FATF COMES DOWN HARD ON PAK, CITES ONLY LIMITED ACTION

NEWDELHI: Pakistan’s efforts to get off the watch list of the Financial Action Task Force (FATF) suffered a setback on Friday with the multilateral watchdog saying the country had made “limited progress” in curbing terror financing and failed to show proper understanding of risks posed by banned groups such as Jaish-e-mohammed (JEM) and Lashkar-e-taiba (LET).

At the conclusion of its plenary meeting in Paris, FATF condemned the February 14 Pulwama terror attack that killed 40 Indian paramilitary troopers and said such strikes cannot be carried out without the illicit transfer of funds between terror supporters.

India has pushed FATF to keep up the pressure on Pakistan following the Pulwama attack, which was claimed by JEM. French officials said last week Paris will work with New Delhi to ensure Pakistan remains on the watch list.

Pakistan has to implement a 27-point action plan by September to be taken off FATF’S “grey list”, in which it was included last June.

After that, FATF will decide whether to remove it from the grey list or to put it in a “black list,” which will entail harsher sanctions and greater scrutiny of financial transactions.

Experts said even a positive assessment at Paris would have resulted in Pakistan’s remaining in the grey list.

Pakistan’s continued presence on the grey list makes it harder for its government to access international markets at a time when the country’s economy is faltering.

While there are no direct legal implications, the listing brings extra scrutiny from regulators and financial institutions that can hit trade and investment.