A top diplomat of the United States on Friday said not meeting the obligations of the Financial Action Task Force or FATF will have a devastating impact on Pakistan’s economic reform program.

The remarks were made by Acting Assistant Secretary of State for South and Central Asia Alice Wells after Pakistan Foreign Minister Shah Mahmood Qureshi said his country “should, in principle, be taken off the grey list” as it has made “considerable progress” on the requirements of the global watchdog for terror financing.

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“Obviously, if Pakistan were not to meet FATF obligations or were to fail and be blacklisted, that would be devastating for Pakistan’s economic reform program and for its ability to attract investors,” Wells was quoted as saying by PTI.

“We have been pleased to see progress by Pakistan towards fulfilling FATF obligations,” said Wells, who has just returned from her trip to the region, including a visit to Islamabad.

She was responding to a question if the funding by the International Monetary Fund could get affected if Pakistan does not meet the FATF regulations or the rules.

“There is a meeting underway currently in Beijing where Pakistan is presenting its actions to the task force. So I defer to that task force to make its evaluation,” she said.

“But the more evidence of Pakistan’s seriousness in both documenting its economy and in shrinking the space for militants to be able to take advantage of Pakistan’s either banking system or territory, the more confidence that the international community and business community will have in working with Pakistan,” Wells said.

Observing that FATF is a technical process, Ms Wells said that there has been an action plan that was presented to Pakistan.

“It’s a question of fulfilling the requirements that have been spelled out and that are asked of all countries in the international system. So it’s not a political process, but we certainly support and stand ready to assist Pakistan as it implements these obligations,” she added.

The US, she said, welcomes efforts by Pakistan to meet its counter-terrorism financing obligations under FATF.

“We strongly encourage Pakistan to work with FATF and the international community to fully satisfy its action plan commitments,” she said.

Completion of the FATF action plan is critical to Pakistan’s economic reform efforts, including its IMF program, as well as for demonstrating sustained and irreversible action against all militant groups based in Pakistan without distinction, she added.

“We’ve seen obvious progress in our relations with Pakistan, from the high-level engagement such as the President’s (Donald Trump) warm and constructive meeting with Prime Minister (Imran) Khan at Davos to the restoration of the International Military Education and Training programs,” she said.

In February, Pakistan is looking to get off FATF’s grey list, on which it was placed in 2018 after the body decided that the country had failed to take enough measures to curb money laundering and terror financing.

A Pakistani delegation led by Minister for Economic Affairs Division Hammad Azhar is in Beijing to brief the financial task force about the steps taken by Islamabad to implement the recommendations made by the FATF.

The anti-terror financing body had, in October last, warned Pakistan of strong action if it fails to take measures on terror financing and money laundering by February 2020.

Strongly urging Pakistan to swiftly complete its full action plan by the next Plenary in February 2020, the global watchdog for terror financing asserted that in an otherwise situation, it would take action including urging members to advise their financial institutions to give special attention to business relations/transactions with Islamabad.

During its crucial plenary meeting in Paris, the FATF decided to put Pakistan on its “grey list” till February 2020 and directed Islamabad to take “extra measures” for “complete” elimination of terror financing and money laundering.

Meanwhile, it is being reported that the France-based organisation is ‘satisfied’ with Pakistan’s efforts to crack down on terror funding and money laundering and may remove it from the punitive “grey list” in its upcoming review meeting.

Pakistan has gained support from the United States and other western countries at a meeting of the Asia Pacific Joint Group of the Financial Action Task Force (FATF) in Beijing on Wednesday.

FATF’s upcoming plenary meeting in February will be held in Paris where Pakistan is likely to make a case for its exclusion from the grey list. To achieve that, it needs 12 votes out of a total of 39. It needs only three to avoid falling into the FATF blacklist.

The news comes after Pakistan Prime Minister Imran Khan met United States President Donald Trump in Davos this week where the two leaders also discussed India’s recent policy changes for Kashmir.

(With PTI inputs)