Pakistan to remain on FATF grey list till June 2021, asked to deliver 27-point action plan

 Pakistan has been on the grey list by FATF since June 2018. The ruling government was given a final warning in February 2020 to complete the 27 action points by June 2020.

The Financial Action Task Force, a global terror financing watchdog, on February 25, 2021, decided to retain Pakistan on its grey list till June 2021.

The decision was taken after the conclusion that Islamabad has failed to address its strategically important deficiencies, for implementing the 27-point action plan that the watchdog had drawn up for Pakistan.

In October 2020 the global terror financing watchdog, FATF, had asked Pakistan which has been on its grey list over issues related to terror financing, to deliver all 27 points by February 2021.

The decision came on the last day of the FATF plenary, where the partner organisations, including IMF, UN, and World Bank, and governments around the world discussed terror financing issues and key money laundering.

FATF directs Pakistan to complete the action plan:

In an official statement, the FATF mentioned that to date, Pakistan has made progress around all action plan items and has largely addressed 24 of the 27 action items.

As the deadlines of all the action plans have expired, the agency urges Pakistan to complete its action plan before June 2021.

The terror financing watchdog further mentioned that Pakistan must continue to work on implementing the 3 remaining items in its plan for addressing the strategically important deficiencies, including the demonstration of effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists, specifically those who have been acting for or on their behalf.

What does the continuation on the grey list mean for Pakistan?

The continuation of Pakistan on the grey list of FATF means that the country will not get any respite in accessing finances in the forms of aid and investment from the international bodies. The latest decision by FATF will further extend its problems given the country’s critical financial situation.

Global recommendation to keep Pakistan on the grey list:

Some of the European countries, especially France, had recommended to the terror financing watchdog to continue to keep Pakistan on the grey list. The European country had also taken the position that not all the points have been fully implemented by Islamabad.

Pakistan has been on the grey list by FATF since June 2018. The ruling government was given a final warning in February 2020 to complete the 27 action points by June 2020.

Pakistan faces difficulty in clearing its name:

Pakistan has been facing the difficult task of clearing its name from the grey list as the country is finding it difficult to implement the FATF action plan and shield the terror perpetrators at the same time.

The country has sustained an economic loss of a total of USD 38 billion because of the FATF’s decision of placing the country on the grey list three times since 2018. The grey list events from 2018 to 2019 may have caused the economic loss. The losses are identified on the basis of a decrease in foreign direct investment, consumption expenditures, and exports.