FATF to formally put Pakistan on grey-list

Published by India TV News Desk, New Delhi

Pakistan is set to be formally place don the grey list of the Anti-Money laundering watchdog Financial Action Task Force (FATF) during the Plenary session which begins today in Paris.

During the last plenary in February, India TV was the first to report that a decision had been taken to put Pakistan on the grey list.

In the wake of FATF Plenary meeting in Paris, Pakistan Finance Minister Shamshad Akhtar on Friday chaired a meeting in Islamabad, which was attended by Foreign Minister Abdullah Hussain Haroon and National Security Adviser Lt General (retd) Nasir Khan Janjua.

A Pakistani delegation would be also attending the FATF.

The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

According to international analysts, the grey-listing will squeeze Pakistan’s economy and make it harder for the country to meet its mounting foreign financing needs, including potential future borrowings from the International Monetary Fund. They have also argued that the grey-listing could lead to a downgrade in Pakistan’s debt ratings, making it more difficult to tap into the international bond markets.

In the past, Pakistan economy has been able to withstand such international pressure. Pakistan was on the FATF grey-list from 2012 to 2015, a period during which it successfully completed an IMF programme and raised over $5 billion from the international bond markets. During this period Pakistan’s imports and exports remained stable, evidence that the grey-listing did not raise any significant barriers to trade.

But with the growing pressure from the Trump administration to take action against the terror outfits Pakistan may not be able to wade through this sanction smoothly. The United States has already suspended assistance of over $1 billion, which included military assistance and the release of Coalition Support Funds (CSF) as Pakistan continued to entertain terror outfits like Haqqani network and 2008 Mumbai terror attack accused Hafiz Saeed’s Jamaat-ul-Dawa.

With no hope of further support from the United States, the FATF grey-listing is likely to be leave Pakistan with no choice but to act against terror outfits operating from its soil in decisive manner.