The Financial Action Task Force (FATF) has decided to keep Pakistan on its grey list until June 2021. This has been the fourth time Pakistan has been given an extension and has said to have made ‘significant progress’ but there are still ‘serious deficiencies’ in curbing terror financing.
Pakistan was handed a 27-point action plan by the global watchdog and has largely addressed 24 of them. This is a huge achievement but Pakistan has to complete the plan to get off the list. Pakistan must improve investigations and prosecutions of all groups and entities financing terrorists and show that the penalties imposed by the courts are effective and all UN-designated terrorists are sanctioned.
The FATF took note of the significant progress made on the entire action plan. FATF President Dr Marcus Pleyer clarified that it was not an investigative organisation and only assesses the entire system of money laundering and terror financing rather than individual incidents. Despite overcoming challenges including the coronavirus pandemic and tough deadlines, the FATF is still demanded Pakistan to do more before it is removed from the list which had hampered growth and investments.
The FATF president, however, noted that this is not the time to put the country on the blacklist. This is a sigh of relief for the government knowing that blacklisting Pakistan is no longer a possibility. Hammad Azhar, who has led the implementation of the action plan, said Pakistan will send a strong message that its financial systems are compliant with international standards and vowed to complete the plan.
The government appears confident that it will implement the action plan but the challenges remain. A report states that Pakistan faced an economic loss of $38 billion due to frequently being placed on the grey list from 2008 to 2019 which also lowered exports and Foreign Direct Investment (FDI). Pakistan was forced to reduce expenditures which eventually impacted the nation’s development.
It is imperative that Pakistan makes efforts to come out of the grey list as it leads to massive economic losses which Pakistan cannot afford. In 2019, Pakistan faced staggering losses of $10.31 billion and the impact continues. Pakistan has thwarted Indian attempts and escaped a blacklist and is now nearly at the end of the tunnel to finally escape the sanctions and embark on the path to being a progressive country.
