Pak to be grey-listed for financing terror

Smita Sharma

Tribune News Service

New Delhi, February 23

In a significant move, Pakistan will be placed on the grey list by the FATF (Financial Action Task Force) plenary. The six-day meeting in Paris ended today with consensus on the motion nominated by the US, the UK, Germany and France. Sources said as per the procedures, a formal announcement will be made at the next plenary in June with the compliance action plan prepared by then. 

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. Sources said the consensus at the plenary was arrived at after a long set of interventions by multiple countries that supported the nomination. The Asia-Pacific Group on Money Laundering plenary meets every 90 days.

(Follow The Tribune on Facebook; and Twitter @thetribunechd)

“Eventually, all countries kept silent when the Argentinian President asked if there were any objections to the nomination,” said a source privy to the negotiations. This included China, which had backed Pakistan at the last plenary at Buenos Aires. At the ICRG (International Cooperation Review Group) deliberations earlier in the week, China was joined by Saudi Arabia and Turkey in defending Pakistan. 

Based on ICRG discussions Pakistan Foreign Minister Khawaja Asif took to Twitter to announce his country had been provided reprieve, even before the plenary meet began. 

A senior Russian diplomat told The Tribune that at the ICRG, Moscow advised against punishing Pakistan 'prematurely' when some efforts were on by 'reasonable sections' in Islamabad to crack down on terror havens. However Russia did not want to go against the general consensus. "All countries supported Pakistan's recent efforts to seize assets of Lashkar-e-Toiba, Jamat-ud-Dawah and Falah-e-Insaniyat. But members lamented that this process should have occurred much earlier," said a source. 

Once implemented in June, Pakistan stands  a risk downgrade by multilateral lenders like the IMF, World Bank, and ADB that would make borrowing of funds difficult and impact its foreign reserves. Also, a reduction in its risk-rating could impact its stock markets significantly. Pakistan was on the grey list for three years till February 2015 till it completed the action plan on implementing FATF standards.