Pakistan's anti-corruption watchdog has established an anti-money laundering and terror financing cell to check financial crimes and illegal transfer of resources as the country struggled to exit from the FATF's grey list.

The Paris-based Financial Action Task Force (FATF) placed Pakistan on the grey list in June 2018 and asked Islamabad to implement a plan of action to curb money laundering and terror financing by the end of 2019 but the deadline was extended later on due to the COVID-19 pandemic.

The National Accountability Bureau (NAB) took action as the country struggled to get out of the grey list of the Financial Action Task Force (FATF), the Dawn newspaper reported on Monday.

The move comes after the FATF retained Pakistan on its 'grey list' last month for failing to check money laundering, leading to terror financing, and asked Islamabad to investigate and prosecute senior leaders and commanders of UN-designated terror groups, including Hafiz Saeed and Masood Azhar.

The global body against money laundering and terror financing also asked Pakistan to work to address its strategically important deficiencies.

Pakistan will continue to remain on the "increased monitoring list", FATF president Marcus Pleyer said on June 25 after the decision had been taken at the conclusion of the FATF's virtual plenary. "Increased monitoring list" is also known as the 'grey list'.

A senior official of the anti-graft watchdog told the newspaper that the Anti-Money Laundering and Combating the Financing of Terrorism (AML&CFT) cell would coordinate with the FATF Secretariat and stakeholders concerned to curb money laundering and terror financing.

The report said that the main responsibility to investigate terror financing cases will still lie with the Federal Investigation Agency (FIA).

According to a NAB official, being a member of the United Nations Convention against Corruption (UNCAC), it was mandatory for the bureau to set up the cell to weed out corruption and make Pakistan corruption-free by adopting the ‘Accountability for All' policy.

He said NAB, being the apex anti-corruption agency and mandated to eliminate corruption and corrupt practices, was operating through a three-pronged strategy of ‘awareness, prevention and enforcement'.

Pakistan has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with anti-money laundering and terrorist financing regulations by the global watchdog, a measure that officials here fear could further hurt its economy.

In February, the FATF gave a fourth extension to Pakistan to fully implement a 27-point action plan and ‘strongly urged' it to meet the remaining three conditions about terror financing investigations and the United Nations Security Council resolutions.

Noting that Pakistan has now completed 26 of the 27 action items given to it in 2018, FATF President Pleyer said last month the organisation has asked Pakistan to take action against UN-designated terrorists.

The UN designated terrorists based in Pakistan include Jaish-e-Mohammed (JeM) chief Azhar, Lashkar-e-Taiba (LeT) founder Saeed and its 'operational commander' Zakiur Rehman Lakhvi.

Azhar, Saeed and Lakhvi are the most wanted terrorists in India for their involvement in numerous terrorist acts, including the 26/11 Mumbai terror attacks and the bombing of a CRPF bus in Jammu and Kashmir's Pulwama district in 2019.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.