There and back again: A timeline of Pakistan's journey out of the FATF 'grey list'
Pakistan’s history with the Financial Action Task Force (FATF) — the international watchdog against money laundering and financing of terrorism — is a long and storied one.
It can be traced back to 2008 when the country was first placed on its increased monitoring list — the so-called “grey list” — for allegedly failing to take adequate measures to curb terror financing and money laundering.
When FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within the agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”.
Since 2008, Pakistan has landed on the unwanted list twice more, in 2012 and 2018. Interestingly, each time Pakistan was placed on the grey list, the country was either headed towards elections or had recently completed a transition of power.
Read: Pakistan on FATF’s grey list: what, why, and why now?
Here’s a look back at all three of Pakistan’s grey listings by the FATF and actions taken in recent years to exit it:
Feb 28, 2008 — Pakistan is placed on the FATF grey list after it failed to meet the international anti-money laundering (AML) and combating financing of terrorism (CFT) standards and is asked to work closely with the Asia Pacific Group (APG) to achieve targets.
June 2010 — Pakistan exits the FATF monitoring list after the country “demonstrated progress in improving its AML/CFT regime, including enacting a permanent anti-money laundering law”.
Also read: FATF move an embarrassment but won’t hit economy, NA told
Feb 16, 2012 — Pakistan is placed on the FATF’s grey list again for not being fully compliant with the standards for effectively combating the twin menaces of money laundering and terrorist financing.
Feb 26, 2015 — FATF removes Pakistan from the grey list and the global watchdog welcomes Pakistan’s “significant progress in improving its AML/CFT regime” noting that the country had established the legal and regulatory framework to meet the commitments in its action plan.
June 28, 2018 — Pakistan is placed on the grey list for the third time, with the FATF reasoning being that the country had failed to act against terror financing on its soil.
Aug 16, 2018 — The APG finds deficiencies in Pakistan’s FATF action plan after a 12-day inspection.
March 8, 2019 — Banned outfits labelled as high risk to meet FATF terms.
May 11, 2019 — Pakistan Customs introduces policy to curb terror financing.
July 25, 2019 — FATF cell set up at the Federal Board of Revenue (FBR) to deal with terror financing.
Aug 25, 2019 — PM sets up body to help meet FATF targets.
Oct 18, 2019 — The FATF retains Pakistan on the grey list, urging the country to swiftly complete its full action plan by February 2020.
Oct 29, 2019 — A FATF cell is established in interior ministry to ensure implementation on action plan.
Feb 21, 2020 — The FATF keeps Pakistan on its grey list until June, stressing the need for further actions for completing the action plan.
Feb 24, 2020 — The FBR announces it will watch real estate, jewellery trades for FATF compliance.
June 24, 2020 — The FATF’s virtual plenary meeting does not take up Pakistan’s case.
Aug 17, 2020 — The Senate adopts one of five FATF-related bills.
Aug 18, 2020 — The upper house of parliament passes two more FATF-related bills.
Sept 16, 2020 — A joint session of Parliament passes three FATF-related bills.
Oct 6, 2020 — The Securities and Exchange Commission of Pakistan (SECP) has met all FATF conditions, says chairman.
Oct 23, 2020 — The FATF finds that Pakistan has successfully complied with 21 out of 27 points of action but decided to keep the country on its ‘grey list’ until February 2021 until the implementation on the plan to the core.
Nov 19, 2020 — Jamaatud Dawa (JuD) chief Hafiz Saeed is convicted in another terror financing case, sentenced to 5 and a half years in prison.
Read: Who is Hafiz Saeed and why his conviction matters
Jan 8, 2021 — The State Bank of Pakistan (SBP) amends AML regulations to comply with FATF demands.
Jan 8, 2021 — Lahore anti-terrorism court sentences proscribed organisation Lashkar-e-Taiba’s (LeT) Zakiur Rehman Lakhvi to 5 years imprisonment for terror financing.
Feb 25, 2021 — Pakistan remains on the grey list as the watchdog claims the country failed to complete three out of 27 unmet action plan targets on anti-money laundering and combating financing terror.
March 25, 2021 — The government unilaterally registers all tax returns-filing real estate dealers as Designated Non-Financial Business and Professions (DNFBPs) and directed them to provide full details of their clients and property transactions after completing customer due diligence.
April 22, 2021 — Regulators tighten noose on money laundering.
May 19, 2021 — The Federal Investigation Agency (FIA) sets up special squad to curb money laundering.
June 25, 2021 — A single unmet action plan keeps Pakistan on the grey list.
July 4, 2021 — The National Accountability Bureau (NAB) sets up a cell to counter terror financing, money laundering.
Aug 16, 2021 — Banks have started using ‘politically exposed persons’ database.
Oct 21, 2021 — FATF says Pakistan will continue to be on its increased monitoring list as it was yet to fully implement the action plan given by the watchdog.
March 4, 2022 — The FATF retains Pakistan on its terrorism financing grey list and asks the country to address the remaining deficiencies in its financial system.
April 8, 2022 — Hafiz Saeed is sentenced to 33 years in jail.
June 14-17, 2022 — The global watchdog holds a four-day plenary session in Berlin, Germany. In a statement issued after the session, the FATF said Pakistan has met all 34 items on its action plan and the watchdog will now schedule an on-site visit to verify the implementation and sustainability of the country’s money laundering and counter-terrorism financing measures.
July 17, 2022 — Diplomatic circles in Islamabad anticipate the FATF’s on-site visit in September.
Aug 17, 2022 — The Pakistan Civil Aviation Authority starts implementing FATF standards in accordance with the government’s directives for the submission of customs’ declaration forms by all inbound and outbound passengers of international flights, requiring them to give details of their currency, gold jewellery, precious stones and restricted goods such as narcotics, weapons, satellite phones, etc.
Aug 29-Sept 2, 2022 — A 15-member joint delegation of the FATF and APG pays an onsite visit to Pakistan from Aug 29 to Sept 2 to verify the country’s compliance with its 34-point action plan.
Sept 2, 2022 — The APG releases an update on the ratings of its regional members, declaring Pakistan’s level of effectiveness ‘low’ on 10 out of 11 international goals on anti-money laundering and combating the financing of terror. This was despite Pakistan being compliant with 38 out of 40 technical recommendations.
Sept 14, 2022 — The Foreign Office expresses hope that the visit of the 15-member delegation will lead to a “logical conclusion” — Pakistan exit from the grey list. It describes the visit as “smooth and successful” from Pakistan’s perspective and says that a report by the visiting team will be discussed in the FATF’s plenary meeting scheduled in October in Paris.
Oct 21, 2022 — Pakistan is removed from the FATF’s enhanced monitoring list after meeting 34 action items in two concurrent action plans over a period of four years.
A photo of a session on the second day of the Financial Action Task Force’s (FATF) plenary session from October 20 to 21. — Photo courtesy FATF Twitter