Temporary breather

Pakistan’s FATF woes are far more political than financial in nature

Editorial June 23, 2019

An aggressive diplomatic push has helped Pakistan avert the FATF blacklisting — albeit temporarily. The sword of Damocles still hangs, and Pakistan has to ensure compliance with the FATF action plan to counter money laundering and terror financing by October 2019.

It’s when the global money laundering watchdog will take another, and maybe a final review of Pakistan’s progress on some 10 remaining items on the 40-point action plan. On failure to convince the Paris-based taskforce, Pakistan is unlikely to spare the blacklist which also comprises the likes of Iran and South Korea, and which means global economic sanctions. Currently in the FATF grey list since June 2018, Pakistan is already suffering a huge financial loss, according to media reports.

The Plenary and Working Group of the FATF took up a review of Pakistan’s progress on the assigned action plan during its five-day-long session in Orlando, Florida last week. And if longtime ally China, as well as brother Muslim countries Turkey and Malaysia, had not come to Pakistan’s aid, it would have fallen into the blacklist. The three friends helped Pakistan frustrate the hostile bid spearheaded by India with the help of the US and the UK. Under the FATF charter, a country has to garner support from at least three of the 36 FATF member states to avoid the blacklist. And to exit the grey list in which Pakistan is currently languishing, a yes vote from 15 members is needed.

Even though Pakistan has, in recent months, taken several major steps in line with the FATF action plan — like proscribing several militant groups and seizing their assets as well as ensuring that foreign currency transactions in the country are not left undocumented — it has been told to ‘do more’ and ensure there is no room for money laundering and terror financing.

That Pakistan’s FATF woes are far more political than financial in nature is pretty evident. It is one of the several ways for the world powers to keep Pakistan under pressure in pursuit of their diplomatic goals. Well aware of the thickening global plot, Pakistan needs to move on with all the care and caution.

Published in The Express Tribune, June 23rd, 2019.

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