FeaturedNationalVOLUME 17 ISSUE # 50

Off the FATF grey list, at last

Pakistan is finally out of the Financial Action Task Force (FATF) grey list. The credit for this achievement goes to successive governments which worked tirelessly to fulfil the conditions set by the agency concerned to exit the list.

It was in 1989 that the FATF was set up to deal with the threat that the illegal flow of money posed to the banking system and financial institutions around the world. It is an inter-governmental body with international standards meant to prevent such illegal activities and their harmful consequences.

It needs mentioning here that Pakistan has been put on the grey list several times before. The country was put on the grey list for the first time in 2008 for not taking enough measures to restrain terror financing and money laundering. We exited the list in 2010, but were put on it again from 2012 to 2015. However, the country managed to exit the list on both these occasions. But successive governments later failed to follow up on earlier action to stop terror financing and apprehend wanted militant leaders.

Pakistan was again put on the grey list in 2018 for “deficiencies in its legal, financial, regulatory, investigations, prosecution, judicial and non-government sectors to fight money laundering and combat terror financing considered a serious threat to the global financial system”.

In June 2018, Pakistan solemnly committed to working with the Paris-based FATF and its Sydney-based regional affiliate Asia Pacific Group (APG) on Money Laundering to strengthen its AML/CFT regime and to address its strategic counter-terrorism financing-related deficiencies by implementing a 27-point action plan to accomplish the objectives. Another 7-point agenda was added to the action plan in June 2021. In 2001, the development of standards in the fight against terrorist financing was added to the mandate of the FATF. After 9/11, the watchdog issued “Eight Special Recommendations”. The FATF had to revise its standards in 2003, as money laundering evolved new techniques to sustain itself and proliferate.

Pakistan was given two action plans comprising 34 points that required it to bring in anti-money laundering and anti-terrorism laws in line with international standards. The country was also asked to take action against some militant groups and their leaders. The real threat was that if Pakistan did not take prompt action it could end up being blacklisted with dire consequences for the national economy. Therefore, the authorities from Pakistan cooperated closely with the FATF and its affiliates to strengthen its legal and financial systems against money laundering and terror financing to meet international standards in line with the FATF’s recommendations. For four long years, all government departments concerned in Pakistan worked hard to strengthen and expand the existing laws and to act more seriously to combat terror financing and money laundering to get the country off the hook. Ultimately, a series of well thought out reform measures by civilian governments and the security agencies helped smoothen the way out of the grey list.

Pakistan has exited the grey list but this does not mean that the danger is over and we should lower our guard. We must continue to be vigilant and ensure the continued enforcement of the action plan that saved us from being blacklisted. We should not forget that the menace of terror financing and militancy will return if we take it easy and allow the dark forces lurking in the shadows to strike again.

As we know Pakistan is situated in a geo-politically sensitive region in which the world powers have their strategic interests. India, our archenemy, is ever ready to take advantage of any weakness on our part and play its blame game with gusto. It is therefore important that we further strengthen our counter-terrorism mechanism to deal with future threats.

We have seen an alarming rise in militancy in Balochistan during the last one year. The return of militancy in Swat and in the former tribal districts is a warning signal we should not ignore. According to media reports, last month a group of militants fired at a school van in Swat, killing the driver. We must take serious notice of such incidents and adopt immediate remedial measures to nip the evil in the bud.