Pakistan’s Progress towards Removal from The FATF’s “Grey List”

The fact that Pakistan has received assurances from the FATF of an on-site visit to verify the "implementation and sustainability of the country's money-laundering and counter-terrorism financing measures" before being formally removed from the task force's increased monitoring (grey) list is the best result we could have hoped for from the current review.

The global money-laundering and terrorist-financing watchdog announced at its recent Berlin plenary that Pakistan has substantially completed two action plans, complying with all 34 items, indicating that the “necessary political commitment to sustain implementation and improvement in the future” remains in place.

Once the on-site examination is completed in October, Pakistan should be removed from the grey list.

“Pakistan demonstrated that terror-financing investigations and prosecutions target senior leaders and commanders ofUN-designated terrorist groups and that there is a positive upward trend in the number of money-laundering investigations and prosecutions being pursued in Pakistan,” according to the watchdog.

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This evaluation of Pakistan’s attempts to get off the grey list is based mostly on the previous PTI government’s substantial work to fulfill two demanding action plans assigned to it for compliance to avoid being blacklisted at the same time.

However, it would be wrong not to acknowledge the coalition government’s use of diplomatic channels to assist the country’s removal from the list. According to sources, China has recently been discreetly assisting Islamabad on this front.

Many people feel that the decision is also a sign of unspoken US support. If this is correct, it suggests that we are getting closer to restoring the IMF rescue, even if we aren’t quite there yet. The country’s credit rating will increase once it is officially removed from the list, providing international investors more confidence.

Several acts taken in the previous four years would not have been feasible without the military’s approval, indicating that the army has remained supportive of civilian attempts to remove themselves from the list.

Last but not least, Pakistan’s case must have been bolstered by the conviction of outlawed Lashkar-e-Taiba head Hafiz Saeed on terrorism-related charges.

Despite the attempts of certain foreign powers to have Pakistan blacklisted, Pakistan’s achievement in satisfying FATF’s anti-money laundering and anti-terrorist-financing requirements in an unusually short time period should not make the authorities comfortable, as has been the case previously.

Since 2008, we’ve been on the grey list three times. Being relegated to the list would have irreversible consequences for the economy and international trade.

In the months and years ahead, it is hoped that the country’s civilian and military leadership will continue to demonstrate the highest level of political commitment to address the remaining flaws in the country’s AML/CFT regime, as well as to update and strengthen the relevant laws, regulations, and procedures.

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