Pakistan to remain in ‘grey’ list of FATF till February 2021 following failure to take action against Maulana Masood Azhar

NEW DELHI: Pakistan will remain in FATF’s ‘grey’ list till February 2021 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- and Hafiz Saeed, officials said on Friday.

The virtual plenary of the Financial Action Task Force (FATF), held for the last three days, concluded that Pakistan will continue to remain in its ‘grey’ list.

The decision has been taken after a thorough review of Pakistan’s performance in fulfilling the global commitments and standards on the fight against money laundering and terror financing.

“Pakistan remains in the increased monitoring list or the grey list,” FATF president Marcus Pleyer said at a virtual press conference from Paris. Pakistan failed to fulfill six of the 27 mandates so far as a result of which the country continues to be in the ‘grey’ list of the FATF.

“Pakistan failed to fulfill six of the 27 mandates given to check terror funding,”  Pleyer said, adding that Islamabad must impose sanctions and prosecute those involved in terror financing.

“Pakistan needs to do more on checking terror funding, it can’t stop now,” he said.

Pleyer said Pakistan has been given a chance to repair their progress.

“FATF will send a team for an onsite visit once Pakistan complies with the remaining six conditions. Then only a decision will be taken if it comes out of the grey list or not,” he said.

The FATF chief said Pakistan has been put on the ‘grey’ list after finding its a high risk of terror financing in 2018. Pleyer said North Korea and Iran continue to be on the ‘black’ list of the FATF as the two countries have not made any progress while Iceland and Mongolia have been removed from the ‘grey’ list after they fulfilled the mandates.

Sources said the tasks in which Pakistan failed to fulfill include failure to take action against all UN designated terrorists like Jaish-e-Mohammed (JeM) chief Azhar, Lashker-e-Taiba (LeT) founder Saeed, and the outfit’s operational commander Zakiur Rehman Lakhvi.

Besides, sources said, FATF has noted that there was the 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.

Sources said four nominating countries -the United States, Britain, France, and Germany- were not satisfied with Islamabad’s commitment to taking strong action against the terror groups operating from its soil.

Azhar, Saeed, and Lakhvi are the most wanted terrorists in India for their involvement in numerous terrorist acts, including the 26/11 Mumbai terror attacks and the bombing of a CRPF bus at Pulwama in Jammu and Kashmir last year.

With Pakistan’s continuation in the ‘grey’ list, it is increasingly becoming difficult for the country to get financial aid from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB), and the European Union, thus further enhancing problems for the neighboring country which is in a precarious financial situation.

The FATF also made assessments on Pakistan’s cooperating and taking action to identify and taking enforcement action against illegal money or value transfer services.

The assessment includes implementation of cross-border currency and bearer negotiable instruments, controls at all ports of entry, including applying effective, proportionate, and dissuasive sanctions.

In all these points, Pakistan’s progress was slow, sources said.

The country’s outstanding action areas also include effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1,267 and 1,373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services.

The FATF plenary was earlier scheduled in June but Pakistan got an unexpected breather after the global watchdog against financial crimes temporarily postponed all mutual evaluations and follow-up deadlines in the wake of grave health risk following the COVID-19 pandemic.

The watchdog also put a general pause in the review process, thus giving additional four months to Pakistan to meet the requirements.

Pakistan needed 12 votes out of 39 to exit the ‘grey’ list and move to the ‘white’ list. To avoid the ‘black’ list, it needed support from three countries. China, Turkey, and Malaysia are its consistent supporters.

Pakistan was placed on the ‘grey’ list by the FATF in June 2018 and was given a plan of action to complete it by October 2019.

Since then the country continues to be on that list due to its failure to comply with the FATF mandates.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system.

The FATF currently has 39 members including two regional organizations — the European Commission and Gulf Cooperation Council. India is a member of the FATF consultations and its Asia Pacific Group.