Grey list concerns

Published June 27, 2021

THE FATF decision to keep Pakistan on its so-called grey list in spite of this country’s substantial progress on the original action plan has disappointed many. Yet others see it as an opportunity to intensify implementation to prove to the international community that Pakistan is a responsible state and willing to do what is expected of it to make the world a safer place. This is in line with Islamabad’s stated position on terrorism financing and money laundering, as well as the efforts of the PTI government to check corruption and the illegal flow of money from and into the country.

After all, the primary beneficiary of the exercise to stop money laundering and combat terrorism financing would be the national economy and the Pakistani people. The actions implemented so far to meet the 27-point FATF action plan have already resulted in remittances bonanza for the economy, providing more room to grow it.

Indeed, the FATF is used by global powers as a political tool to put pressure on countries like Pakistan. There are examples where the global watchdog delisted other jurisdictions under its enhanced monitoring even though they had done far less than Islamabad to tighten their controls over flows of illicit money. Thus, the feeling that India is misusing the FATF platform against Pakistan, as voiced by the foreign minister, is not entirely misplaced. Also, there are many who are calling for the FATF to first take action against the European countries believed to be major hubs of illicit money before forcing Pakistan to meet its standards. These are legitimate concerns and Pakistan should ask for the fair application of the AML/CFT regime everywhere.

Read: FATF’s decision to retain Pakistan on grey list raises eyebrows

On the other hand, the FATF has consistently been emphasising the complete execution of its action plan for Pakistan to get off the list. Yet some of us have failed to properly read the message of the watchdog after its review meetings, hoping that we still have enough geopolitical weight to get off the list, without having to fully comply with the FATF’s demands. This time, however, the FATF president has said clearly that the country will remain on the list as long as it does not address the single remaining action (related to the investigation and prosecution of senior leaders and commanders of UN-designated terror groups) as well as the items on a parallel action plan handed out by the watchdog’s regional partner, the Asia Pacific Group, in 2019.

Pakistan is also required to ensure that its law-enforcement agencies cooperate internationally to trace, freeze and confiscate the assets of the designated individuals and entities. More political will is needed to fully comply with the two action plans as the lack of it is imposing heavy costs on the country. The government must swing into action to fulfil the remaining conditions in order to avoid the serious consequences of delay and inaction.

Published in Dawn, June 27th, 2021

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