Pakistan and FATF's grey list
Introduction
FATF stands for Financial Action Task Force. It is an inter-governmental body established in 1989 with its headquarters in Paris
Objectives
FATF was established to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, curtailing terror financing and other related threats to the integrity of the international financial system.
FATF and Pakistan:
FATF has placed Pakistan on the grey list in June 2018 (which means that Pakistan is not doing enough to combat terror financing and money laundering)
Impacts of FATF's grey-listing on Pakistan
- It has affected the international image of Pakistan
- Economic fallout (institutes like IMF, World Bank would not lend us money and if they would impose more stringent conditions)
- Diplomatic isolation (as countries like China and Saudia Arabia have decided not stand with us)
- Decrease in foreign investment
- In case of failure would be placed on blacklist along with Iran and North Korea
Reasons behind Pakistan's enlisting in FATF's grey list
- USA's pressure to promote her interests and to gauge her Afghan policy since the country has already moved out of the list back in 2015.
- Failure of the government in implementing National Action plan thoroughly
- Presence of extremist groups
Current Scenario
A review conference of FATF took place during February 18-22,2019. According to the Secretary of Finance Arif Khan, the FATF was not pleased with the performance of Pakistan. As a result, three more demands were added to existing 15 making the total 18, on which Pakistan has to show progress till May if it wants to avert the blacklist.
