After four years, the Financial Action Task Force (FATF), a global watchdog on terror financing took Pakistan out of its “grey list” and welcomed its significant progress in improving its anti-money laundering, counter-terrorism measures.
“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,” it said.
How did the decision come about?
The FATF reviewed the Islamic nation’s progress since June 2022, and took a decision in its plenary held in Paris on October 20-21.
Pakistan and Nicaragua have been removed from the FATF’s Jurisdictions under Increased Monitoring list, often referred to as the ‘grey list’. See the full update on the list here➡️ https://t.co/OvPfPyeWPA #FollowTheMoney pic.twitter.com/7p7j9lzrIC
— FATF (@FATFNews) October 21, 2022
Addressing the press conference at the conclusion of its plenary, FATF president T Raja Kumar said that Pakistan has largely addressed all the 34 items flagged by the watchdog.
The nation still needs to continue to work in this regard and the FATF encourages it to cooperate with its Asia Pacific Group to combat financial terrorism and money laundering, he said.
What is FATF?
FATF is a global terrorist financing and money laundaring watchdog that sets international standards that aim to prevent these “illegal activities.”
It’s essentially a policy making body, who works to bring about national legislative and regulatory reforms in these areas.
As of now, over 200 nations and jurisdictions are committed to implementing the standards developed by them.
What happens when a country is in the FATF “grey list?”
According to the FATF, certain countries come under what it calls as “jurisdictions under increased monitoring,” or the “grey list.”
When a country is placed under it, it means that it has has committed to resolve strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.
FATF then continues to work with these jurisdictions as they report on the progress achieved in these areas. The watchdog calls on these jurisdictions to complete their action plans expeditiously and within the agreed timeframes. The FATF welcomes their commitment and will closely monitor their progress.
How has Pakistan reacted to this?
Pakistan Prime Minister Shehbaz Sharif said Pakistan’s exiting the FATF grey list was a “vindication of our determined and sustained efforts over the years”.
In a tweet, Sharif said, “I would like to congratulate our civil & military leadership as well as all institutions whose hard work led to today’s success.”
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. Aap sab ko bohat bohat Mubarak 🙂
— Shehbaz Sharif (@CMShehbaz) October 21, 2022
Sharif gave a special thanks to the role and efforts of Foreign Minister Bilawal Bhutto and Army Chief General Qamar Javed Bajwa for “putting a united front” to get the country out of the list.
Other than the prime minister, Pakistan’s Foreign Minister Bilawal Bhutto-Zardari congratulated the people of Pakistan from officially being removed from the grey list.
How has India reacted?
Reacting to this statement, External Affairs Ministry spokesperson Arindam Bagchi said that “as a result of FATF scrutiny, Pakistan has been forced to take some action against well-known terrorists, including those involved in attacks against the entire international community in Mumbai on 26/11.”
The world should remain clear, Bagchi added, that Pakistan must continue to take credible, verifiable and irreversible action against terrorism.
Our response to media queries on Pakistan and the FATF “Grey List”https://t.co/JDQQMeCMi2 pic.twitter.com/TxgCAQiRMJ
— Arindam Bagchi (@MEAIndia) October 21, 2022
“It is in global interest that the world remains clear that Pakistan must continue to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control,” Bagchi said on Friday.
“We understand that Pakistan will continue to work with the Asia Pacific Group on Money Laundering (APG) to further improve its Anti Money Laundering (AML) or Counter Terror Financing (CFT) system,” he added.
Read all the Latest Explainers here