*ISLAMABAD: *A global money-laundering watchdog has placed Pakistan back onits terrorist financing watchlist, Indian media and a diplomatic sourcesaid on Friday, in a likely blow to both Pakistan’s economy and itsstrained relations with the United States.
The move is part of a broader US strategy to pressure Pakistan to cutalleged links to militants waging chaos in neighbouring Afghanistan.
It comes days after reports that Pakistan had been given a three-monthreprieve before being placed on the list, which could hamper banking andhurt foreign investment.
A non-Indian diplomatic source from one of the FATF countries confirmedthat the group had decided Pakistan would be put back on the watchlist.
Earlier in the week China, Turkey, and the Gulf Cooperation Council (GCC)were opposing the US-led move against Pakistan but by Thursday night bothChina and the GCC dropped their opposition, the diplomatic source said.
“The decision was taken yesterday,” the diplomat said.
He added that the financial consequences would not kick in until June,which, in theory, could allow Pakistan the wriggle room to fix theterrorist financing issues. “But the odds of that, particularly in anelection year, seem slim,” he added.
Washington has spent the past week lobbying member countries of theFinancial Action Task Force (FATF) to place Pakistan on the so-called “greylist” of nations that are not doing enough to combat terrorism financing.
Pakistan’s last-minute efforts to avoid being placed on the list, whichincluded taking over bodies linked to a powerful figure, provedinsufficient, India’s Republic news service and Times Now televisionchannel said.
An official statement was expected later on Friday.
Pakistan was previously on the list for three years until 2015.
Pakistani officials and analysts fear being on the FATF watchlist couldendanger its handful of remaining banking links to the outside world,causing real financial pain to the economy just as a general election loomsin the summer.
Under FATF rules one country’s opposition is not enough to prevent a motionfrom being successful. Britain, France and Germany backed the US.
Islamabad has sought to head off the move by amending its anti-terrorismlaws and by taking over organisations controlled by Hafiz Saeed whomWashington blames for the 2008 Mumbai attacks that killed 166 people.
On Tuesday, Foreign Minister Khawaja Asif tweeted that Pakistan hadreceived a 3-month reprieve, adding that it was “grateful to friends whohelped”. – Agencies