FATF, Pakistan and FATF 'grey list' History explained FATF, Pakistan and FATF 'grey list' History explained

FATF, Pakistan and FATF 'grey list' History explained

Pakistan to stay in FATF 'Grey List'

The Financial Action Task Force (FATF) on Friday announced that Pakistan will remain on the Financial Action Task Force "increased monitoring list", known as the FATF grey list. Pakistan has already put on their best efforts by implementing 26 out of the 27-points of FATF action plan in order to move out of the FATF grey list but members of FATF are not yet satisfied with Pakistan's progress on the given action plan.

FATF, Pakistan and FATF 'grey list' History explained
Pakistan to stay in FATF 'Grey List'

According to FATF president "Pakistan has made significant progress on the action plan by making progress on 26 points out of 27"

First we need to understand what FATF really is

What is FATF?

The Financial Action Task Force also known as FATF, is an intergovernmental organization founded in 1989 by G7 countries to develop aggressive policies to combat money laundering and terror financing.

FATF set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terror financing and other related threats to the international financial system. FATF is a policy-making body for actions against all above mentioned threats. FATF monitors progress in implementing its Recommendations through "peer reviews" of member countries.

What is FATF 'grey list'?

FATF grey list contains list of all those countries ho are considered as safe heavens for money laundering and terror financing but all these countries are willing to cooperate with FATF on their action plan to reduce these risks. This list contains 19 countries till date including Pakistan, Syria, Myanmar, Panama and many others.

What is FATF 'black list'?

FATF black list comprises of all those countries who are not willing to cooperate in taking actions against money laundering and terror financing. Countries in this list face serious implications in terms of trade and international relations as G7 countries impose restrictions on black listed countries. So far Iran and North Korea have been black listed by FATF. You can see how much negative impact countries economies face when they are black listed by looking at the situation of Iran and North Korea.

When Pakistan entered FATF grey list?

Pakistan entered FATF 'grey list' in 2008 for the first time as it was noted by FATF at that time Pakistan have no legislation of anti-money laundering and terror financing. Hence it posses big threat to international financing system. 

Then Pakistan was again put on the list of bad guys by FATF in 2012, at that time terrorism in Pakistan was at its peak and there were chances of Pakistan to be placed on 'black list' but after some good legislation Pakistan came out of FATF grey list in 2015.

Pakistan was placed back on the list of countries with legislative deficiencies in 2018 and Pakistan was given 15 months to implement action plan to get out of grey list. But that didn't happen and Pakistan is still on the list of FATF in year 2021 and there was a good chance of coming out of the list in June, 2021 but that didn't happen.

FATF and international politics:

There is a major public opinion in Pakistan and some other countries that FATF is being used by powerful countries like US for their own political gains. It was also reported that Pakistan as placed on the grey list on the recommendation of USA in 2018. With India eagerly wanting to push Pakistan in FATF 'black list' countries like China and Turkey are helping in portraying soft image of Pakistan to the world. All of this states that FATF is being used by powerful countries for their own gains rather than controlling International money laundering. Greater example of this is Pakistan's current relations with USA. US want airbases in Pakistan which Pakistan isn't willing to give so USA is pilling up pressure on Pakistan with the help of FATF. President Biden must not be very pleased after watching Prime minister Imran Khan's interview with HBO.

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