FATF asks Pakistan to tighten laws against terror financing, keeps it in grey list

A global terror financing watchdog has asked Pakistan to further tighten its laws to bring individuals involved in money laundering and terror financing to the task, media reports said on Tuesday. The International Cooperation Review Group (ICRG), a sub-group of the Financial Action Task Force (FATF), evaluated the performance of Pakistan during its ongoing meeting in Paris which would continue until February 21.

"The FATF has expressed satisfaction over the steps taken by Pakistan to curb terror financing and demanded that the country further tightens its laws to bring individuals involved in money laundering and terror financing to task," The Express Tribune newspaper reported.

Citing the recent conviction of Mumbai attack mastermind and Jamat-ud Dawa chief Hafiz Saeed, the Pakistani officials said that the judicial system in the country was fully independent and the courts were taking decisions on merit, which were being implemented. The Paris-based FATF observed substantial progress made by Pakistan in the implementation of 14 of the 27 recommendations about the country's anti-money laundering and combating financing of terrorism (AML/CFT) mechanism, Dunya News TV reported.

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"Pakistan has adopted an effective strategy in the financial sector to curb terror financing and enhanced cooperation between institutions to combat transfer of funds to terrorists," it reported. The meetings of Paris-based FATF began on Monday but the plenary session, which will decide whether to keep Pakistan on the grey list, begins on Wednesday.

Pakistan on 'grey list'

The Financial Action Task Force (FATF) has decided to keep Pakistan in the grey list on Tuesday over the country's failure to show an improvement in terror financing and money laundering. The decision was taken after a week-long FATF plenary that examined money laundering and terrorist financing risks that countries face to set and promote global standards to tackle these risks. Pakistan was placed in the great list back in 2018 and feared being pushed into the black list. 

Pakistan was placed on the 'grey list' by the FATF in June 2018 and was given a plan of action to complete it by October 2019 or face the risk of being placed on the 'black list' along with Iran and North Korea. Pakistan needs 12 votes out of 39 to exit the 'grey list' and move to 'white list'. To avoid 'black list', it got the support from the three countries- China, Malaysia and Turkey. 

In the previous FATF review held in October, it was found that while Pakistan has made significant improvements, but it will have to take "extra measures" for "complete" elimination of terror financing and money laundering.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF currently has 39 members including two regional organisations -- the European Commission and Gulf Cooperation Council. India is a member of the FATF consultations and its Asia Pacific Group. With Pakistan on the grey list, it will be difficult for the country to get financial aid from the IMF, World Bank, ADB and the European Union, thus further enhancing problems for the nation which is in a precarious financial situation.

(With PTI inputs) 

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