Pakistan has managed to avoid being pushed into the ‘blacklist’ of the Financial Action Task Force (FATF) by garnering the support of at least three member states of the global financial watchdog. However, Pakistan is still not out of the woods.
The temporary breather for Pakistan came as a result of desperate efforts made by the Imran Khan government to garner the support of FATF member countries to counter the looming threat of a ‘blacklist’ push from the existing ‘grey’.
Pakistan was able to win the support of Turkey, China, and Malaysia, which helped it avoid being placed on the blacklist at the global money laundering watchdog’s meeting in Orlando in the US, the Pakistani media said.
According to the FATF charter, the support of at least three member states is essential to avoid the blacklisting. The FATF is likely to formally announce its decision on Pakistan in October.
“There is no imminent threat, which is a good development for Pakistan. The support of Turkey, China and Malaysia has been the saviour this time,” a Pakistan government official was quoted as saying.
Islamabad has been on the global money laundering and terror financing watchdog FATF ‘grey list’ since June 2018 as it got placed in the list of terrorist financing and money laundering risks after thorough assessment of the Asia Pacific Group (APG) of the country’s security mechanism and its financial systems.
Currently, India, the co-chair of the joint group of FATF and the Asia Pacific Group (APG), along with the United States and United Kingdom, has been campaigning to ensure Islamabad ends up in FATF’s ‘blacklist’, claiming that the country has failed to meet international standards in combating financial crimes and terror financing.
Pakistan has not been able to implement the action plan, which was assigned to it by the APG and FATF, deadline of which ended in January 2019, but was given leverage till May 2019.
Staying in the ‘grey’ list means Pakistan will find it difficult to source foreign investments. Last month, Islamabad negotiated a new $6 billion loan from the IMF to bail itself out of the current economic crisis.