At the time of Liu’s appointment, India had voted in favour of China. China will take over as the chair of the inter-governmental body next month

NEW DELHI: The meeting of the Financial Action Task Force (FATF) next month will be closely watched by the government as it will be the last plenary meet before China takes over as the chair of the inter-governmental body, officials told ET.

India, which after a decade-long diplomatic impasse managed to get JeM chief Masood Azhar listed as a terrorist by the UN last month, is worried that with China taking over the chair, the move to pressure Pakistan to comply more with anti-terrorist financing efforts may lose steam.

The FATF meet is scheduled to be held from June 16 to 21 at Orlando, Florida, top diplomatic sources confirmed. US’ Billingslea was appointed FATF president in July last year.

China’s Liu was appointed as FATF vice president and also the FATF president-designate by the plenary for one year preceding his presidential term. At the time of Liu’s appointment, India had voted in favour of China in a move aimed at getting Beijing to support New Delhi’s case for grey-listing Pakistan.

Liu, according to FATF, currently serves as director-general of the legal department at the People’s Bank of China, the central bank.

“With Beijing taking over as the chair, fears are ripe that Islamabad may get a breather, which will mean that action against groups like JeM, LeT may lose steam,” said a government official.

At the upcoming FATF plenary in Florida, Pakistan’s progress and compliance with the remaining targets will be concluded and a decision will be taken whether the country should be moved out of the ‘grey list’ or kept there in case of minor shortcomings, or be downgraded to the ‘black list’, ET has learnt.

Sources said if Pakistan fails to comply on “at least 15-17” of the 40 FATF recommendations, it faces sanctions by international monetary bodies. In that case, they said, Pakistan faces the risk of being downgraded by multilateral lenders like the IMF, World Bank, ADB, etc. It may also be subject to a downgrade in risk rating by agencies such as Moody’s, S&P and Fitch, sources said. Islamabad has been claiming that it has taken action against militant groups like Jaish and Lashkar, and after Azhar’s listing by the UNSC, has also promised action against the terror mastermind.

During the last review, Islamabad is said to have been either fully or partially compliant on only 8-10 parameters, among the 40 FATF recommendations, sources said. After being grey-listed last year, Pakistan had submitted a 26-point action plan in June to and committed to implementing it over the next 15 months. The plan included a squeeze on the finances of terror outfits such as the Jamaat-ud Dawa, Falahi-Insaniyat, LeT, JeM, Haqqani Network and the Afghan Taliban.