FATF greylist or blacklist: A test of Pakistan’s foreign policy clout

FATF greylist or blacklist: A test of Pakistan’s foreign policy clout

ISLAMABAD - Pakistan has completed all the requirements set out by the Financial Action Task Force (FATF) for its second review. However, it still needs diplomatic support to strengthen its case.

The concerned government offices have presented a ‘satisfactory report’ on the implementation of the 27-point FATF Action Plan in an in-camera briefing to the National Assembly Standing Committee on Finance.

The briefing was given by the Ministry of Finance, State Bank of Pakistan, and the National Counter Terrorism Authority (NACTA). It mainly focused on the fact that Pakistan has made significant progress in meeting the standards set by the international institution concerned with combating terror financing and money laundering.

The briefing also included concerns that certain regional and global powers may jeopardize Pakistan’s interests. However, the committee members were not completely satisfied with the briefing. The presentation by the government officials did not include point-by-point briefing due to which an objective analysis of the country’s footing cannot take place.

The committee was not briefed about the exact level of compliance on the 19 actions conditioned by the FATF for the second review that will take place in June. Chairman’s Briefing

In a brief statement to the media following the meeting, Standing Committee Chairman Faizullah said that Pakistan has sent a satisfactory report to the FATF on implementation of its action plan. He added that all the technicalities of the review have been fulfilled and now the government is working on the political aspects. ------------------------------

According to a few committee members, without political and diplomatic efforts, odds are rare that Pakistan would be able to satisfy the FATF. Therefore, the government will seek support from at least four countries to back its case in the FATF second review.

Notably, for the second review, Pakistan needs to meet 19 points out of the 27-point action plan. These 19 conditions include the three FATF declared as unsatisfactory in the first review.

The committee chairman said that the government is determined to complete all the conditions set out by the terror financing watchdog. He said that the government has already submitted the Anti Money Laundering Bill 2019 in the National Assembly. It will be enacted soon, he told.

The major hurdle in Pakistan’s way is India, as it has undermined Pakistan’s case before the FATF earlier as well. The director general of India’s Financial Intelligence Unit (FIU) is the co-chair of the Joint Group (JG) of the International Cooperation Review Group (ICRG) of the Asia Pacific Group.

This is the same group that is presenting Pakistan’s case before the FATF and its Joint Group is holding a meeting next month in Sri Lanka. After the meeting, the case will be presented in the plenary meeting of the FATF in June. India’s presence as the co-chair can highly imperil the prospects of Pakistan getting off the greylist.

Pakistan has requested the FATF to remove India as the co-chair of the Joint Group to ensure the review process is unbiased, fair, and objective. However, the FATF did not cater to Pakistan’s request.