fatf-keeps-pakistan-on-grey-list-till-next-review

Context: The Financial Action Task Force (FATF) recently decided to keep Pakistan on the “greylist” till the next review of its compliance to the recommendations in February next year.

More on the news:

  • Pakistan has failed to deliver on action against organisations linked to terror groups banned by the UN Security Council.
  • It has also seen delays in prosecution of banned individuals and entities like Lashkar-e-Taiba chief Hafiz Saeed and LeT operations chief Zaki Ur Rahman Lakhvi as well as Jaish-e- Mohammad chief Masood Azhar.
  • Pakistan was found non-compliant in cracking down on terror financing through narcotics and smuggling of mining products including precious stones.
  • Pakistan has so far made progress across all action plan items and has now largely addressed 21 of 27 FATF action items.

The Financial Action Task Force (FATF)

  • It is the global money laundering and terrorist financing watchdog. 
  • The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. 
  • As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
  • The FATF has developed the FATF Recommendations, or FATF Standards, which ensure a co-ordinated global response to prevent organized crime, corruption and terrorism. 
  • They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes.  
  • The FATF also works to stop funding for weapons of mass destruction.
  • The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity.  
  • The FATF monitors countries to ensure they implement the FATF Standards fully and effectively and holds countries to account that do not comply.

FATF lists

  • Greylist” refers to countries that are “monitored jurisdictions” 
  • Blacklist” refers to those facing a “call to action” or severe banking strictures, sanctions and difficulties in accessing loans.

Image Source: TH