PAKISTAN TO REMAIN ON “GREY LIST” BY FINANCIAL ACTION TASK FORCE (FATF)

PAKISTAN TO REMAIN ON “GREY LIST” BY FINANCIAL ACTION TASK FORCE (FATF)

Context

Explaining that the country has failed to act on 6 key mandates the Financial Action Task Force (FATF) has taken the decision to keep Pakistan on its "grey list".  The Financial Action Task Force asked Pakistan to conclude an internationally agreed action plan by Feb 2021.

Details

• The body maintains two lists – a blacklist and a grey list.
• Countries on the blacklist are those that the watchdog finds non-cooperative in the global effort to restrict money laundering and terror-financing.
• The grey list is officially called ‘Jurisdictions Under Increased Monitoring.’
• It consists of those nations that show significant risks of money laundering and terror-financing but which have committed to working closely with the FATF in the development and implementation of action plans that address their deficiencies.
• If the country is not actively handling money laundering or terror funding, it is then blacklisted.
• So far, only 2 countries that are Iran and North Korea have been blacklisted, they are Iran and North Korea.

Financial Action Task Force (FATF)

• It is a global watchdog that was founded to tackle money laundering initially.
• But its role became significant post the 9/11 terror attacks.
• After the attacks, the FATF enlarged its operations and included terror financing under its scope
• Its membership includes 39 jurisdictions.