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Financial Action Task Force (FATF)

  • KIPS CSS Admin
  • May, 2019
  • 255
  • Editorial

TARGET TIME WITH THIS SORT OF STINGING TERROR TACKLING PRESENTLY IN PROCESS HERE AT HOME, UNLIKE NORTH KOREA AND IRAN, WE COULD SHAKE OFF SANCTION-SLAPPING DESPITE THE TERROR-MONEY WATCHDOG’S WARNING LAHORE, PAKISTAN

Having narrowly avoided being blacklisted in February, the government must disallow history to repeat itself. The same steps have been taken by previous governments as well, only to be allegedly stymied by the powerful handlers that terror bands have.

The presence of such bands have already driven Pakistan towards a difficult position internationally and imposed a steep economic cost as the country’s financial system is flagged as being open to risk of terror financing. The grey listing, as it is known in the Financial Action Task Force parlance, was labouriously lifted and much wrangling back in 2015 against Pakistan’s commitments of further action against these bands. However, whatever action was taken was clearly insufficient, resulting in the country getting back onto the grey list.

The watchdog will decide about retaining Pakistan’s name in the grey list or include it in the black list, after completing its review in September 2019.

Pakistan, placed on the grey list in July 2018, is among 83 countries with a risk score of 5.0 or above. These are the countries that could be closely classified as having a high risk of money laundering and terror financing.

Today, we are facing the prospect of being put on the black list if substantial steps are non-evident to what might undoubtedly be a sceptical watchdog audience. The bands and their existence on Pakistani soil have become much more than a nuisance and an embarrassment.

It is crystal clear that none of them should have any presence here. Finance Secretary Arif Ahmed Khan’s warning on March 6 needs to be taken seriously and genuine action against the bands must be taken promptly to terminate the terror curse for once and for all.

Pakistan has criminalised both money laundering and terror financing but hardly been able to enforce these laws effectively. Being on the grey list never comes with any sanctions, but if we remain on this list, we could face the risk of being put on the black list. This is where it we might find ourselves in the thick of things.

Being on the black list means our banking system will be considered as one with poor controls over the codes of the international standards for anti-money laundering and fighting the financing of terror - forget bringing PayPal to Pakistan, expatriates will find it difficult to send remittances and traders’ cost of business will go up leaving our banks with higher scrutiny in international payments and foreign banks might hardly even do business with our banks. The government, too, will struggle to fish funds from international markets if we are placed on the black list.

Pakistan has been on and off the grey list before. The last time we were erased from the grey list was back in February 2015. If the current consultations between the terror-money watchdog and the government are successful, we will be taken off the grey list and placed on the white list instead.

The watchdog has given us a May deadline to meet. Any further slipping from the list, it is feared, could chill off foreign investors and prevent Pakistan from access to international markets amid the current cash crisis.

Our National Security Committee has already reinstated a ban on the Jamaatud Dawa and the Falah-i-Insaniyat Foundation since the terror tackling gained momentum in March.

Contact us at editor.globalage@kipscss.net.

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