ISLAMABAD: Pakistan has sent Adviser to Prime Minister on Finance Dr Miftah Ismail to plead its case at the ongoing session of the Financial Action Task Force (FATF) that is taking up a US-sponsored resolution to put Islamabad on a list of countries that financially aid terrorism.
Ismail left for Paris at the weekend to attend the FATF meetings, said officials of the Finance Ministry. The decision to send the adviser was taken abruptly.
According to the original plan, the Director General Financial Monitoring Unit, a joint secretary-level official of the Ministry of Finance and representatives from the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) were to represent the country.
Just a day before his departure for France, the adviser had returned from a weeklong visit of Europe where he had gone to convince the FATF member countries about the actions that Islamabad has taken to remain compliant with global anti-money laundering and counter terrorism financing regime.
The FATF is holding six-day-long meetings to discuss issues ‘to protect the integrity of the global financial system and contribute to safety and security’. The meetings involve more than 700 delegates from the 203 jurisdictions of the FATF Global Network, as well as the UN, IMF, World Bank and other partners.
US move at FATF: Lawmakers term resolution against Pakistan a failure of govt
The plenary meetings will take place from February 21 to 23 and will focus on counter-terrorism financing and proliferation financing. The US and the UK have moved a motion to place Pakistan on the FATF terrorist-financing watchlist. France and Germany are co-sponsoring the move.
If the FATF adopts the resolution, the country can again be placed on the grey list of jurisdictions with deficient anti-money laundering regimes after a gap of three years. Pakistan suspects Indian role behind the US-sponsored resolution as Ismail recently lamented that the FATA was used for political purposes.
According to the financial sector experts, any move to place Pakistan on the watchlist would enhance scrutiny level of the financial transactions that the country’s banking sector would undertake with the rest of the world.
This will increase the cost of opening letter of credits (LC) for trade purposes. The negative decision by FATF will have the force to affect the international credit ratings, which will in turn increase cost of borrowings for the government.
At present, the 11 jurisdictions are on the high risk and monitoring list of the FATF, which include North Korea, Iran, Iraq, Syria, Yemen, Ethiopia and Sri Lanka, etc. Pakistan has remained on the FATF grey list from 2009 to 2015.
While delisting the country in February 2015, the FATF had noted that Pakistan made significant progress in improving its anti-money laundering and counter-terrorism financing regime and also established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2010.
Pakistan could face economic pain from return to terrorist financing 'grey list'
However, Pakistan kept working with the Asia Pacific Group to address the full range of issues identified in its mutual evaluation report, in particular, fully implementing UN Security Council Resolution 1267.
But activities of Hafiz Saeed’s Jamaat-ud-Dawa (JuD) and the Falah-e-Insaniyat Foundation (FIF) have created problems for the government, according to Finance Ministry officials.
This month, Pakistan also promulgated a Presidential Ordinance to ensure full compliance with the FATF requirements. Now the UN-proscribed organisations and individuals will be automatically proscribed in Pakistan.