The Financial Action Task Force (FATF) has praised Pakistan for making progress in combatting terrorism financing but nonetheless kept it on its ‘grey list.’
The global watchdog, which monitors money laundering and terrorism financing activities, said on Friday that it would make a decision on removing Pakistan from the list only after verifying Islamabad’s progress during an upcoming site visit by FATF experts.
“Pakistan’s continued political commitment to combating both terrorist financing and money laundering has led to significant progress,” the watchdog said in a release. It noted that Pakistan has demonstrated that investigations into terrorism financing can lead to the prosecution of senior leaders and commanders of United Nations-designated terrorist groups.
Completion of FATF AML /CFT action plans by Pak is a great achievement. A monumental effort paving way 4 whitelisting. “Core cell @ GHQ which steered the national effort & civil - military team which synergised implementation of action plan made it possible, making Pak proud”COAS
— DG ISPR (@OfficialDGISPR) June 17, 2022
In April, a Pakistani court sentenced Lashkar-e-Taiba (LeT) founder Hafeez Saeed to 31 years in prison for two terrorism financing cases. LeT, designated as a terrorist group by India and the United States, was responsible for the 2008 Mumbai attacks.
Furthermore, the FATF noted that there is a “positive upwards trend” in the number of money laundering investigations and prosecutions being pursued in the country. In this respect, the FATF said that “Pakistan has substantially completed its two action plans” and as a result, the agency will conduct an on-site verification of whether Islamabad’s implementation of anti-money laundering and counterterrorism financing reforms have begun and that the “necessary political commitment remains in place to sustain implementation and improvement in the future.”
“Pakistan is not being removed from the grey list today. The country will be removed from the list if it successfully passes the onsite visit,” FATF President Marcus Pleyer said.
I constituted a FATF Coordination Committee headed by key minister Hammad Azhar. The committee had representation from all govt departments & security agencies relevant to our FATF action plan. The officers worked day & night in the first instance to avoid blacklisting.
— Imran Khan (@ImranKhanPTI) June 17, 2022
It noted that it will conduct the on-site visit at the earliest date possible.
Despite keeping Pakistan on the grey list, the FATF’s statement that the country has made progress in combatting terrorism financing and money laundering has raised hopes in Islamabad that the country could be removed from the list for the first time since 2018.
Being put on the list can scare away investors and creditors, hurt exports, and make global banks cautious of doing business with the country.
— Hina R Khar (@HinaRKhar) June 17, 2022
Congrats Pak! FATF declares both Action Plans complete. Intl community has unanimously ack our efforts. Our success is the result of 4 yrs of challenging journey. Pak reaffirms resolve to continue the momentum and give our economy a boost. Well done Pak Team FATF. Pak Zindabad!
— Hina R Khar (@HinaRKhar) June 17, 2022
In this respect, the FATF’s most recent report was hailed by Prime Minister Shehbaz Sharif, who commended Pakistan’s foreign ministry for spearheading efforts to ensure that the country’s efforts are recognised by the watchdog. Sharif said the FATF report was a “recognition of the restoration of the international reputation of Pakistan.”
Foreign Minister Bilawal Bhutto Zardari, too, welcomed the FATF’s recognition of the progress made by his country and reaffirmed his commitment to continue implementing steps to combat terrorism financing and money laundering. “I am certain that this good news from FATF will restore confidence in Pakistan’s economy and act as a catalyst for sustained growth and development,” he said.
He also noted that Pakistan is looking forward to the organisation’s on-site visit and hoped that it would result in his country’s removal from the grey list. He also thanked Pakistan’s FATF team for their “hard work and dedicated efforts” to ensure that the watchdog released a positive report. “This was the result of concerted national efforts and complete harmony of interests by all stakeholders,” Zardari said.
“On FATF, imported government should apologise to Pakistan for the way they behaved during the legislation!”-@ShireenMazari1 #مہنگائی_نامنظور pic.twitter.com/yFT8Mvivuc
— PTI (@PTIofficial) June 19, 2022
Minister of State for Foreign Affairs Hina Rabbani Khar said she is positive that Pakistan will be removed from the list but noted that challenges still lie ahead. “It’s too early to celebrate because I genuinely believe that you can’t prejudge anything. We have an on-site visit, but we have started the process,” she cautioned.
Khar also stressed that Pakistan will “never again” repeat the mistakes in its previous response to terrorism. “The successful completion of the FATF action plan and its formal endorsement by [the FATF] means that Pakistan is one step away from exiting the grey list,” she said, adding, “It marks the beginning of the end process that will eventually culminate in the exit of Pakistan from the FATF’s grey list, hopefully forever.”
Pakistan was put on FATF gray list in early 2018, when PMLN govt was in power. FATF’s evaluation of Pakistan’s efforts to complete its action plan for gray list removal mainly covered period when PTI was in power. So FATF decision today will be based on what was done in PTI era.
— Michael Kugelman (@MichaelKugelman) June 17, 2022
According to the FATF, when a country is placed on the grey list, “it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring.” Being put on the list can scare away investors and creditors, hurt exports, and make global banks cautious of doing business with the country.
The FATF was founded in 1989 as part of a G7 initiative to combat money laundering and later included terrorism financing within its ambit. It has listed 23 countries in its grey list, including Turkey, Jordan, and Pakistan. It also maintains a blacklist of “high-risk jurisdictions” and non-cooperative countries. Currently, only Iran and North Korea are blacklisted.
Pakistan first was put on the “grey list” in June 2018, after India, supported by the United States (US), the United Kingdom (UK), and other European countries, highlighted “strategic deficiencies” in Pakistan’s handling of the FATF’s Anti Money Laundering/Countering the Financing of Terrorism regime.