Pakistan likely to remain in FATF grey list
Ahead of next week's Paris meeting of the Financial Action Task Force (FATF), a Netherlands-based think-tank has said that despite the scathing indictment by the Asia Pacific Group (APG), Pakistan is likely to remain on FATF's grey list.
The European Foundation for South Asian Studies (EFSAS) has said that "there is little doubt that Pakistan is not really serious about its adherence to the FATF's requirements. The country has been allowed to get away so often with blatantly untruthful claims to the international community about having stopped sponsoring terrorism that it has honed this skill into an art. It is, accordingly, attempting to project superfluous and temporary actions as demonstrations of sincere and substantial efforts to the FATF".
"While Pakistan may well succeed in averting the FATF blacklist by the skin of its teeth this time around, it will almost certainly remain on the grey list as it has little chance of securing the 15 votes required to get itself out of the list. That will bring its own set of serious challenges for the country's economy.
"Eventually though, if Pakistan continues on its merry path of supporting terrorism and funding it through its fake currency factories and networks, the noose is bound to tighten," the EFSAS said.
The think-tank added that Pakistani officials apprised the APG of the "measures they claimed to have taken to prevent suspicious transactions and to restrict illegal activities and freeze the assets of proscribed organizations and groups. That they had little success in convincing the APG was evident from the scathing criticism that Pakistan came in for in the Mutual Evaluation Report (MER) that the APG released on October 2".
The 228 page MER was based on information provided by Pakistan, as well as the field visit by an APG assessment team in October last year.
The six-member team comprised experts from the US, the Maldives, China, Turkey, Indonesia and the UK. At the time of the team's visit, there were 66 organizations and over 7,600 individuals in Pakistan that were proscribed under the UN Security Council (UNSC) Resolution 1373", the think-tank noted.
The MER will play a key part at the Paris meeting in determining whether Pakistan would be retained on the grey list that it currently is on, be removed from the list, or indeed downgraded to the black list along with North Korea and Iran.
According to FATF guidelines, the parameters for the assessment are aEffectiveness and Technical Compliance Rankings', comprising 10 and 40 parameters respectively.
The scale on which a country's technical compliance levels are rated ranges from 'Compliant', 'Partially Compliant', 'Largely Compliant' and 'Non-Compliant'.
In the MER, Pakistan was rated 'Non-Compliant' on 5 of the 40 FATF recommendations, 'Partially Compliant' on 25 others and 'Largely Compliant' on 9.
The only recommendation on which it was fully complaint related to financial institution secrecy laws.
Similarly, on the 10 parameters for effectiveness, Pakistan was judged 'low' in 9 and 'moderate' in 1, it said.
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