Daily Times

ISLAMABAD: Contrary to the reports making rounds in the international media on Friday, Pakistan has not been featured among those countries found to have strategic deficiencies with respect to countering money laundering and combating financing for terrorism by the Financial Action Task Force (FATF), an international watchdog on money laundering and terror financing.

The countries with strategic deficiencies on the list issued by the FATF on February 23 are: Ethiopia, Iraq, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Vanuatu and Yemen.

Pakistan’s name is also absent from the public statement issued by the regulator.

Similarly, Pakistan is not mentioned in the statement of outcomes of the plenary meeting, even though it mentions discussions on progress made by countries like Spain, Brazil, Norway and Bosnia and Herzegovina.

“As part of its on-going review of compliance with the anti-money laundering and combating the financing of terrorism (AML/CFT) standards, the FATF identifies the jurisdictions that have strategic deficiencies for which they have developed an action plan with the FATF. While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies. The FATF welcomes these commitments,” according to a statement issued by the FATF at the end of the second plenary meeting under the presidency of Santiago Otamendi of Argentina that took place in Paris from February 21-23.

“A number of jurisdictions have not yet been reviewed by the FATF. The FATF continues to identify additional jurisdictions, on an on-going basis, that pose a risk to the international financial system,” the statement read.

“The FATF and the FATF-style regional bodies will continue to work with the jurisdictions with strategic deficiencies and to report on the progress made in addressing the identified deficiencies. The FATF calls on these jurisdictions to complete the implementation of action plans expeditiously and within the proposed timeframes. The FATF will closely monitor the implementation of these action plans and encourages its members to consider the information presented below,” the statement added.

Earlier in the day, there had been multiple reports in Indian and other international media that a decision had been made to include Pakistan in the FATF’s ‘grey list’. An international news agency, Reuters, had cited an unnamed ‘non-Indian diplomatic source’ from one of the FATF countries that the group had decided to put Pakistan back on the watchlist.

The reports had triggered a sharp drop in the Pakistan Stock Exchange’s benchmark KSE-100 index, which plummeted as much as 615 points in intra-day trading immediately after activities resumed following a mid-day break. The rout was somewhat contained, however, with the market closing with more modest losses of 261 points (0.6pc) as investors weighed the possible implications of the move.

The US and Britain had put forward the motion to place Pakistan on the FATF terrorist-financing watchlist. If adopted, the resolution would have placed Pakistan on the FATF ‘grey list’ of jurisdictions with deficient anti-money laundering regimes. Pakistan was previously on the FATF watchlist from 2012 to 2015.

A report in The Wall Street Journal a day earlier had claimed that Saudi Arabia had joined Turkey and China in a move to block the US-led attempt to place Pakistan on the international terror-financing watchlist.

The US was supported in its effort to put Pakistan on the watchlist by the UK, France, Germany and other countries. The proposal was initiated at a working group which is responsible for making recommendations to 35 member nations and two regional groups that make up the FATF plenary.

Pakistan was supported by China and Turkey heading into the FATF working group meeting earlier this week.

Turkey and the US are allies as members of the North Atlantic Treaty Organization (NATO), though they are at odds with one another over actions in Syria.

Pakistan had lobbied FATF member countries to keep it off the watchlist. It also took last-minute action against Pakistan-based militant group Jamaat-ud-Dawa, complying with 10-year-old United Nations sanctions against the group, which the international community holds responsible for the 2008 Mumbai attack that killed 166 people.

Riyadh acted on behalf of the entire Gulf Cooperation Council, the Saudi-dominated bloc of six Persian Gulf nations which are collectively a member of the FATF, said officials from the countries on the task force.

Published in Daily Times, February 24^th 2018.