Pakistan has been placed on the blacklist of the Financial Action Task Force’s Asia Pacific Group (APG for non-compliance and non-enforcement of safeguards against terror financing and money laundering.
The Financial Action Task Force (FATF has already greylisted Pakistan for failing to curb anti-terror financing.
While the two processes are separate, the APG blacklisting, or ‘Enhanced Expedited Follow Up’ status would impair Pakistan’s chances at extricating itself from the FATF greylist.
According to the APG’s final report, expected to be made public after the meeting ends, Pakistan failed in 32 of 40 ‘compliance’ parameters for its legal and financial systems, and failed 10 of 11 ‘effectiveness’ parameters for enforcing safeguards against terror-financing and money-laundering by UN-sanctioned entities and other non-government outfits.
Last week, Islamabad had submitted a 450-page compliance document that details all the changes the government has made to existing laws, and actions against terror groups in the past year and a half. Pakistan has claimed that it has charged Lashkar-e-Taiba/ Jamaat-ud Dawa (JuD chief Hafiz Saeed with terror financing, and frozen all assets of the JuD and other UNSC banned outfits this year, as part of its ongoing efforts to crack down on terror.
The compliance document will be reviewed against a 27-point action plan set out by the FATF, which could decide one of three oons: to remove Pakistan from the greylist, to continue to keep it on the greylist, or to downgrade it further to its blacklist. Review meetings will be held in Bangkok on September 5, with a final decision at the Paris plenary session on October 18-23.
India is a member of both the APG and the FATF consultations and is represented by a team of officials from the Ministries of Finance, External Affairs and Home Affairs. However, the actions demanding Pakistan’s review have been pushed by the U.S., the U.K., Germany and France. Pakistan’s multi-ministerial team at the APG meeting is led by its State Bank Governor.
On the grey list
The FATF is an intergovernmental organisation, which was formed to fight money laundering. While money laundering was the only goal since its formation in 1989, as intended by G7 countries, the September 11, 2001 attacks in the U.S. made the task force add terror financing to its mandate.
The FATF is to effectively implement legal barriers to the use of money for terrorism purposes, and for this purpose, it also assumes a role as a policy-making body.
On January 28, 2018 the FATF put Pakistan on its grey list. This was a day after Pakistan submitted a comprehensive 26-point action plan to the FATF to choke the funding of militants groups, including Mumbai attack mastermind Hafiz Saeed-led JuD and its affiliates, to avoid being blacklisted by it. The country had earlier been on the grey list from 2012 to 2015.