THE Financial Action Task Force will decide next month if Pakistan has done enough to be removed from the grey list. If FATF decides that Pakistan has taken substantial measures to curb money laundering and terror financing, and based on its assessment removes Pakistan from the list, it would defuse a big threat to this country’s economy and its standing in the international community. If, however, Pakistan is unable to satisfy FATF that it has taken sufficient steps in this direction and is downgraded to the blacklist, then the country could face severe diplomatic and financial consequences, including an uncertain fate for the ongoing IMF programme. Much, therefore, rides on what happens next month.
Much also depends on Pakistan’s own progress on this front. On Tuesday, the Senate Standing Committee on Finance approved two important bills on money laundering and foreign exchange regulations to meet the requirements of FATF. Earlier, too, the National Assembly passed a crucial FATF-related bill for the exchange of information and criminals with other countries. Since the last meeting of FATF in 2019, Pakistan has been working feverishly to address all the objections raised by FATF and to build a strong case so that it can be removed from the grey list. According to available information, various government departments, ministries and relevant bodies have made significant headway in tightening laws and legislating new ones where necessary, while updating rules and regulations to satisfy the requirements of FATF. Years of neglect have clearly taken a toll, and the state has no choice but to put in a massive effort to bring transparency to its fight against terror financing and money laundering. Hard as it might be, it is the right thing to do.
It may be necessary for us to comply with FATF demands but it is also in our own interest to do so. Pakistan has been lax on these matters for too long — often as a result of misplaced priorities — and it has had to endure a heavy cost for this. Now that the state has taken a decision to crack down on all organisations that may have links with terror financing and extremism, Pakistan would be doing itself a favour by going all the way to reform its archaic system and block all loopholes that allow for the unaccounted trafficking of money. However, it is important that parliament be taken on board before next month’s meeting. All steps taken so far should be discussed in the Senate and National Assembly so that the people’s representatives can give their input. Pakistan has chosen the right direction and it should hold steady even beyond the requirements of FATF. We still have a long way to go to rid ourselves of the menace of terrorism and we should not lose sight of the real objective. Hopefully, FATF will recognise our efforts in this respect.
Published in Dawn, January 9th, 2020