FATF meet begins in Paris, Pak grey-listing on agenda

NEW DELHI: The six-day crucial meeting of the global counter terror financing watchdog FATF (Financial Action Task Force) started on Monday in Paris. A final decision will be taken to implement the decision adopted in February to grey-list Pakistan for terror financing.

The FATF confidential meetings involve delegates from 203 jurisdictions of its Global Network, as well as UN, IMF, World Bank and other partners. Photo credit: fatf.gafi.org

Smita Sharma

Tribune News Service

New Delhi, June 25

The six-day crucial meeting of the global counter terror financing watchdog FATF (Financial Action Task Force) started on Monday in Paris.

At the plenary meeting later this week under Argentinian Presidency of Santiago Otamendi, a final decision will be taken to implement the decision adopted in February to grey-list Pakistan for terror financing.

The FATF confidential meetings involve delegates from 203 jurisdictions of its Global Network, as well as UN, IMF, World Bank and other partners.

Pakistan which now has a caretaker government in place ahead of the general elections on July 25, is being defended by interim Finance Minister Shamshad Akhtar .

The Pakistani delegation includes officials from Federal Investigation Agency, State Bank of Pakistan, Finance Ministry and the Financial Monitoring Unit. The delegation will have to present its action taken report in the 90 days since last plenary and draft plan for steps to be taken ahead to avoid sanctions. According to Pakistani media, official sources have suggested that they expect the grey-listing to take place this week.

In the last FATF meeting in February, there was dissent by China, Saudi Arabia, Turkey, Russia and GCC (Gulf Cooperation Council) countries at the initial ICRG (International Cooperation Review Group) round. But later in the week, at the APG (Asia-Pacific Group on Money Laundering) plenary consensus was obtained through hectic diplomacy on the motion nominated by USA, UK, Germany and France.

It was decided to put Pakistan under the monitoring and reporting programme for its failure to counter terror financing, but an announcement withheld.

As per existing procedures, a formal notification is likely later this week if consensus still holds, with a blueprint in place for Islamabad to comply with for review of its grey listing else be added to a black list next year.

This will place Pakistan and its State Bank under immense scrutiny of the global watchdog that sets regulatory and legal mechanisms to counter terror financing. If the motion is actualised Pakistan stands a risk downgrade by multilateral lenders like IMF (International Monetary Fund), World Bank, ADB (Asian Development Bank) that would make borrowing of funds difficult and impact its foreign reserves. Also, reduction in its risk-rating could impact its stock markets significantly.

However, Islamabad is downplaying any such direct impact.

Pakistan argues that it has been clamping down on UN-proscribed organisations and individuals like Lashkar-e-Toiba, Jamat-ut-Dawah, FIF (Falah-e-Insaniyat) and Hafiz Saeed. Pakistan was on the grey-list earlier from 2012 to 2015 till it completed the Action Plan on implementation of FATF standards.