KARACHI: Expressing concern over the general “lack of progress by Pakistan to address its terror financing (TF) risks,” the Paris-based Financial Action Task Force (FATF) formally announced on Friday that the country would remain on its grey list until February 2020 and asked Islamabad to swiftly complete its full action plan within the next four months.
The global financial watchdog acknowledged Pakistan’s recent progress in the areas of anti-money laundering and counterterror financing, indicating that these improvements had enabled it to avoid being blacklisted by FATF.
“FATF again expresses serious concerns with the overall lack of progress by Pakistan to address its TF risks, including remaining deficiencies in demonstrating a sufficient understanding of Pakistan’s transnational TF risks, and more broadly, Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction,” FATF said in a statement issued on Friday at the end of its plenary meeting in the French capital.
The FATF representatives from 205 countries, along with officials of various world bodies and international financial institutions, gathered in Paris for a weeklong conference last Sunday. Six days of meetings focused on disrupting the financial flows linked to crime and terrorism and discussing ways of contributing to global safety and security.
The antiterrorism watchdog asked Pakistan to 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 the next Plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdictions to advise their FIs (financial institutions) to give special attention to business relations and transactions with Pakistan,” the inter-governmental organization warned.
“To date, Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan,” it added.
At the October 2019 plenary, Pakistan reiterated its political commitment to completing its action plan and implementing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) reforms.
According to the FATF, all deadlines in the action plan have expired. However, experts say that following the FATF decision, the country has managed to avoid harsh actions against its financial system, particularly banking institutions. In case of further downgrading, they noted, these institutions would have faced tough conditions.
The International Monetary Fund (IMF) had already warned against an adverse FATF verdict that could have risked $6 billion stabilization program.
However, some experts call the FAFT decision a political maneuver to keep Pakistan under pressure.
“Pakistan has done a lot to improve its financial system, particularly related to anti-terrorism, but unfortunately this has been made political and it is linked with the IMF program,” Dr Ashfaque Hassan Khan, member of the Economic Advisory Council (EAC), told Arab News.
“The FATF thinks that Pakistan at some point of time may get out of the IMF program prematurely. Therefore, the sword of the FATF will keep hanging on our head just to prevent the country's premature exit from it,” he commented.
Pakistan escapes terror financing blacklist
Pakistan escapes terror financing blacklist
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- FATF expresses serious concern over “lack of progress” by Pakistan to address its terror financing risks
- Local experts believe the country did its best to improve its financial system but was harshly judged due to political considerations