The Financial Action Task Force (FATF), a global watchdog for fighting money laundering and terrorist financing, has held a 4-day meeting in Germany from 14 June to 17 June. Today it is expected to announce whether Pakistan will remain on the FATF Grey List or come out. The country has been on and off the FATF’s increased monitoring list for the last 14 years. After steering clear for a few years, it eventually finds its way back on the list. However, this time the country is hopeful that the watchdog will finally rule in the country’s favour.
Pakistan’s Romance with FATF Grey List
Currently, Pakistan has been on the FATF Grey List since 2018. Previously, it was on it from 2008-10 and 2012-15. It was first placed on the list in 2008 for allegedly failing to curb money laundering and terror financing (AML/CFT).
Whenever the watchdog places a country on the unwanted list, it means that country has committed to resolving the issues FATF identified within the given timeframe. Pakistan exited the list in 2010 after “demonstrating progress on AML/CFT front including enacting a permanent anti-money laundering law”.
It made its way back on the list in 2010 for not being “fully compliant” with the standards of effectively battling the twin evil, i.e. money laundering and terror financing. FATF removed Pakistan in 2015 after noting “significant progress” in improving the “legal and regulatory framework” to meet the commitments.
Then the agency put it back on the grey list in 2018, citing the same reason. Interestingly, whenever Pakistan ended up on the grey list, it was either the time of elections or the completion of the power transition.
In the plenary meeting of 2018, FATF reported that Pakistan has completed 26 out of 27 items on the action plan and encouraged it to address the remaining one as soon as possible. Reportedly, the Ministry of Foreign Affairs had prepared a presentation for the current plenary to show that Pakistan has completed all 27.
How Can a Country Be Removed from the List?
As per the watchdog’s website, after determining that a country has completed the action plan items, FATF schedules an on-site visit to “confirm that necessary legal, regulatory, and operational reforms are being implemented with required political commitment and institutional capacity to sustain implementation”.
If the visit produces positive results, FATF removes the country at the next plenary. The government is expected to continue improving its AML/CTF regimes through the FATF’s “normal follow-up process”.
It is also believed that the arrest of Hafiz Saeed would greatly help Pakistan exit the FATF Grey List. An anti-terrorism court sentenced Lashkar-e-Tayyaba leader to 33 years in prison for terrorism on 9 April.
Mixed Feelings of Former and Current Government
Several Pakistan Tehreek-e-Insaf (PTI) politicians have been posting all day on social media claiming that FATF has removed Pakistan from the grey list. However, Minister of State for Foreign Affairs Hina Rabbani Khar warned about avoiding the speculations about the meeting’s outcome. She was leading the delegation for Pakistan in Berlin and informed that the discussion was still ongoing and FATF would announce the conclusion later in the night. She added that her ministry would reveal itself on the following day whether Pakistan made it out of the FAFT Grey List or not.
On the other hand, the former government, ousted through a no-confidence motion, has claimed credit for the possible exit from the FATF Grey List. They have been celebrating ahead of the final announcement saying that the current government passed no laws related to the watchdog. PTI’s Twitter handle praised Imran Khan for the work required to complete FATF’s action plan.