Pakistan was today (Friday, Aug 23) placed on the enhanced blacklist of the Financial Action Task Force’s (FATF) Asia Pacific Group (APG) for non-compliance and non-enforcement of safeguards against terror financing and money laundering.
“The APG has placed Pakistan in the Enhanced Expedited Follow Up List (Black List) for failure to meet its standards,” an Indian official privy to the development was quoted as saying by news agency PTI.
Pakistan is already on global grey list of FATF 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, the FATF found Pakistan non-compliant on 32 of 40 compliance parameters on money laundering and terror financing.
On 11 effectiveness parameters of money laundering and terror financing, Pakistan was adjudged low on 10. Despite its efforts, Pakistan could not convince the 41-member panel to upgrade it on any parameter, said the officials.
Pakistan now needs to focus on avoiding the blacklist in October, when the 15-month timeline ends on the FATF’s 27-point action plan.
Since June 2018, Pakistan has been on the “grey list” of countries whose domestic laws are considered weak to tackle the challenges of money laundering and terrorism financing.
In June this year, FATF had issued a strong warning to Pakistan to curb terror financing by October or face consequences. It had said that the country could be blacklisted unless it fulfills an “action plan” against UN-designated terrorists operating on its soil by October.
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 options: 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 US, the UK, Germany and France. Pakistan’s multi-ministerial team at the APG meeting is led by its State Bank Governor.