*ISLAMABAD: * Washington last week persuaded member states of the FinancialAction Task Force (FATF) to place Pakistan back on the “grey list” ofnations with inadequate terrorist financing or money laundering controls.Pakistan was on the list for three years, until 2015.

Miftah Ismail, officially the adviser on finance, revenue and economicaffairs to Prime Minister Shahid Khaqan Abbasi, led Pakistan’s negotiationsin Paris. He told Reuters that Washington did not seem genuinely eager tosee Pakistan boost its terrorist financing regulations and was instead benton humiliating the country.

“If the Americans were interested in working with us and improving our CTF(counter-terrorist financing) regulations, they would have taken the offerI was making them,” Ismail said. “But their idea was just to embarrassPakistan.”

Diplomatic and Pakistani government sources say Pakistan fended off aUS-led motion on Tuesday as Turkey, China and the Gulf CooperationCountries (GCC) countries objected to it. But in a break from tradition,the motion was brought up again on Thursday and passed as the GCC and Chinadropped their objections.

Ismail said that he urged the United States to allow Pakistan until June tofix any outstanding CTF issues and ceded ground in negotiations to strike adeal, but that the US was determined to see Pakistan suffer.

US officials say Pakistan remains weak on terrorist financing prosecutionsand has not done enough to combat money-raising capabilities of Islamiccharities controlled by Hafiz Saeed, whom the US has designated aterrorist. The officials blame Saeed for the 2008 Mumbai attacks, whichkilled 166 people.

In the run up to the FATF meeting, Pakistan sought to gain favor by seizingcontrol of parts of Saeed’s Jamaat-ud-Dawa (JuD) and Falah-e-InsaniatFoundation (FIF) charities, which the United States terms “terroristfronts” for militant group Lashkar-e-Taiba (LeT).

Saeed, who founded LeT in 1980s, denies orchestrating the Mumbai attacks.

Diplomats have cast doubt on whether the takeovers are long-lasting, orsimply a short-term move to appease FATF member states and ease pressure onPakistan.

Ismail said Pakistan’s law-enforcement shortcomings are often confused forlack of desire, especially at provincial level, where police officers arepoorly trained when it comes to terrorist financing legislation.

“The will is there,” he added.

Ismail ruled out Pakistan’s retaliating against Washington over the FATFlisting. He said the country would keep working to improve its CTFcapabilities and win the confidence of Britain, Germany and France, whoco-sponsored the US motion in Paris.

Pakistan hopes to be removed from the grey list in six to 12 months fromJune, when it will be officially placed on the watch list, Ismail added.

“LITTLE HICCUP”

Despite rising growth on the back of improving security and China’s vastinfrastructure investment, Pakistan’s economy has come under renewed stressduring the past year.

Its foreign currency reserves are shrinking and the International MonetaryFund (IMF) has warned Pakistan’s macroeconomic stability is weakening amida ballooning current account deficit and a widening fiscal deficit.

Ismail said he did not foresee the FATF decision acting as a brake onPakistan’s economy, which, with growth above 5 percent, is expanding at itsfastest pace in a decade.

“I would rather not be in the list, but I don’t think it will hurt”economic growth, Ismail said, adding that ordinary Pakistanis would not seeany impact from the FATF move.

He conceded, however, that being placed on the watch list did not helpPakistan’s tarnished image abroad, and “doesn’t help” with its efforts toattract more foreign direct investment, a major goal of the government.

But he urged foreign investors to look past the negative headlines, andpointed out that Pakistan’s economy grew even during the period the countrywas last on the watch list. From 2012-2015, exports and foreign currencyreserves expanded, while its stock market shot up by more than 200 percent,he said.

“We are focused on improving our economy and overcoming this littlehiccup,” he said. “We will continue on our path forward.” – Agencies