New Delhi: The anti-money laundering and terror financing watchdog — Financial Action Task Force (FATF) — Friday said Pakistan has come out of the ‘grey list’, which comprises those countries that are under its scanner for “increased monitoring”.
The decision to keep Pakistan out of the ‘grey list’, which it entered in June 2018, was finalised at the end of the two-day plenary of the Paris-based watchdog that was held for the first time under the two-year Singapore Presidency of T. Raja Kumar.
“The FATF welcomes Pakistan’s significant progress in improving its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed in advance of the deadlines, encompassing 34 action items in total,” the terror financing watchdog said in a statement.
“Pakistan is therefore no longer subject to the FATF’s increased monitoring process. Pakistan will continue to work with the Asia-Pacific Group (a sub-group of the FATF plenary) to further improve its AML/CFT system,” it added.
Later, the Ministry of External Affairs (MEA) said Pakistan was forced to take some action against well-known terrorists, including those involved in the 26/11 attack, due to FATF scrutiny.
“It is in global interest that the world remains clear that Pakistan must continue to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control,” the MEA added.
While the removal from FATF would not impact the already worsening economy of Pakistan, it nevertheless significantly lessens the scrutiny on Islamabad’s international monetary transactions.
Addressing a question made by ThePrint during a media interaction, Kumar said, Pakistan has “largely addressed” all of the 34 action items that were asked of Islamabad by the FATF in the past four years.
“The on-site team verified that there is high-level commitment on the part of the Pakistani leadership politically as well as sustainability of Pakistan’s reforms and very importantly the commitments to continue to make improvements in the future,” he said regarding the outcome of the FATF’s on-site evaluation in August.
In its last plenary convened in June, the FATF had said it would conduct on-site evaluations in Pakistan and submit the report before the October plenary.
“Pakistan has made significant improvements to strengthen the effectiveness of its framework of combatting terrorism financing. Steps have also been taken to strengthen risk-based supervision of both financial and non-financial institutions and investigate and prosecute money laundering,” Kumar added.
Pakistan was put in the list for not meeting anti-money laundering and terror financing provisions. So far, two major Pakistani banks — HBL and National Bank of Pakistan — have coughed up $225 million in 2017 and $55 million in 2022 respectively in fines imposed by the US regulators for non-compliance of anti-money laundering laws.
“FATF looks at the system that the country has in place both on the anti-money laundering front as well as terrorism financing,” Kumar said, adding that it was “satisfied” after the FATF on-site team spoke to relevant authorities and verified what Islamabad had committed.
“This is very important because that is the commitment that we need. After the on-site visit, we were assured that Pakistan has taken action and will continue to take action to beef up their anti-money laundering and terrorist financing system.”
Reacting to the FATF outcome, Pakistan Foreign Minister Bilawal Bhutto Zardari tweeted: “Congratulations to the people of Pakistan. Pakistan has officially been removed from the FATF ‘grey list’. Pakistan Zindabad.”
Pakistan Deputy Foreign Minister Hina Rabbani Khar had reached Paris even before the FATF plenary began in an effort to shore up diplomatic support for her country. She, too, tweeted about the development that took place Friday.
Pakistan has MA exited FATF Grey List. This has been a long and arduous journey that has only been made possible through strong political ownership across the political spectrum. It shows Pakistan can achieve much when we work together for Pakistan's interest. pic.twitter.com/AUWZcXW4l8
— Hina Rabbani Khar (@HinaRKhar) October 21, 2022
In these past four years, Pakistan has cracked down on some of the dreaded individuals such as Lashkar-e-Taiba (Let) chief Hafiz Saeed, LeT financier Abdur Rehman Makki, and Mumbai attack mastermind and Lashkar-e-Taiba operations commander Zaki-ur-Rehman Lakhvi
However, India has been vehemently denying that Pakistan has taken any action on these individuals and called moves to detain or to put them behind bars as “cosmetic”.
According to official sources, Islamabad was helped by China, which came to its rescue for as many five times in this year alone whenever India, along with the US, moved proposals at the UN to sanction Pakistan-based terrorists.
Earlier this week, New Delhi and the US had attempted to impose UN-led sanctions on two Pakistan-based terrorists — Lashkar leader Shahid Mahmood and LeT chief’s son Hafiz Talah Saeed. But Beijing vetoed both these moves.
What has come as a setback for India is that one of its eastern neighbours, Myanmar, was blacklisted Friday by the FATF.
(Edited by Tony Rai)