Pakistan remains on FATF 'grey list' till June, asked to address 'strategic deficiencies'

Paris (France): Global terror financing watchdog, Financial Action Task Force (FATF) on Thursday retained Pakistan on its "grey list" till June after concluding that Islamabad failed to address its strategically important deficiencies, to fully implement the 27 point action plan that the watchdog had drawn up for Pakistan.

The global watchdog had in October last year asked Pakistan, which has been on the FATF grey list over issues related to terror financing, to deliver on all 27 points by this February.

"To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items. As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan before June 2021," FATF said in a statement at the outcome of a plenary that began on Monday.

FATF said Pakistan should continue to work on implementing the three remaining items in its action plan to address its strategically important deficiencies, including "demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists, specifically those acting for or on their behalf."

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

Pakistan's continuation on the "grey" list means that it will not get any respite in trying to access finances in the form of investments and aid from various international bodies including International Monetary Fund (IMF). The latest decision will now further exacerbate its problems given its perilous financial situation.

Earlier, Dawn had reported that some European countries, especially the host France, had recommended to FATF to continue to keep Pakistan on the "grey list" and had taken the position that not all points had been fully implemented by Islamabad.

Pakistan has been on the FATF's grey list since June 2018 and the government was given a final warning in February 2020 to complete the 27 action points by June in the same year.

Pakistan is facing the difficult task of clearing its name from the FATF grey list. As things stand, Islamabad is finding it difficult to shield terror perpetrators and implement the FATF action plan at the same time.

A research paper by an Islamabad-based think tank recently revealed that Pakistan sustained a total of USD 38 billion in economic losses due to FATF' decision to thrice place the country on its grey list since 2008.

The research paper titled "Bearing the cost of global politics -- the impact of FATF grey-listing on Pakistan's economy" states that that grey-listing events spanning from 2008 to 2019, may have resulted in total GDP losses worth USD 38 billion, The Express Tribune reported.

The report published by Tabadlab said the losses are worked out on the basis of a decrease in consumption expenditures, foreign direct investment and exports.