Financial Action Task Force, (FATF) formally announced the removal of Pakistan from its gray list. A two-day meeting of FATF was held in Paris on 20-21 Oct, in which the removal of Pakistan’s name from the gray list was reviewed. The Pakistani delegation was led by Minister of State for Foreign Affairs Ms. Hana Rabbani Khar. After the meeting, FATF officially announced the removal of Pakistan from the gray list. Getting out of FATF’s gray list will make it easier for Pakistan to get foreign funding and loans.
According to the FATF communiqué, Pakistan will remain under monitoring even after the removal of its name from the gray list, Pakistan needs more implementation of the Anti-Money Laundering and Counter-Terrorism Financing (AML/ CTF) Laws.
During his speech, president FATF Raja Kumar said, “we welcome Pakistan for coming out of the gray list. Pakistan was in the list of FATF since 2018 and Pakistan has acted on all the demands. The FATF team visited Pakistan and reviewed all the reforms, improving Pakistan’s system to prevent money laundering and terror financing, and implementing 34 points”.
After the attachment of Pakistan’s name to the global watch gray list, the country faced strict monitoring to get international aid, loans, and investments, which affected foreign deals and had negative effects on the country’s economy. During the briefing on the decisions of the recent meeting of the Financial Action Task Force, President Raja Kumar admitted that Pakistan has implemented reforms which itself are good for its stability and security.
FATF and its Objectives
The Financial Action Task Force also known as FATF is an international organization established in 1989. The United States, United Kingdom, Japan, Italy, France, and China initially became members by mutual consent. Later, many other countries became members of the Finance Action Task Force and soon the number reached 39.
The purpose of this organization is to monitor and impose economic sanctions on countries that do not cooperate in global efforts against terrorism and that provide financial support to terrorists supposed a threat to international peace. The main responsibilities of the organization are to take steps to prevent money laundering and terrorist financing at the global level. The main objectives of FATF are as under:
- Preventing the financing of terrorism
- Controlling Money Laundering
What is FATF’s Gray List
The gray list means that FATF has increased its monitoring of countries on the list to assess their progress on anti-money laundering and counter-terrorist financing measures.
Pakistan was first included in FATF’s gray list on 28 February 2008 and was asked to work with the Asia Pacific Group (APG) to achieve the goals. However, on positive developments in June 2010, Pakistan was removed from FATF’s watch list, but on 16 February 2012, Pakistan was again included in the gray list and remained until 2015. Pakistan was included in FATF’s gray list for the third time in 2018.
Prime Minister Mr. Shahbaz Sharif has expressed his gratitude for getting out of the gray list of the Financial Action Task Force. In a statement on Twitter, Mr. Shahbaz Sharif said, “Pakistan got rid of FATF’s gray list, this is an acknowledgment of our great sacrifices in the war against terrorism. Pakistan’s efforts to fight terrorism have been recognized by the world”. The Prime Minister also thanked the FATF countries for their valuable input in recognizing Pakistan’s efforts in this regard. PM congratulated Foreign Minister Mr. Bilawal Bhutto, all concerned authorities, ministries, Pakistan Army, and Director General Military Operations (DGMO). PM Shahbaz Sharif said, “I appreciate and congratulate the Army Chief General Qamar Javid Bajwa for his key role in this success, thanks to the allied parties and leaders, who made it possible with their full cooperation”.
President Mr. Arif Alvi also congratulated the people of Pakistan for the exodus of the FATF gray list, and said “thanks to all those who worked tirelessly for it”.
According to the official statement issued by the Foreign Ministry of Pakistan “The Financial Action Task Force has decided by consensus that Pakistan has completed all substantial, technical and procedural requirements of both 2018 and 2021 Action Plans. As a result, Pakistan has been taken from the list of jurisdictions under increased monitoring, with immediate effect. This decision was taken during the FATF Plenary meeting held in Paris, France from 20-21 October 2022”.
“Pakistan has made enormous progress in the Anti Money Laundering and Countering Financing of Terrorism (AML/CFT) domain throughout fulfilling the requirements of both Action Plans. Despite many challenges, including the Covid-19 pandemic, Pakistan continued the reform trajectory and sustained the high-level political commitment to aligning its domestic AML/CFT regime with international best practices. Achieving the FATF targets was a whole-of-nation endeavor. Multiple ministries, departments, and agencies, both at the Federal and Provincial levels, contributed to achieving this national objective. The engagement with FATF has led to strategic improvements in Pakistan’s laws and procedures, making its domestic AML/CFT regime more resilient to cope with current and future challenges” added the statement issued by the foreign office of Pakistan.
In a statement released by the ministry of foreign affairs, it is said, “Pakistan thanks the FATF members and the international community for providing valuable support during the Action Plan period. Pakistan reiterates that it will continue building on this mutually beneficial cooperation to sustain the gains. Pakistan also looks forward to sharing its expertise, knowledge, and experience with other countries to enhance the effectiveness of FATF standards at the global level”.
Independent economists believe that the removal of Pakistan from the gray list of FATF will bring positive results to the local economy and apart from this, Pakistan’s access to the global market will become easier.
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