The global terror financing watchdog, FATF, decided to keep Pakistan in the ‘Grey List’ as it has failed to check flow of money to terror groups like the Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), officials said.

The decision was taken at the Financial Action Task Force’s third and final plenary held virtually due to the COVID-19 pandemic. The plenary was held under the Chinese Presidency of Xiangmin Liu.

“The FATF plenary decided continuation of Pakistan in ‘Grey List’ till its next meeting to be held in October,” an official said.

What is the FATF?

* The FATF is an inter-governmental body established in 1989 by the ministers of its member jurisdictions.

* The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

* The FATF is a policymaking body that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

* The FATF currently has 39 members including two regional organisations — the European Commission and Gulf Cooperation Council.

* India is a member of the FATF consultations and its Asia Pacific Group.

The FATF has two types of lists - Black List and Grey List.

The FATF ‘Black List’ has been issued since 2000 and lists countries that it judges to be non-cooperative in the global fight against money laundering and terrorist financing, calling them Non-Cooperative Countries or Territories (NCCTs).

Countries that are considered as safe havens for supporting terror funding and money laundering are included in the ‘Grey List’.

October deadline for Pakistan

Pakistan was placed on the ‘Grey List’ by the FATF in June 2018 and continues to be in the list since then as it has failed to comply with the tasks given by the FATF to stop terror financing.

With Pakistan’s continuation in the ‘Grey List’, it will be difficult for the country to get financial aid from the IMF, World Bank, ADB and the European Union, thus further enhancing problems for the nation which is in a precarious financial situation.

If Pakistan fails to comply with the FATF directive by October, there is every possibility that the global body may put the country in the ‘Black List’ along with North Korea and Iran.

India has been maintaining that Pakistan extends regular support to terror groups like LeT, JeM and Hizbul Mujahideen, whose prime target is India, and has urged FATF to take action against Islamabad.

The FATF decision comes when the US Country Reports on Terrorism slammed Pakistan as a safe harbour for “regionally focused terrorist groups” and allowing LeT and JeM to operate from its soil.

The US State Department report said Pakistan took modest steps in 2019 to counter terror financing and restrain India-focused militant groups from conducting large-scale attacks following the February attack on a security convoy in Pulwama in Jammu & Kashmir linked to Pakistan-based Jaish-e-Mohammed (JeM).

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