FATF Retains Pakistan In Grey List:
The Financial Action Task Force (FATF) has retained Pakistan on its ‘greylist’ or ‘increased monitoring list’. The FATF included the United Arab Emirates (UAE), with which India signed a free trade agreement in February 2021.
- There are 17 countries on the grey list of the FATF.
- Zimbabwe has been excluded from the list after a review found it compliant on all parameters.
- FATF decided against existing Pakistan from the category despite the country meeting 32 out of 34 action points.
- It noted that Pakistan had completed 26 of the 27 action items in its 2018 action plan of the FATF and of the seven action items of the 2021 action plan of the FATF’s Asia Pacific Group on Money Laundering (APG).
- In response to additional deficiencies later identified in Pakistan’s 2019 APG Mutual Evaluation Report in June 2021, Pakistan provided further high-level commitment to address these strategic deficiencies pursuant to a new action plan that primarily focuses on combating money laundering.
- The country had two concurrent action plans with a total of 34 action points, of which 30 had either been fully or largely addressed to curb money laundering and terror financing.
- The FATF encouraged Pakistan to continue making progress to address, as soon as possible, the one remaining item by continuing to demonstrate that terror financing investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups.
- Since June 2018 – when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its anti-money laundering/combating the financing of terrorism (AML/CFT) regime and to address its strategic counter–terrorist financing–related deficiencies — its continued political commitment had led to significant progress across a comprehensive CFT action plan.
- The FATF had issued the 27-point action plan after placing Pakistan on the ‘Grey List’ in June 2018. The action plan pertains to curbing money laundering and terror financing.
- Pakistan was first put on the list in 2008, removed in 2009 and then again remained under increased monitoring from 2012 to 2015.
- Pakistan’s inclusion in the grey list has adversely impacted that country’s prospects of obtaining financial assistance from world bodies such as the International Monetary Fund, World Bank, and Asia Development Bank.