Pakistan to remain in “Grey List” of FATF: Reason and implications.

The Financial Action Task Force (FATF) have voted to keep Pakistan under its Grey List.  The decision by the FATF was taken because Pakistan failed to comply with the 27 parameters set by the FATF and has completed only 21.

Background

The Asia-Pacific Group of FATF had also submitted a report called “Follow up report on mutual evaluation of Pakistan”  and suggested to put Pakistan under grey list. The decision of the FATF is based on this report only.

Follow up report on mutual evaluation of Pakistan

The report has highlighted that the progress of Pakistan to combat the Financing terror system and anti-money laundering made by the Financial Action Task Force had not made any progress as compared to that of 2019. The Asia Pacific group of the organisation, in 2019, had downgraded Pakistan status from “regular follow-up” to “enhanced follow up” that means the country had to provide monthly reports of its compliance to the Financial Action Task Force recommendations.

How it will affect Pakistan?

Pakistan will face problems In getting the financial aid from International organisations including the Asian Development Bank, International Monetary Fund, and the World Bank.

Steps taken by Pakistan

Pakistan recently passed three crucial legislation after it was downgraded under the FATF list in 2019:

  1. Anti-terrorism act (Amendment) Bill 2020
  2. Anti-money laundering (Amendment) Bill
  3. Islamabad capital territory Waqf properties bill