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Pakistan’s economic woes to increase if placed on FATF watch-list for terror funding

Ashok Tuteja | New Delhi |

Pakistan will not only suffer international embarrassment but its economic woes will grow manifold if it is placed on a watch-list of countries considered non-compliant with global anti-terror financing measures at the Financial Action Task Force (FATF) plenary beginning in Paris on Sunday, knowledgeable sources said on Thursday.

The US and its Western allies have tabled a motion at the FATF with a view to placing Pakistan on the watch-list. The FATF maintains grey and blacklists for identifying countries with weak measures to combat money laundering and terror financing.

Sources said the adoption of the motion could give a body blow to the already beleaguered economy of Pakistan. It will increase for Islamabad the cost of doing international transactions and ultimately higher cost of doing business locally.

The watch-dog does not have the powers to impose sanctions on a country found not meeting the required standards. However, its listing can affect international transactions from the country concerned as those would then become subject to greater scrutiny.

Under pressure to act against banned groups, Pakistan has launched a crackdown on seminaries and health facilities run by Mumbai attack mastermind Hafiz Saeed. Islamabad appears to be doing everything it can to give an impression to the international community that it is seriously pursuing its drive to choke funds meant for terrorist networks.

Even as it blames New Delhi for pressuring the US to bring forward the motion at the FATF meet, Islamabad has sent its emissaries to key world capitals, including Moscow, to persuade them to block the US-sponsored motion.

The six-day FATF meeting in Paris will review Islamabad’s attempts to make its legal regime and law-enforcing machinery more effective to check flow of funds to terrorist networks.

Established in 1989, FATF is an inter-governmental organisation promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and combating other related threats to the international financial system.

At the Buenos Aires plenary in November last year, New Delhi, backed by the US and Russia, had succeeded in asking Pakistan to submit a compliance report at the coming Paris meeting on action taken by Islamabad against terror groups like the Lashkar-e-Taiba (LeT) and the Jamaat-ud Dawa (JuD).