Pakistan stays on global terrorism financing 'grey list'

Pak has been unable to comply with six of the 27 points in the global terror financing and money laundering watchdog's action plan

The Financial Action Task Force (FATF) on Friday refrained from blacklisting Pakistan and instead decided to keep it on the “grey list” for a few more months even as the South Asian nation failed to completely plug the loopholes in its legal mechanism to detect and stop the flow of funds to terrorist organizations.

The FATF, which held its plenary this week, noted that the Pakistan Government had made progress in implementing 21 of the 27 measures prescribed by the intergovernmental organisation, which coordinates global efforts to check the flow of funds to terrorist organizations and money laundering.

The organization decided to give Imran Khan’s government in Islamabad time till February 2021 to implement the six remaining measures.

The six points, which Pakistan Government failed to act upon, included the implementation of targeted financial sanctions against individuals and entities designated as terrorists and terrorist organizations by the United Nations Security Council, like Masood Azhar, Zaki ur Rahman Lakhvi and Dawood Ibrahim.

“The FATF takes note of the significant progress made on a number of action plan items. To date, Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items,” the intergovernmental organization said in a statement released at the end of the virtual plenary. “As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its action plan by February 2021.”

“Pakistan needs to do more on checking terror funding, it cannot stop now,” Marcus Pleyer, the president of the FATF, said at a virtual press conference from Paris. He said that the organisation would send a team for “onsite visit” once Pakistan Government would comply with the remaining six action points prescribed by it. A decision on removing it from the grey list would be taken after the FATF would study the report submitted by its team following the visit.

The FATF in 2018 put Pakistan in its “grey-list” – officially a list of “jurisdictions with strategic deficiencies in its legal regime to check money laundering and terrorist financing”. The Government of Pakistan and the FATF by June 2018 agreed on an action to plug the loopholes.

The FATF had in October 2019 set February 2020 as the deadline for Pakistan to deliver on its promises to plug the loopholes in its legal framework to squeeze flow of funds to the terrorist outfits. The intergovernmental organization warned that if Prime Minister Imran Khan’s Government failed to deliver on its commitment, Pakistan might be put on its “black-list” - officially the list “jurisdictions with strategic AML / CFT (Anti Money-Laundering and Countering Financing of Terrorism) deficiencies for which a call of action applies”.

But even as Pakistan failed to fully implement the June 2018 action-plan, the FATF plenary in February this year decided against putting the country on the “black-list” and give it time till the next plenary. Pakistan got another reprieve in June when the FATF extended all deadlines till this month in view of the Covid-19 pandemic.