Pakistan is in gray list since 2018
Pakistan has been on the gray list of FATF based in Paris since June 2018. Pakistan has failed to stop money laundering, which has led to terror financing. To accomplish this, Pakistan was given an action plan by October 2019. Since then, Pakistan was kept in this list for not following the orders of FATF. According to Dawn newspaper, the FATF meeting is to conclude on Friday. The meeting also includes a review of Pakistan.
Trying to meet the target by 2023
Pakistan is aiming to complete the 2021 action plan by the end of January 2023. The FATF acknowledged the progress of a 27-point action plan on the completion of 26 items to Pakistan in October 2021. But Pakistan was placed on an increased watch list for its negligence in investigating and punishing terror financing with top leaders of terrorist groups banned from the United Nations.
According to the report, then FATF President Marcus Pleier had said that Pakistan had to complete two action plans out of a total of 34 items. Now Pakistan has addressed 30 items in a big way. The 2021 Action Plan on Money Laundering by the Asia Pacific Group, a regional partner of the FATF, found a lot of lacunae. The report said that four of the seven items in the new action plan are addressed extensively.
Recently the IMF asked Pakistan to complete the last balance in the 2018 Anti-Money Laundering, Anti-Terrorism Financing Action Plan. It also asked for immediate rectification of the deficiencies in the Asia Pacific Group on Money Laundering Mutual Evaluation Report under the 2021 AML/CFT Action Plan.
By the end of June, the Government has committed to the IMF to review the implementation of AML/CFT controls by financial institutions in relation to the tax waiver program for the construction sector. It has promised to meet the deadline for the implementation of APG’s 2021 action plan.
problems may increase
With Pakistan remaining in the gray list, it is becoming increasingly difficult for Islamabad to access financial aid from the IMF, the World Bank, the Asian Development Bank (ADB) and the European Union. Thus, the problems for the country increase further. Pakistan has so far avoided being included in the blacklist with the help of close allies like China, Turkey and Malaysia.
what is FATF
The FATF was established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system. It is an intergovernmental body. It currently has 39 members, including two regional organizations – the European Commission and the Gulf Cooperation Council. India is also its member. Let us tell you that Iran and North Korea are also included in the list of FATF. Due to this, both these countries have trouble in doing international trade and getting investment from outside.