- Pakistan is expected to be taken off the Financial Action Task Force grey list at the global watchdog body’s plenary session in Paris this week, although it will be asked to update members on its actions to counter terror financing and money laundering on a regular basis, in a decision that India will monitor closely.
- The final decision on Pakistan, which has faced stringent financial sanctions and difficulties in availing international loans as a result of the FATF grey list, or “jurisdictions under increased monitoring” list since February 2018, will be announced at the end of the two-day session on October 20 – 21.
- Minister of State for Foreign Affairs Hina Rabbani Khar landed in Paris on Tuesday to lead the Pakistani delegation and to iron out any last-minute wrinkles.
- A reprieve from the grey list will come as a major relief for Pakistan that is in the midst of an economic crisis, and is believed to also reflect an improvement in ties between Islamabad and Washington
- In Islamabad, the Dawn newspaper reported that officials believed that the government’s “strenuous efforts” and “a smooth and successful visit” on-site by an FATF delegation to Islamabad and Lahore last month had ensured a favourable outcome at the plenary session.
- However sources said that even after Pakistan is cleared to exit the grey list, it will be subject to continued scrutiny by the FATF, and will need to regularly report on its actions to continue the steps it has taken on Anti Money Laundering and Combating the Financing of Terrorism.
- The FATF is also expected to take up China’s follow-up of its evaluations, as well as Western proposals to suspend Russia from the FATF participation due to the war in Ukraine.
Financial Action Task Force (FATF)
- The FATF is an inter-governmental body that sets international standards seeking to prevent international financial crimes that aid terrorism.
- The FATF was established in July 1989 by a G-7 Summit in Paris, initially to examine and develop measures to combat money laundering.
- After the 9/11 attacks, the FATF in October 2001 expanded its mandate to incorporate efforts to combat terrorist financing.
- In April 2012, it added efforts to counter the financing of proliferation of weapons of mass destruction.
- The FATF has developed the FATF Recommendations, or FATF Standards, which ensure a co-ordinated global response to prevent organised crime, corruption and terrorism.
- Over 200 jurisdictions around the world have committed to the FATF Recommendations through the global network of nine FATF-Style Regional Bodies (FSRBs) and FATF memberships.
- The FATF currently comprises 37 member jurisdictions and two regional organizations (European Commission and Gulf Cooperation Council), representing most major financial centers in all parts of the globe.
- India has been a member of the FATF since 2010.
- India is also a member of its regional partners, the Asia Pacific Group (APG) and the Eurasian Group (EAG).
Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.
Lists under FATF:
- Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list.
- This inclusion serves as a warning to the country that it may enter the blacklist.
- Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities.
- The FATF revises the blacklist regularly, adding or deleting entries.
- Currently, Iran and Democratic People’s Republic of Korea (DPRK) are under High-risk Jurisdiction or black list.
SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB