JEE News reported that the Financial Action Task Force (FATF) has announced the removal of Pakistan from its gray list, appreciating the country’s efforts in anti-money laundering and counter-terrorism financing.
The Financial Action Task Force has unanimously decided that Pakistan has met all the substantive, technical and procedural requirements of both the 2018 and 2021 Action Plans. As a result, Pakistan has been removed from the list of jurisdictions under increased surveillance, immediately.
The decision was taken during the FATF Plenary Session to be held in Paris, France from 20 to 21 October 2022. Minister of State for External Affairs/Chairperson of National FATF Coordination Committee Ms. Hina Rabbani Khar led the Pakistani delegation in the FATF Plenary.
Pakistan has made significant progress in the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) domain while meeting the requirements of both Action Plans. Despite many challenges, including the CoVID-19 pandemic, Pakistan continued the momentum of reforms and maintained a high-level political commitment to align its domestic AML/CFT regime with international best practices.
Achieving the goals of FATF was a nation-wide effort. A number of ministries, departments and agencies at both the federal and provincial levels contributed to the achievement of this national goal. Engagement with the FATF has led to strategic improvements in Pakistan’s laws and procedures, making its domestic AML/CFT regime more resilient to current and future challenges.
What is FATF?
To simplify things, the FATF has three main objectives:
- To prevent money laundering
- To stop the financing of terrorism
- To counter the financing of weapons of mass destruction
What is FATF Gray List?
Graylisting a country by the FATF means that it is placed under increased scrutiny to monitor its progress on anti-terrorist financing and anti-money laundering measures.
Countries should then step up efforts and take steps to remove the subject from the unwanted watch list.
Pakistan has had a complicated relationship with the FATF, and this is not the first time the country has found itself on the gray list.
Pakistan was included in the undesirable list three times. We were first listed in 2008 but were removed in 2012. FATF placed Pakistan on the gray list again in 2012 but it was removed in 2015. However, the third term that started in 2018 has been Pakistan’s longest. FATF Gray List.
Below are Some of Effects Greylisted Causes:
- Donor organizations like the World Bank and the IMF are reluctant to provide any kind of financial assistance.
- The economy begins to shrink as investors are reluctant to invest in a country with a weak economy.
- Lack of investment causes bearish trends in the stock market.
- The local currency starts to lose its value, leading to inflation, increasing the trade deficit.
- Trade suffers because other countries avoid engaging with gray-listed countries.
