|| Money Laundering & Terror Funding || Why Pakistan has remained in FATF Grey list????????

Why Pakistan has remained in FATF Grey list

A Temporary decision was taken by the ” Financial Action Task Force ” against Pakistan in case of Money Laundering and funding in terrorism and now the question arises Why Pakistan has remained in FATF Grey list and will it give some positive response against terrorism?

 

Recent News;

 

  • Financial Action Task Force has continued Pakistan in Greylist.

 

  • It has confirmed by FATF that Pakistan did not follow the restrictions imposed by FATF against terror funding.

 

  • According to FATF, Pakistan is failed to curb funding to terrorist groups like Lashkar-E-Taiba, Jaish-E-Mohammed and others.

 

  • Pakistan made another organisation i.e ” The Resistance Front “, which started funding terrorist groups instead of restrictions.

 

Proof;

 

 

What is the Financial Action Task Force ( FATF )?

 

Financial Action Task Force is an intergovernmental organisation founded in 1989 on the initiative of the G-7 to develop policies to combat money laundering.

 

In 2001, its mandate was expanded to include terrorism financing. Since 2000, FATF has maintained the FATF BlacklistĀ  ( formally called the “ Call for Action ” ) and the FATF Greylist ( formally called the ” Other monitored jurisdictions “ ).

 

Objectives;

 

  • Its objectives are to maintain standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial management.

 

  • In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financing system from misuse.

 

FATF Member Countries;

 

  • Argentina.
  • Austria.
  • Australia.
  • Brazil.
  • Belgium.
  • China.
  • Canada.
  • Denmark.
  • European Commission.
  • Finland.
  • France.
  • Greece.
  • Germany.
  • Gulf Cooperation Council.
  • Hong Kong China.
  • Iceland.
  • India.
  • Ireland.
  • Israel.
  • Italy.
  • Japan.
  • The Republic of Korea.
  • Luxembourg.
  • Malaysia.
  • Mexico.
  • The Netherlands.
  • New Zealand.
  • Norway.
  • Portugal.
  • Russian Federation.
  • Saudi Arabia.
  • Singapore.
  • South Africa.
  • Spain.
  • Sweden.
  • Switzerland.
  • Turkey.
  • The United Kingdom.
  • The United States of America.

 

Point to be noted;

The Financial Action Task Force has only one observer member i.e Indonesia.

 

 

Pakistan in Greylist;

 

Pakistan was placed on the greylist by the FinancialĀ  Action Task Force in June 2018 and was given a 27-point action plan to complete it.

 

The FATF continuing Pakistan in the Greylist means its downgrading by IMF, World Bank, ADB, EU and also a reduction in risk rating by Moody’s, S&P and Fitch.

 

The Financial Action Task force has given a time period of 4 months to Pakistan to overcome all its strategies of terror funding. Otherwise, the FATF will put Pakistan into Blacklist.

 

Point to be noted;

Pakistan did not follow the 27 Action Plan by FATF.

 

Also Read; 88 Terrorists in Pakistan are warned by FATF

 

Why Pakistan has remained in FATF Grey list?

 

 

  • According to the FATF, Pakistan has made progress across all action plan items and has now largely addressed 21 of 27 Action items.

 

  • As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by Feb 2021.

 

  • The FATF gives a statement on the decision to keep Pakistan in the list of ” Jurisdictions under increased monitoring ” or greylist.

 

  • Lack of action against the charitable organisation linked to the terror group banned by the UNSC and delays in the prosecution of banned individuals and entities like Lashkar-E-Taiba chief Hafiz Sayeed and LeT operations Chief Zaki-Ur-Rehman Lakhvi as well as Jaish-E-Mohammad chief Masood Azhar.

 

  • Pakistan was found non-compliant in cracking down on terror financing through narcotics and smuggling of mining products including precious stones.

 

  • The FATF process also showed concern about the 4000 names that were on Pakistan’s Schedule 4 list under the Anti-Terrorism Act up to January but went missing in September 2020.

 

Why Turkey is Supporting Pakistan in FATF?

 

 

At the FATF Plenary, Turkey proposed that the members should consider Pakistan’s good work and instead of waiting for the completion of the remaining six of the 27 parameters, a FATF on-site team should visit Pakistan to finalise its assessment.

 

It was not supported by even China, Malaysia and Saudi Arabia. The United States, Britain, France and Germany were not satisfied with Islamabad’s commitment to take strong actions against the terror groups operating from its soil.

 

Point to be noted;

Saudi Arabia and China are not in support with Pakistan in FATF.

 

Harms of Greylist in FATF;

 

  • Trade would be restricted.

 

  • The country which is in greylist of FATF is under surveillance at every corner.

 

  • The ratings of the country in IMF, World Bank, ADB etc would be decreased.

 

  • Actions are taken by the country itself on the advice of FATF.

 

  • FATF gives a time period to the impeached country to follow the FATF’s advice.

 

Harms of Blacklist in FATF;

 

  • Trade would be banned completely.

 

  • IMF, World Bank, ADB etc, would not provide loans to the impeached country at any risk.

 

  • Bilateral agreements would be banned automatically with other countries.

 

  • The United Nations would apply Strict Sanctions on the country.

 

  • The country which stood has strong relations with the impeached country by knowing the sanctions imposed on the convicted country by FATF, would come under FATF surveillance.

 

Conclusion;

 

According to our Analysis, we have concluded that Pakistan will definitely be blacklisted by the FATF because Pakistan did not follow the advice of FATF on terror funding and it will not follow in future as well. So, there will be maximum chances of Pakistan’s backlist.

 

 

 

 

 

 

 

 

 

 

 

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|| Money Laundering & Terror Funding || Why Pakistan has remained in FATF Grey list????????
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|| Money Laundering & Terror Funding || Why Pakistan has remained in FATF Grey list????????
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" Financial Action Task Force " against Pakistan in case of Money Laundering and funding in terrorism and now the question arises Why Pakistan has remained in FATF Grey list and will it give some positive response against terrorism
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