Three-day FATF meet begins from Wednesday, Pakistan’s fate hangs in balance
This meeting was earlier scheduled in June but Islamabad got a breather of four months as the Paris-based watchdog temporarily postponed all mutual evaluations and follow-up deadlines due to the coronavirus pandemic.Updated: Oct 21, 2020, 04:52 IST
The global terror financing watchdog, Financial Action Task Force (FATF), will hold a meeting from October 21 to 23. In this three-day virtual plenary meeting, the FATF will decide on whether Pakistan will remain in the “grey list” or not based on Islamabad’s commitment towards cracking down on money laundering and terror financing.
This meeting was earlier scheduled in June but Islamabad got a breather of four months as the Paris-based watchdog temporarily postponed all mutual evaluations and follow-up deadlines due to the coronavirus pandemic.
The FATF is an inter-governmental body that was established in 1989 to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system. Currently, it has 39 members including two regional organisations - the European Commission and Gulf Cooperation Council.
FATF and Pakistan
Pakistan was put in the grey list in 2018 for not doing enough to curb the financial activities of terror groups. In February, the FATF warned Pakistan that all deadlines set for implementing an action plan against terror financing had expired, and that the country had largely addressed only 14 of 27 action items in the plan. Asia-Pacific Group, the FATF’s regional affiliate, concluded last month that Pakistan had fully complied with only two out of the 40 recommendations that were made. Since it is in the grey list, it has become increasingly difficult for Islamabad to get any financial aid from International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European Union. In order to get out of the grey list, debt-ridden Pakistan imposed financial sanctions on 88 banned terror groups and their leaders, including 26/11 Mumbai attack mastermind and Jamaat-ud-Dawa (JuD) chief Hafiz Saeed, Jaish-e-Mohammed (JeM) chief Masood Azhar and underworld don Dawood Ibrahim.
What next for Pakistan?
If the FATF in its meeting concludes that Pakistan has failed to meet its requirements, the country could be put in the “Black List” along with North Korea and Iran. In August, Prime Minister Imran Khan had warned that if blacklisted at the FATF, Pakistan’s entire economy will be destroyed due to inflation and a massive fall in Pakistani Rupee. In order to stay out of the black list, Pakistan needs the backing of only three members of FATF’s 39 members. Pakistan has China’s support and has also reached out to Malaysia, Saudi Arabia and Turkey. Therefore, it is being expected widely that for now Pakistan will remain in the grey list.