Pakistan will stay on the “grey list” of the Financial Action Task Force (FATF), the global terror financing watchdog, until February next year, the body ruled today. The country has failed to meet the conditions needed for unfettered access to international funds.
Failing to meet six of the 27 points it had to fulfil, Pakistan “needs to do more”, the FATF said, according to sources. It said the FATF would make an on-site visit only once Islamabad fulfils all conditions and only then the curbs would be lifted from Pakistan.
“Pakistan has completed 21 out of 27 items. It means that the world has become safer but six deficiencies need to be repaired. We give them a chance to repair their progress and if not then a country will be pushed to the blacklist,” the FATF said.
Union Government of India sources had said earlier that it expected Pakistan to stay on the grey list as the country demonstrably failed to act against organisations that acted as fronts for terrorist outfits. Pakistan also nurses and shields some of the most wanted terrorists of the world like Maulana Masood Azhar and Hafiz Saeed, India alleges.
Further, Pakistan had failed to effectively crackdown on means of financing terror activities and money laundering and four nominating countries the US, UK, France and Germany were not fully satisfied with its role in Afghanistan, sources had said.
With Pakistan remaining in the grey list, it has become increasingly difficult for it to get financial aid from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European Union, exacerbating problems for the cash-strapped country.
The FATF reached the decision at the end of a three-day virtual plenary that had earlier been scheduled in June. Pakistan got an unexpected breather after the global watchdog against financial crimes temporarily postponed all evaluations and follow-up deadlines in the wake of COVID-19 pandemic.
The watchdog put a general pause in the review process, thus giving additional four months to Pakistan to meet the requirements.
To avoid the blacklist, Pakistan has needed the support of three countries and it has been consistently backed by China, Turkey and Malaysia to dodge the label. Pakistan needs 12 votes out of 39 to exit the grey list and move to the white list.
The FATF had placed Pakistan on the grey list in June 2018 and was given a plan of action to complete it by October 2019. Since then, the country continues to be on that list due to its failure to comply with the FATF mandates.
Before that, in February 2018, the FATF had refused to put Pakistan on the terror watch-list.
The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
The FATF currently has 39 members including two regional organisations – the European Commission and Gulf Cooperation Council.
India is a member of the FATF consultations and its Asia Pacific Group.