In Major Setback To Imran Khan Pakistan Fails To Get Off FATF ‘Grey List’

In a major setback to the Imran Khan-led government, Pakistan will continue to be on FATF’s Grey List as it has failed to fulfill six key obligations of the global money laundering and terrorist financing watchdog that include failure to take action against two of India’s most wanted terrorists — Maulana Masood Azhar and Hafiz Saeed.  The virtual plenary of the Financial Action Task Force (FATF), held in the last three days, concluded that Pakistan will continue in its ‘grey’ list. 

The anti-terror financing watchdog has asked Pakistan to continue to work on implementing an action plan to address its strategic deficiencies including demonstrating that its law enforcement agencies are identifying and investigating the widest range of terrorist financing activity and demonstrating that prosecutions result in effective, proportionate, and dissuasive sanctions. 

It also asked Pakistan to demonstrate effective implementation of targeted financial sanctions against all designated terrorists, identifying and freezing assets and prohibiting access to funds and financial services.  The Financial Action Task Force (FATF) said in a statement Pakistan at the conclusion of its plenary meeting that Islamabad should swiftly complete its full action plan by February 2021. 

“As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan by February 2021,” it said.  FATF said Pakistan has now largely addressed 21 of the 27 action items. 

“Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by – demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities; and demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions,” FATF said. 

It called upon Pakistan to demonstrate “effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to NPOs, identifying and freezing assets (movable and immovable)”, and “prohibiting access to funds and financial services and demonstrating enforcement against TFS violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases”. 

The statement said that since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan’s “continued political commitment has led to progress in a number of areas in its action plan”. 

Ahead of the concluding day of the plenary meeting FATF, India on Friday said that Pakistan has fulfilled only 21 out of 27 action items and also continues to shelter terrorists. It also accused Pakistan of not taking action against entities and individuals proscribed by UN Security Council. 

Minister of External Affairs (MEA) spokesperson Anurag Srivastava said at the regular media briefing on Thursday that six important action items concerning Financial Action Task Force (FATF) are yet to be addressed by Pakistan. 

“It is understood that Pakistan has addressed only 21 action items so far out of the total 27 points FATF Action Plan. Six important action items are yet to be addressed. As is well known, Pakistan continues to provide safe havens to terrorist entities and individuals and has also not yet taken any action against several terrorist entities and individuals including those proscribed by the UNSC such as Masood Azhar, Dawood Ibrahim, and Zakirur Rehman Lakhvi,” he had said. 

Pakistan has been on the FATF’s grey list since June 2018 and the government was given a final warning in February to complete the remaining action points by June 2020. The FATF extended the June deadline to September due to the spread of coronavirus that disrupted the FATF plenary meetings. 

As things stand, Islamabad is finding it difficult to shield terror perpetrators and implement the FATF action plan at the same time.  In recent weeks, Pakistan tried to paint a picture that has started the reforms, including the passing of some Bills to prevent blacklisting by the FATF. 

FATF has noted the fact that there was a sudden disappearance of the names of more than 4,000 terrorists from its original list of 7,600 under Schedule IV of its Anti Terrorism Act.  Pakistan’s position will be up for review in the next meeting of the FATF to be held in February next year.