Pakistan has failed the FATF test yet again and will remain on the terror watchdog’s grey list for some time yet. The country to the west of the Radcliffe Line has missed its exclusion from the Paris-based FATF (Financial Action Task Force) by a whisker.
Friday’s announcement that the country had complied with 26 of the 27 items listed in the action plan that was formalised in June 2018 is explicit on the point that it will remain on what they call the “increased monitoring list” ~ also referred to as the grey list ~ even after it addresses the remaining provision.
The decision is doubtless a setback for the government in Islamabad not the least because the global financial watchdog has imposed a new list of six action items on Pakistan which it said were identified by its regional partner, the Asia Pacific Group (APG), in 2019.
According to the FATF’s official statement, for Pakistan to be delisted, it will have to largely address all items in the new action plan in addition to the only remaining item in the original plan.
The country is fighting a losing battle against FATF whose decision has raised doubts on the integrity of the financial watchdog.
Questions have been raised in Pakistan over the rationale of retaining the country on the grey list when it had already implemented 26 of the 27 action plan items given by the FATF. Jamaat-i-Islami Central Vice President Mian Aslam suspected a global conspiracy behind the FATF decision and asked the government of Imran Khan to not surrender its freedom. Strident critics of the decision have called the entity a “tool weaponised against Pakistan”, indeed as “a tool of geopolitical pressure”. The official Twitter account of former President, Gen (retd) Pervez Musharraf, said the FATF was being used to “blackmail” Pakistan.
The provision that has not been addressed is a critical one though and relates to the need to demonstrate that terror-financing investigations and prosecution target “senior leaders and commanders of UN-designated terrorist groups”. In the reckoning of the FATF president, Marcus Pleyer, it is a pivotal issue that Pakistan must of necessity address. He said after the plenary meeting that there was a “high level commitment” by Pakistan to address “strategic deficiencies”.
In a message conveyed to Pakistan, the FATF authorities have asserted that the country’s delisting will happen only after it complies with all the items on the agenda in both the action plans. FATF has called upon Pakistan to strategically identify the deficiencies.
These include the imperative to demonstrate that assistance is being sought from foreign countries to implement counter-terror strategies. India has repeatedly emphasised on the need to implement UN resolutions and targeted sanctions against UN designated terrorist individuals and entities. Delinking Pakistan from money laundering and terror financing is still a long way away.