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In a significant development, the Financial Action Task Force (FATF) dropped Pakistan from ‘grey list’ which for the last four years had made the embattled nation very difficult to get international aid for issues like disaster management.
The global money laundering and financing watchdog removed Pakistan from its list of countries under “increased monitoring” after four years. Pakistan has been on the “grey list” of the FATF since 2018 because of “strategic counter-terrorist financing-related deficiencies”. The removal decision was announced by FATF President T Raja Kumar at the end of a two-day meeting in Paris, reported the Aljazeera. “Pakistan had addressed technical deficiencies to meet the commitments of its action plans,” Kumar was quoted by the Aljazeera as saying.
Now, the FATF has found that Pakistan has worked on strengthening safeguards against money laundering and has made efforts in combating terror financing.
In a statement, the Paris-based organization announced that as of October 21 “Pakistan is no longer subject to FATF’s increased monitoring process; to continue to work with APG (Asia/Pacific Group on Money Laundering) to further improve its AML/CFT (anti-money laundering & counter-terrorist financing) system”.
Pakistan’s Prime Minister Shehbaz Sharif in a tweet congratulated the country on its removal. “Pakistan exiting the FATF grey list is a vindication of our determined and sustained efforts over the years. I would like to congratulate our civil & military leadership as well as all institutions whose hard work led to today’s success,” he tweeted.
What is the FATF ‘grey list’?
FATF, the global money laundering and financing watchdog, was founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. In 2001, its mandate was expanded to include terrorism financing. This list is often externally referred to as the “grey list”. FATF gave Pakistan a 27-point action agenda, which was later increased to 34-points, related to money laundering, terrorist financing, and action against armed groups and individuals. If a country is put in the ‘grey list’, it becomes difficult for her to secure any funding that it may require for a variety of legitimate purposes. The nation is denied any aid from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European Union.
How Pakistan got out of the ‘Grey List’
Pakistan was on the grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018. To get out of the list, the nation Shebaz Sharif needed to secure the support of 12 out of 39 votes. It is said that after convictions of several members from terror outfits such as Lashkar-e-Taiba, Jamaat-ud-Dawa (JuD) and other groups, the path to exiting the list was opened up. However, one of the main reasons behind the development is said to be Pakistan’s improving ties with the US, especially after ouster of Imran Khan.