The process of Pakistan’s removal from the Financial Action Task Force (FATF) grey list is a good omen and a sigh of fresh air as global inflation, Pakistan’s political situation, and other economic indicators continue to point to uncertainty.
Worryingly, as long as Pakistan remained on the FATF’s grey list, it faced a deficit of approximately $38 billion due to a lack of interest from foreign investors and other reasons for its inclusion in the gray list. The effects and implications can be stated.
Due to being on the grey list, international organizations and forums avoided the help of Pakistan is the biggest reason is that India made a great effort to push Pakistan from the grey list to the black list, but Pakistan, by the grace of God Almighty, managed to get out of all the conspiracies.
Had it not been for Malaysia, China and Turkey, India could have succeeded in declaring Pakistan a FATF blacklisted country. It should be noted that any country would need 3 votes to be blacklisted from grey.
In the recent past, the Indian Foreign Minister has admitted that he lobbied Pakistan not to be removed from the FATF grey list. Here it is important to understand that FATF has 2 aspects.
The first aspect is procedural, which means, that there are a number of FATF requirements that must be met. For example, Pakistan has completed the implementation of FATF points in the last 4 years. The FATF organization examines more than 200 requirements (parameters) under the Asia Pacific Group, while the other aspect is political or diplomatic.
These are the requirements under which it is decided to place or remove any country from the grey or black list of FATF. First, the FATF made Pakistan responsible for implementing 27 points and then put forward 7 more points. This brings the total number of points to 34 which needs to be implemented to get Pakistan off the grey list.
Out of all the 34 points, 2 points proved to be extremely difficult to implement as these points were related to other Pakistanis including Hafiz Saeed who was accused of terrorism, and then Pakistan also got good legislation to fulfill the conditions of FATF. However, since 2016, the FATF has required Security Council Resolution 1267 to not only arrest all individuals but also to seize the assets of all individuals and groups in addition to their sentences.
Pakistan made some laws to complete the implementation of the FATF terms and added amendments and strictures in some of them not only did Pakistan complete all the required legislation but also implemented new laws and amendments. And, of course, due to these difficulties, the difficulties of the people in dealing with banks increased many times over.
Some commercial groups have even set up private money transactions in their private premises, which are still being used in parallel with the banking system, keeping them secret from the government. Much of this money falls into the category of black money under the new legislation.
If any country in the world is included in the FATF’s grey list, other institutions, including the IMF, the World Bank, and the Asian Development Bank, avoid its assistance, and currently, 23 countries of the world are on the gray list of this organization.
The countries on the grey list include the United Arab Emirates, Jordan, the Philippines, and other major countries. In such a situation, the statement of the FATF chief that Pakistan has performed well to implement the points is a good sign.
The Asia Pacific Group submitted a report to the FATF on the implementation of the points only after a thorough review. Due to the weak role of the prosecution in the country’s judicial system, the number of convictions is low, which is part of the implementation of the FATF’s point that the conviction rate should be increased.
The question is who is responsible for all this positive situation? The team led by Secretary Finance, Secretary Law, Home Secretary, Foreign Secretary, Chairman NAB, Chairman FBR, FIA, ANF, SBP, and ISI all worked hard to solve all the problems.
The technical aspects are in place, however, the FATF has fallen it would be an exaggeration to ignore the efforts made on the political and diplomatic fronts to get off the list. We have the example of Foreign Minister Bilawal Bhutto Zardari’s foreign visits. The FATF was also involved in politics in the name of lobbying, which saved Pakistan from falling prey.
As for India, India has been hostile to Pakistan from the very beginning. The Narendra Modi government will make every effort to somehow prevent Pakistan from getting out of the grey list. However, Pakistan informally informed the 39 member countries of FATF that we have implemented all the points.
Another thing that is being examined here is the consistency in addition to the implementation of the points, ie how consistently and to what extent Pakistan continues to implement the above points. It is in Pakistan’s own interest not only to act on documents such as documentation, legislation and strict enforcement against crimes such as terror financing and money laundering but also to bring about further improvements if this whole situation can be improved.
Translated by: M.M. News Editorial Team
