Pakistan has to deliver on the action plan given by FATF, failing which FATF may blacklist Pak in June 2020
The Paris based Financial Action Task Force (FATF), has announced that Pakistan will stay in the ‘grey list’ for not complying with the 27-point action plan of FATF.
The decision was made during the FATF’s plenary. Pakistan was able to secure a narrow escape from getting ‘blacklisted’ because of its close friend, People’s Republic of China. Besides, Islamic Republic of Turkey and Malaysia also supported Pakistan. The Pakistani delegation was led by Federal Minister of Economic Affairs – Hammad Azhar.
Most importantly, if Pakistan fails to deliver on the action plan, FATF may blacklist it in June 2020. FATF has warned that it could call on its members, urging all jurisdiction to advise their financial institutions to give special attention to business relations and transactions with Pakistan.
Speaking on Pakistan’s grey-listing, the 28th Chief of the Army Staff of India –General Manoj Mukund Naravane said, “China has also realised that they cannot back their all-weather friend (Pakistan) all the time.”
He further added, “If the FATF comes down heavily on them, they may have to do a rethink on their rhetoric and activities. FATF is a factor (in the reduction of terror activities in Kashmir valley).”
FATF’s major concern remains Pakistan’s inefficiency in prosecuting and penalising terror financing. Notably, the language used by FATF towards Pakistan was similar to the one which it used against the Islamic Republic of Iran in October 2019. It is to be noted that Iran is already blacklisted by FAFT.
Pakistan would require support of 13 countries to bail it out from the grey list. These countries have to vouch for the efforts made by Pakistan in countering terror financing and other points of action plan.
Recently, an Anti-Terrorism Court (ATC) in Pakistan had sentenced Co-Founder of Pakistan based terror group Lashkar-e-Taiba (LeT) and the Chief of Jama’at-ud-Da’wah (JuD) – Hafiz Saeed, who planned the 26/11 Mumbai terror attacks, to 11 years of imprisonment in 2 cases of terror financing. However, FATF has told Pakistan to convincingly prosecute and convict the top leaders of all terrorism groups, as mentioned in the Action Plan.
Putting the things straight, FATF has specifically asked Pakistan to show measures on following 8 areas:
- Demonstrate that remedial actions and sanctions are applied in cases of Anti-Money Laundering / Combating Financing of Terrorism (AML / CFT) violations relating to Terrorist Financing (TF) risk management and TF standard obligations
- Demonstrate that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services
- Demonstrate the implementation of cross-border currency and Bearer Negotiable Instruments (BNI) controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions
- Demonstrate that Law Enforcement Agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities and those acting on behalf or at the direction of the designated persons or entities
- Demonstrate that TF prosecutions result in effective, proportionate and dissuasive sanctions
- Demonstrate effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable) and prohibiting access to funds and financial services
- Demonstrate enforcement against TF standard violations, including administrative and criminal penalties, and provincial and federal authorities cooperating on enforcement cases
- Demonstrate that facilities and services owned or controlled by designated persons are deprived of their resources and the usage of the resources.
For the records, FATF had placed Pakistan on the grey list in June 2018. It was put on notice to be blacklisted by October 2019. During the October 2019 plenary, Pakistan got extension till February 2020.
