FATF to keep Pakistan in 'grey list' as Turkey, Malaysia extend support; decision comes week after Hafiz Saeed's conviction

FP Staff

The Financial Action Task Force (FATF) is likely to keep Pakistan in the grey list and not put it in the black list, reports said on Tuesday. Earlier in the day, the global terror financing watchdog held a review meeting on whether Pakistan had taken sufficient steps and implemented its plan of action to fight terrorism.

In the meeting, Turkey and Malaysia supported Pakistan, ANI reported. Pakistan submitted a report on the action taken by it based on the FATF's guidelines to curb terror financing in the Paris meeting of the International Co-operation Review Group (ICRG), a part of the global watchdog.

More than 800 representatives from 205 countries and jurisdictions around the world including the IMF, UN, World Bank, and other organisations, took part in the meeting, ANI reported.

The FATF had in 2018 placed Pakistan on the grey list and had asked it to comply with 27 points related to anti-money laundering and counter-terrorist financing actions. The watchdog had also already granted Islamabad an extension till February 2020 during a meeting in October last year.

The FATF's Asia-Pacific Group's meeting, which took place in Beijing in October 2018, analysed Pakistan's situation from a technical point of view. China, which took over as the chair of the inter-governmental organisation since July 2019, expressed satisfaction over the "visible progress" made by Islamabad, leading to speculations that it could be put in a "white" list from "grey" list, according to Pakistan media reports.

The body had warned that Islamabad would be put on the blacklist if it did not comply with the remaining 22 out of 27 points to curb terror financing.

The FATF plenary held in October 2019 had noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba, Jaish-e-Mohammad and Hizbul Mujahideen, responsible for a series of attacks in India. The FATF had said it strongly urges Pakistan to swiftly complete its full action plan by February, 2020.

On Tuesday, the watchdog was scheduled to issue a decision on whether Pakistan had taken sufficient steps to avoid being "blacklisted."

In the case of black-listing, Pakistan would face isolation from the international banking system, introducing stricter checks and safeguards on transactions involving the country.

On 12 February, a week before Tuesday's meeting, a Pakistan court sentenced Jamat-ud-Dawah (JuD) chief Hafiz Saeed, the mastermind of the 2008 Mumbai attack and founder of LeT, to 11 years in prison in two terror financing cases.

Defence experts in New Delhi opined that Saeed's sentencing, just days ahead of the FATF meeting in Paris is "just an eyewash" to delude the international community and that the terrorist will be released shortly after the watchdog announces its decision.

Last year, under pressure after the FATF review, Pakistan formally banned Saeed's JuD and other associated organisations, after years of allowing them to operate freely across the country.

Saeed, a UN-designated terrorist on whom the US has placed a $10 million bounty, was arrested on 17 July, 2019 in the terror financing cases. The 70-year-old fiery cleric is lodged at the high-security Kot Lakhpat jail in Pakistan. Pakistan has also recently informed FATF that JeM founder Masood Azhar and his family are "missing".

Pakistan has claimed that there were 16 United Nations (UN) designated terrorists in Pakistan, of which "seven are dead".  Out of the nine who are alive, seven had applied to the UN for exemption from financial and travel restrictions.

Pakistan needed 12 out of 39 votes to exit the 'Grey List' and move to 'White List'. To avoid 'Black List', it needs support of three countries. In last month's FATF meeting in Beijing, Pakistan has got the support of Malaysia and Turkey besides FATF current chair, China. In the Beijing meeting, Pakistan provided a list of its action taken to comply with FATF directions.

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.

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.

If Pakistan continues with 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 inputs from agencies

Also See: Tayyip Erodgan says will oppose Pakistan blacklisting at FATF, Kashmir matter of concern to both New Delhi and Islamabad

FATF says several terror groups continue to get funds from supporters despite anti-terror financing watchdog tightening control on flow of money

Hafiz Saeed sentenced to 11 years imprisonment in two terror financing cases by Pakistan anti-terrorism court

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