Financial Action Task Force:
Pakistan’s efforts to investigate and prosecute leaders of UN-designated terror groups in order to counter terror financing will be assessed during the ongoing meetings of the Financial Action Task Force (FATF) in Paris.
- The multilateral financial watchdog will announce whether Pakistan is to be retained in the grey list, or the list of countries under increased monitoring.
- Experts believe Pakistan is set to be retained in the grey list and that there is little likelihood of the country being included in the “black list”, which would entail harsh economic sanctions and greater scrutiny of financial transactions.
- Only North Korea and Iran are currently included in the black list.
- Pakistan was put on the grey list by the Paris-based FATF in June 2018, and the country has been struggling to come out of it.
- It has now completed 26 of the 27 action items given to it in 2018.
- The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 on the initiative of the G7.
- It is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in various areas.
- The FATF Secretariat is housed at the OECD headquarters in Paris.
- Initially it was established to examine and develop measures to combat money laundering.
- In October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.
- In April 2012, it added efforts to counter the financing of proliferation of weapons of mass destruction.
- The FATF currently comprises 37 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe.
- It also has observers and associate members.
Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.