Pakistan hopes to be taken off the gray list of the Financial Action Task Force (FATF), a global money-laundering watchdog, by end of the month, an official of the South Asian country has said.
Islamabad has been on the FATF’s Compliance Document, also known as its Gray List, since June 2018 for alleged terrorist financing and money laundering risks after an assessment of the country’s financial system and security mechanisms.
In February, the 36-nation watchdog agreed to give Pakistan until June, when it would review the country’s status on the list, to comply with all 27 points listed in the action plan.
However, the meeting was postponed due to the novel coronavirus pandemic.
In September, the country’s parliament amended 14 laws related to its legal system to fulfill the FATF standards, while having already satisfied 13 other points.
Since 2018, Pakistan has since twice escaped being placed on the watchdog’s financial crime blacklist with the support of Turkey, China and Malaysia.
Pakistan’s opposition parties censured and attempted to obstruct or at least delay the government’s legislative process to promulgate laws– a FATF precondition. Besides, Pakistan’s archrival India has been lobbying to keep Islamabad on the gray list and in fact move it into a monitored jurisdiction– a blacklist.
The FATF’s plenary virtual meeting is scheduled from October 21-23 in Paris. Will the decision in the forthcoming session be made on merit? Or will it be grounded in the political veracities of global politics, which limits Pakistan’s chances of exiting the gray list?
Opposition parties are afraid that the government will use these laws for political victimization. Both leading political parties— the PML-N and PPP high-ups have been subjected to money-laundering litigation, like former President Asif Ali Zardari and ex-Prime Minister Nawaz Sharif.
Nonetheless, the government was able to amend 15 laws to upgrade its legal system matching international standards as required by the FATF. It also started taking action against domestic militant units, such as JuD and the government froze their movable and immovable assets.
With the approval of laws, the government has gained some confidence in its removal from the gray list. On October 10, Foreign Minister Shah Mehmood Qureshi expressed his optimism that the country would soon be off the FATF gray list.
The Asia-Pacific Group on Money Laundering (APG), despite acknowledging Pakistan’s improvement in compliance with two of the 40 FATF recommendations on the effectiveness of anti-money laundering and combating financing terror (AML/CFT) system, has refrained from recommending its exit from the gray list.
Recent multiple, legislative, regulatory and practical steps will save it from blacklisting in the next virtual meeting, but it seems, Pakistan will still remain on the gray list. The only reason for this is that foreign and India lobbying against Pakistan creating hurdles to get rid off this list.