European Union (EU) has welcomed the progress made by Pakistan in the implementation of the Financial Action Task Force (FATF) and its commitment to continue the engagement with the corruption watchdog to address all of the remaining issues.
The government is anticipating substantial relief for Pakistan in the Financial Action Task Force’s upcoming plenary meeting. The official statements give the impression that Pakistan is successfully approaching full compliance with most FATF recommendations.
Regardless of all the positives, the question still remains that will Pakistan be removed from FATF’s ‘Grey List’? Let’s take an in-depth review of the Pakistan’s efforts to implement FATF’s 27-point action plan.
Implementation of 27-point action plan
The FATF’s International Cooperation Review Group (ICRG) prepared a preliminary report on the progress made by Pakistan on the implementation of 27-point action plan and will present it in the plenary meeting being held from June 21 to 25.
According to sources in the Ministry of Finance, Pakistan’s progress was reviewed at a virtual meeting of the ICRG by international observers on Tuesday. The group includes China, USA, UK, France and India.
Sources have claimed that Pakistan has implemented 26 of the 27-point FATF Action Plan. They said, “There is partial progress on the point of conviction. Relevant laws have been amended in this regard. Therefore, it is hoped that there will be good news for Pakistan at the FATF’s Plenary Session starting from June 21.”
However, sources said that in view of the US withdrawal from Afghanistan, Pakistan is likely to remain on the grey list as it would require two to three more months to implement the remaining one point.
Sources said that the situation is likely to change further by September when the US withdraws its troops from Afghanistan and due to Pakistan’s best strategy, the influence of FATF is expected to be diminished.
Pakistan on grey list and last plenary meeting
The Paris-based FATF had placed Pakistan on the grey list in June 2018, telling Islamabad to implement a 27-point action plan to curb money laundering and terror financing by the end of 2019. However, the deadline was extended due to the coronavirus pandemic.
Until the last review, Pakistan was found poor in acting against the organizations allegedly associated with the terror groups listed by the UN Security Council, tackling the smuggling of narcotics and precious stones and prosecuting and convicting proscribed individuals.
In February, the FATF gave fourth extension to Pakistan to fully implement a 27-point action plan and “strongly urged” it to meet the remaining three conditions about terror financing investigations and the United Nations Security Council resolutions.
Against the government’s hopes of exiting the grey list, the FATF plenary found the country’s progress on three out of remaining six points less than satisfactory. Pakistan would remain on the grey list till June 2021, a statement issued by the FATF from Paris said.
Will Pakistan be removed from FATF’s ‘Grey List’?
Pakistan will have the opportunity to put forward the ICGR report in the upcoming FATF’s plenary meeting where two factors could play a vital role in support of Pakistan from getting removed from the ‘Grey List.
First, that Pakistan is on a road towards improvement, as it already has implemented two out of three remaining points, and the second that the geopolitical situation in Asia is seemingly in favor of Pakistan where recently we saw a withdrawal of US troops from Afghanistan.
FATF’s next review session comes amid speculation that the US is trying to get Pakistan’s airbases on its soil after American soldiers exit Afghanistan. It is unlikely that FATF will remove Pakistan from the grey list on the basis of performance alone.
