This will create more financial problems for the country which is dealing with a major financial crisis.
The global terror watchdog, the Financial Action Task Force (FATF), gives Pakistan four months till February 2020 to put its house in order or get ready to be blacklisted. At the end of the five day plenary in Paris, Pakistan though has managed to escape the “Black List’’ but has been pulled up by the global body for failing to comply with the 27 points that it had promised to fulfil last year June.
According to sources, Pakistan managed to fulfil only five out of 27 points as stated by the FATF, but continued to remain on the `Grey List’ with the help of its all-weather supporter China which is in the FATF chair currently.
Earlier this week, International Co-operation Review Group (ICRG) of FATF had met and discussed steps taken by Pakistan for countering terror financing and anti-money laundering (CFT/AML).
Strongly urging Pakistan to complete its full action plan by February 2020, the FATF has said that it will be taking action. And it has also asked the member countries to alert their financial institutions to be careful in their business and financial transactions with Pakistan.
Making its decision public, the FATF has given notice to the global financial institutions to be ready to face any eventuality next winter.
Warning Pakistan through a very strong statement, FATF President Xiangmin Liu has said, “Pakistan needs to do more and faster. If by February 2020 it doesn’t make significant progress, Pakistan will be put in the ‘Black List’.”
Soon after the Asia Pacific Group decided to move Pakistan to the Grey List, the neighbouring country resorted to intense lobbying to save itself from the blacklisting by the global body.
The principle of consensus is followed by the 39-member FATF, however intense lobbying on the sidelines of the UNGA by Pakistan Prime Minister Imran Khan managed to convince three countries including – China, Turkey and Malaysia to vote against the proposal which has been tabled by the UK, France and Germany.
Sources explained that if the neighbouring country remains on the `Grey List’ or is put in ‘Dark Grey’ it would be very difficult for it to get financial aid for not only International Monetary Fund (IMF), but also the World Bank and the European Union. This will create more financial problems for the country which is dealing with a major financial crisis.
The decision of keeping the country on the `Grey List’ was taken after the FATF had discussed all the issues which are under review, and there was consensus on Pakistan as it failed to meet all the parameters under the 27 Action plan at the end of the 15 month timeline.
What is the Black List?
Once under the Black List, there is an immediate economic sanction.
Borrowing becomes difficult.
All the non-banking financial institutions automatically come under financial scrutiny.
Finally, IMF packages are harder to access.