its widening trade deficit, or offer a new deal with stricter guidelines dictated by the US and EU.
“Pakistan will need a loan to pay off its debt burden,” Hyder told Arab News. “If it’s included on the list, the country will face a serious challenge sourcing funds for repayment, leading to the possibility of default. This would cripple Pakistan economically.”


UK firms step up preparations for a ‘no-deal’ Brexit as PM Theresa May meets with EU leaders

Updated 21 March 2019
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UK firms step up preparations for a ‘no-deal’ Brexit as PM Theresa May meets with EU leaders

  • May is meeting EU leaders in Brussels on Thursday in attempt to get support for Brexit delay
  • The Bank of England warned in November that the British economy could shrink by a massive 8 percent

LONDON: UK companies have ratcheted up their preparations for a disorderly “no-deal” Brexit as best they can over the past couple of months, the Bank of England said on Thursday.
With the prospect of a chaotic Brexit potentially eight days away, a survey by the central bank’s agents showed that around 80 percent of companies “judged themselves ready” for such a scenario, in which the country crashes out of the European Union with no deal and no transition to new trading arrangements with the bloc. That’s up from around 50 percent in an equivalent survey in January.
For decades, trading with the rest of the EU has been seamless. A disorderly Brexit could see the return of tariffs and other restrictions on trade with the EU, Britain’s main export destination.
To prepare, some firms have moved jobs and operations to the EU to continue to benefit from its seamless trade. Many have had to learn how to file customs declarations and adjust labels on goods. Exporters of animals are learning about health checks they will need to comply with.
According to the bank’s survey, however, many of those companies preparing for a “no-deal” Brexit said “there were limits to the degree of readiness that was feasible in the face of the range of possible outcomes in that scenario.”
There’s only so much companies can do, for example, to prepare for new tariffs and exchange rate movements.

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Britain appears headed for a “no-deal” Brexit on March 29 if Prime Minister Theresa May fails to win parliamentary support for her withdrawal agreement with the EU.
She is meeting EU leaders in Brussels on Thursday in an attempt to get support for a delay to the country’s departure date to June 30. EU leaders have said a short extension would have to be conditional on her Brexit plan getting parliamentary backing and have indicated they would only be willing to back a delay to May 22, the day before elections to the European Parliament. After two heavy rejections in parliament, there are doubts as to whether she will be able to get parliamentary approval. What would happen next is uncertain.
European leaders, including those from France and Luxembourg, have said any extension will be granted dependent on May's deal passing a third parliamentary vote.
The Bank of England warned in November that the British economy could shrink by a massive 8 percent within months, though Governor Mark Carney has indicated the recession will be less savage, partly because of heightened preparedness.
According to the minutes of the latest meeting of the bank’s nine-member Monetary Policy Committee, at which the main interest rate was kept at 0.75 percent, rate-setters warned “Brexit uncertainties would continue to affect economic activity looking ahead, most notably business investment.”
Brexit uncertainty has dogged the British economy for nearly three years. In 2018, the economy grew by 1.4 percent, its lowest rate since 2012, even during what was then a global upswing. Business investment was down 3.7 percent in the fourth quarter from the year before.
“Business investment had now fallen in each of the past four quarters as uncertainties relating to Brexit had intensified,” the rate-setters said.
The survey showed uncertainty was likely to remain for months, even years, as Britain works out its long-term relationship with the EU. It said around 60 percent of UK firms in February said Brexit was one of their top three uncertainties, compared with 40 percent just after the June 2016 Brexit referendum.
Around 40 percent of firms expect the uncertainty to be resolved only by the end of 2019 and 20 percent anticipate it persisting into 2021 or beyond.