In a setback to its finances for the country’s needs, Pakistan on Friday was retained by the Financial Action Task Force (FATF) in its ‘grey list’ for failing to meet the strategically important deficiencies to fully implement the 27 point action. Pakistan has also failed to adequately investigate and prosecute senior leaders and commanders of UN-designated terrorist groups, the FATF observed.
Despite its efforts to get out of the list, Pakistan has been on the watchdog’s list for three years now. A primary reason why Pakistan has not been able to spare the global scrutiny is that it has not tackled the money laundering and terror financing flagged by the FATF.
Landing on the ‘grey list’ for 3 years now, Pakistan will continue to not get any respite in accessing finances in the form of investments and aid from international bodies including the International Monetary Fund (IMF).
Here is what Pakistan should do in order to drop its name from FATF list:
-Pakistan, as it suggested, has to implement its plans to investigate and prosecute leaders and commanders of all the eight terror groups that have been named by FATF in the past – the Taliban, Haqqani Network, Lashkar-e-Taiba (LeT), Jaish-e-Mohammed (JeM), Jamaat-ud-Dawah (JuD), Falah-e-Insaniat Foundation, al-Qaeda and Islamic State.
- It is the sole remaining action item that was significant, experts have said.
- In a statement, the watchdog says that it encourages Pakistan to continue to make progress to address “as soon as possible the one remaining CFT (counter-terrorist financing)-related item by demonstrating that TF (terrorist financing) investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.”
- Pakistan has only investigated and moved to take action against senior leaders of the LeT and JuD, including LeT founder Hafiz Saeed and several of his senior aides. As a result, Saeed and a few of his aides are currently serving sentences given to them after being charged for financing a chain of several terror cases last year.
- In order to get off the list, Pakistan needed to take action against leaders of the Jaish and its chief Masood Azhar. The Jaish group has been linked to several high-profile terror attacks in recent years, or the Afghan Taliban, which has stepped up fund raising on Pakistani soil in recent weeks against the backdrop of the withdrawal of US and NATO forces from Afghanistan.
- Pakistan, FATF said, should continue addressing “strategically important” deficiencies in its anti-money laundering and counter-terrorist financing regimes by enhancing international cooperation by amending the country’s mutual legal assistance (MLA) law and demonstrating that assistance is being sought from foreign countries in implementing designations under UN Security Council resolution 1373.
- Pakistan should also demonstrate that “supervisors are conducting both on-site and off-site supervision commensurate with specific risks associated with DNFBPs (designated non-financial businesses and professions), including by applying appropriate sanctions where necessary” and that “proportionate and dissuasive sanctions are applied consistently to all legal persons and legal arrangements for non-compliance with beneficial ownership requirements”, the watchdog said.
- Pakistan will have to demonstrate an increase in probes and prosecutions around money laundering. The proceeds of crime continue to be restrained and confiscated in line with the country’s risk profile, including working with foreign counterparts to trace, freeze and confiscate assets, and that DNFBPs are being monitored for “compliance with proliferation financing requirements and that sanctions are being imposed for non-compliance”, FATF said.
- Noting a progress point on Pakistan’s part, the watchdog said that the country has continued political commitment leading to significant progress across a comprehensive
- The watchdog noted that “Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan”.
Pakistan was asked by the global watchdog in October to deliver on all 27 points by this February but the country was not taken off the FATF list.
According to an Islamabad-based think tank Tabadlab, Pakistan sustained a total of USD 38 billion in economic losses due to FATF’ decision to thrice place the country on its grey list since 2008, reported ANI.
The grey-listing events of Pakistan from 2008 to 2019 has resulted in total GDP losses worth USD $38 billion, the report “Bearing the cost of global politics — the impact of FATF grey-listing on Pakistan’s economy” said.
