FATF tells Pak: Act fast or get blacklisted

The Financial Action Task Force (FATF) on Friday made it clear to Pakistan that it is running out of patience and Islamabad needs to act fast to complete the action plan given to it to curb terror financing by February 2020, else it faces the potential to be blacklisted.

“Pakistan needs to do more and needs to do it faster. The FATF is giving this very clear warning: if by 2020 the country has not made significant progress we would consider further actions,” said FATF president Xiangmin Liu at a press conference at Paris on Friday, the last day of the FATF Plenary. Mr Liu, who is from China, added those “action” include placing Pakistan in the Blacklist.

Pakistan was placed on the Grey List by FATF in June 2018 and was given a plan of action to complete by October 2019, or face the risk of being placed on the Blacklist along with Iran and North Korea.

“All deadlines in the action plan have now expired,” FATF said while expressing serious concerns with the ■

overall lack of progress by Pakistan to address its terrorist financing risks and on “Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the terrorist financing risks emanating from the jurisdiction.”

During the mutual evaluation process, Pakistan was found to lagging in most of the areas it was tasked to address. “To date, Pakistan has only largely addressed 5 of 27 action items, with varying levels of progress made on the rest of the action plan. The FATF strongly urges Pakistan to swiftly complete its full action plan by February 2020. Otherwise, should significant and sustainable progress not be made across the full range of its action plan by the next plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdictions to advise their FIs to give special attention to business relations and transactions with Pakistan,” the FATF said. The message was clear that Pakistan may have escaped being Blacklisted this time, its business with the world will be impacted soon.

The action plan includes identifying and cracking down on terror financing, boosting controls on illicit currency movement including hawala and increase prosecution. Pakistan also has to ensure that all sources of fund raising, included religious methods, must dry up completely.

India has been lobbying hard to get the country blacklisted following constant terror attacks from groups like the Lashkar-e-Taiba and Jaish-e-Mohammad operating from Pakistan. India has argued that these terror groups have financial backing of the establishment and the aid money sent to Pakistan by developed nations is redirected towards terror funding.

The international funding agencies were wary that moving Pakistan to the Blacklist could impact IMF’s $6 billion bailout programme. However, with pressure mounting on FATF to crackdown on Pakistan, the global watchdog made public its decision that Pakistan may not get another chance after February 2020.

The announcement was also an indirect message for the international funding agencies to prepare for the eventuality in February 2020. Once in Blacklist, Pakistan will have trouble accessing international financial aid from the world bodies like World Bank, International Monetary Fund and the European Union.

“It was unanimously decided to express serious concern with overall lack of progress in addressing its transnational terror funding risks. It was again decided by consensus that FATF would retain Pakistan on the Grey List and warn Pakistan that if it did not complete its full action plan and show significant and sustainable progress action will be taken,” said an official privy to the development.