Pakistan Dodges The FATF Bullet, For Now: Given Time Till October To End Terror Funding Or Risk Blacklisting

Financial Action Task Force (FATF) has retained Pakistan under the Greylist for the time being and has given it time till October (2019) to end terror financing, or it could risk being blacklisted, reports News18.

At the recently concluded week-long session of the FATF, India presented a vigorous case to get Pakistan blacklisted in the aftermath of the Pulwama attacks.

In a fidayeen (suicide) attack carried out by a Kashmiri youth, 44 CRPF jawans were killed in an IED attack in Kashmir’s Pulwama district on 14 February (2019). Pakistan backed terror organisation Jaish-E-Mohammed had claimed responsibility for the same.

Following this, India had strongly asserted that Pakistan has failed to contain terrorism and the Pulwama attacks were an example of its failure to give effect to what it had promised FATF in June 2018.

In 2018, to avoid being blacklisted, Pakistan had presented a 26-point action plan covering the next 15 months to the FATF committee in which it agreed to address stated deficiencies in structures, especially those involving terror financing.

Thus, India had called for “closer scrutiny (of Pakistan) immediately” and demanded “stronger implementation” of regulations to curb terror financing.

Currently only North Korea and Iran are blacklisted.

How Does Blacklisting Impact Pakistan

Being blacklisted by FATF shows that Pakistan is not cooperating with the fight against terror funding. Such a negative opinion about the state of the country could lead to a downgrading of the country by agencies like the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European Union (EU).

Pakistan’s finances are in disarray and without outside support, the domestic economy might collapse.

It was reported on 9 February (2019) that Pakistan Prime Minister Imran Khan had met with IMF chief seeking its 13th bailout since the late 1980s to deal with a current account deficit that threatens to trigger a balance of payments crisis.

Blacklisting could also result in rating agencies like Moodys, S&P and Fitch downgrading Pakistan’s outlook.

What Is FATF

Financial Action Task Force (FATF) is an inter-governmental body whose objective is to prevent subversive activities like combating money laundering, terrorist financing and other related threat.

Also Read: After Pulwama, Hate-Crime Checkers Need To Re-Examine Their Basics