Pakistan remains on FATF’s ‘gray list’

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Photo caption,

Imran Khan

The Financial Action Task Force (FATF) has decided to keep Pakistan on the gray list for failing to curb funding for extremist activities.

The FATF’s 30-day virtual meeting began on Wednesday (October 21). A decision on Pakistan was taken on Friday. The meeting was held online due to Corona’s partner.

Due to the FATF decision, Pakistan will remain on the gray list till February 2021. Pakistan will remain on the gray list until it meets the six conditions of the FATF

This year’s meeting reviewed Pakistan’s success in curbing funding and money laundering by fundamentalists.

For the past few days, the meeting and Pakistan’s preparations for it have been the focus of attention of many countries, including India.

At the FATF meeting in February 2020, Pakistan was able to meet only 14 of the 27 conditions. Pakistan was given four months to meet the remaining conditions.

The FATF had said that on this basis, it would be decided whether Pakistan would be included in the gray list or the black list.

The Asia Pacific Group (APG) issued a report on October 11. He had put Pakistan on the reserved follow-up list.

The APG’s decision was prompted by its failure to stop funding to curb economic malpractices and extremism in Pakistan.

Pakistan had tried to comply with 27 conditions, including enacting 15 laws to curb terror funding, the report said. But some things were not acted upon at all. Therefore, the FATF was not satisfied with the measures taken by Pakistan.

Earlier, Pakistan had met 21 of the 27 conditions 100 per cent. Pakistan is working to meet the other six conditions, Foreign Minister Shah Mehmood Qureshi had said.

What is FATF? How does this organization work?

FATF is an international organization. It was established in 1989 at the initiative of the G-7 countries. The organization is headquartered in Paris.

The main objective of the FATF is to develop policies to combat money laundering worldwide. It was aimed at curbing extremist funding following the attack on the World Trade Center.

The FATF had put Pakistan on the gray list in June 2018. He was placed on the gray list for allegedly providing financial support from Pakistan to organizations responsible for spreading extremism around the world.

Pakistan immediately began cracking down on extremist groups. Raided their bases. The action against Jamaat-ud-Dawa and its associates is an example of this.

Hafiz Saeed, the leader of Jamaat-ud-Dawa, was arrested in July 2019. Hafeez was also tried in December. Hafiz Saeed had been arrested and released several times before.

India had reacted cautiously after the arrest of Hafiz Saeed. Hafeez was earlier arrested in 2008-2009 on charges of involvement in the 26/11 attacks in Mumbai. But then he was released.

What is a gray list?

The group that Pakistan has been placed in by the FATF is called the gray list. The list currently includes 18 countries.

Funding for fundamentalists and the types of financial malpractices that occur most often are included in this list. These countries are ready to work with the FATF to prevent this.

Photo caption,

Hafiz Saeed

Institutions such as the FATF-affiliated APG monitor the countries concerned. The country is being monitored to see how serious it is about curbing funding for extremists and money laundering.

Similar to APG, various organizations work in Europe, America and other countries.

There is a black list just like the gray list. In this, these countries are not keen to work against giving money to fundamentalists. The countries say the allegations against them are completely false and baseless. They are not trying to get out of these allegations.

Iran and North Korea are still on the FATF’s blacklist.

How important is it for Pakistan to get out of the gray list?

Pakistan has been accused of providing financial support to extremist groups for over 2,000 years.

Pakistan wants to get off the list as soon as possible, said Shah Mahmood Qureshi.

Earlier, between 2013 and 2016, Pakistan was on the gray list.

They were later removed from the gray list for satisfactory performance.

Being on the gray list is adversely affecting Pakistan’s foreign investment. It is also affecting the ability to borrow from international institutions such as imports, exports, the IMF and the ADB.

Pakistan’s economic situation is largely dependent on foreign aid. So considering all these issues, being on the gray list is dangerous for them. Being on the gray list also poses a number of challenges in e-commerce and digital financing.

What has Pakistan done so far to get out of the gray list?

At a meeting in February this year, Pakistan said it had met only 14 of the 27 conditions.

But in September, several bills were introduced and passed in Pakistan’s parliament to curb money laundering and extremist funding.

Pakistan has made anti-extremism legislation strict and strong in accordance with UN Security Council rules.

In addition, in some places, the oversight of the administration of public welfare institutions and the oversight of financial transactions have been increased. This whole process has been made even tougher by Pakistan.

Attempts at diplomacy

At present, Pakistan needs the support of at least 12 of the 39 members to be removed from the gray list.

India and other allies are trying to blacklist Pakistan.

On the other hand, according to Pakistan’s allies, Pakistan, despite its limited resources, seems to be trying its best to fight the extremists. Therefore, they should be removed from the gray list.

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