Friday, January 27, 2023

Will FATF Blacklist Pakistan This Time For Terror Financing, Money Laundering?

The Financial Action Task Force’s (FATF) review meeting is going to be held in Beijing between January 21-24, 2020. In October 2019, Paris-based FATF  had issued a warning to Pakistan that the country could be blacklisted unless it fulfills an action plan against UN-designated terrorists operating from its soil.

Pakistan Claims Victory; Says India Could Not Get Us Blacklisted By FATF

A country is blacklisted by FATF when it fails to take steps against terror financing or money laundering. The FATF was set up in 1989 as an inter-governmental body to regulate terror funding, money laundering and other threats to the international financial system.

As per the FATF norms, Pakistan has to completely overhaul its financial network systems to strengthen its anti-money laundering/countering the financing of terrorism regime, or AML/CFT, regime. In simple words, it has to counter the terror outfits like Jamaat-ud-Dawah (JuD) and Lashkar-e-Taiba. JuD has been red-flagged by FATF which the terror watchdog officials and experts claim, is a charity front for terror group Lashkar-e-Taiba.

Pakistan Promises To Achieve All FATF Targets On-Time Including Terror Financing

On paper, Pakistan has to reply to a questionnaire comprising 150 queries sent by the intergovernmental body by 8 January 2020. These queries are mainly related to actions the Imran Khan government has taken against the madrassas that are affiliated to the terrorist outfits.

If Pakistan is blacklisted, this could lead to the freezing of capital flow to Pakistan, slow progress in refinancing/re-profiling loans from major bilateral creditors, and increasing headwinds from a weaker global economic backdrop.

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