Pakistan, For Now, Averts Being Blacklisted by Terror-Funding Watchdog

By Ayaz Gul October 18, 2019

A global agency leading the fight against the funding of terrorism and money laundering has urged Pakistan to address terrorist financing-related deficiencies by February or face punitive action.

The Paris-based Financial Action Task Force (FATF) issued the warning Friday at the conclusion of its five-day plenary meeting where it assessed, among others, Pakistan's commitments under an action plan agreed to with the international agency.

"To date, Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan," it noted.

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," it stressed.

The international agency elaborated possible punitive action could include the FATF calling on member countries and urging all jurisdictions to give special attention to investment-related business relations and transactions with Pakistan.

"Pakistan needs to do more and it needs to do it faster," FATF president Xiangmin Liu told reporters in Paris.

The FATF placed Pakistan on its "gray" list of countries in June 2018, citing lack of proper controls over anti-money laundering and terrorism financing.

Friday's decision means the country will continue to remain on the "gray" list and averted, though temporarily, the risk of being blacklisted along side Iran and North Korea.

The blacklisting would have led to tough banking sanctions and economic setbacks on an already troubled Pakistani economy already facing a balance of payments crisis.

"The FATF is giving this very clear warning that if the country has not made significant progress (by February) we would consider further actions, which potentially include placing the country on the public statement (of high-risk jurisdictions), often refer to as a blacklist," Liu warned.

Pakistan has repeatedly blamed rival India for lobbying to blacklist it. However, officials in Islamabad are reported as saying vital support from friendly countries, including Pakistan's staunch allies China, Turkey and Malaysia, played a key role in helping Islamabad avert being moved to the FATF's blacklist.

The Pakistan Finance Ministry, while responding to Friday's decision, noted that its delegation at the FATF meeting re-affirmed the country's political commitment to fully implement the action plan. "The plenary meeting decided to maintain status quo on the FATF action plan," local media quoted the ministry as saying in a statement.