Pakistan's Prime Minister Shahid Khaqan Abbasi

The Financial Action Task Force (FATF) has dealt a blow to Pakistan by placing it on its 'grey list' for failing to curb terror funding despite Islamabad submitting a 26-point action plan to the global watchdog a day before and launching a diplomatic effort to avert the decision.

The decision was taken late on Wednesday night at FATF's plenary session in Paris where finance minister Shamshad Akhtar represented Pakistan.

FATF is an inter-governmental body established in 1989 to combat money laundering, terror financing and other related threats to the integrity of the international financial system. Pakistan had promised to choke the funding of terrorist groups, including Mumbai attacks mastermind Hafiz Saeed-led JuD and its affiliates, to avoid being blacklisted. The placement on the 'grey list' could hurt Pakistan's economy as well as its international standing.

Earlier in the day, Akhtar had urged FATF to remove Pakistan from its 'grey list'.

As the 37-nation FATF plenary began its proceedings, the Pakistani delegation apprised the watchdog of steps Islamabad had taken.

The process began in February when FATF approved the nomination of Pakistan for monitoring under its International Cooperation Review Group (ICRG) commonly known as 'grey list'. Pakistan was asked to prepare a plan to address the international body's concerns and get its approval or it could risk being moved to the black list.

On June 20, the Securities and Exchange Commission of Pakistan issued Anti Money Laundering and Countering Financing of Terrorism Regulations 2018, in compliance with FATF recommendations. On June 8, the National Security Committee reaffirmed its commitment to cooperate with FATF.

A Big Blow

  • Pak failed to choke funding of terrorist groups, including JuD.
  • Placement on FATF’s ‘grey list’ will hurt Pakistan’s economy.
  • By Jan, Pakistan is to list those proscribed under the Anti-Terrorism Act and the UN-designated entities.