Pakistan may be put on FATF watchlist in June

ISLAMABAD/KARACHI: Pakistan will be placed back onto an international terrorism-financing watchlist from June, according to a person with direct knowledge of the matter, a move that may hinder the country’s access to financial markets.

The move follows a push from the US, UK, France and Germany to get Pakistan placed on the Financial Action Task Force’s “grey” monitoring list during a review meeting in Paris this week.

China, which is financing more than $50 billion of infrastructure projects across Pakistan, removed its earlier objections to the move, said the person, who asked not to be identified as the discussions are private. Saudi Arabia too removed its objections, while Turkey alone backed Pakistan, a person familiar with the matter told Hindustan Times.

Pakistan’s benchmark stock index reversed earlier gains and fell 0.6% at the close in Karachi.

A statement from FATF after the Paris meeting on Friday made no mention of Pakistan. Technically, the South Asian nation has three months to convince the body that it has acted against terror organisations, though it will be difficult for them in practice, the person said. Earlier this week, foreign minister Khawaja Muhammad Asif said no consensus had been reached to put Pakistan on the list and that the nation had been given a three-month “pause.” Officials at Pakistan’s finance ministry couldn’t immediately comment.

The move is the latest attempt to get Islamabad to take more action against terror groups that allegedly have support and sanctuary within Pakistan.

Relations with the US have deteriorated drastically in the past year and in his first tweet of 2018, President Donald Trump said Pakistan gave “lies and deceit” in return for American funding.

FATF removed the nucleararmed nation after three years in 2015 from a list of countries which are subjected to regular monitoring.