FATF and Pakistan
Current Analysis and Newspaper Session Series
50 Discusses FATF and Pakistan’s Future (Click Show More)
1. FATF to decide Pakistan’s Status: https://www.dawn.com/news/1583295
2. Lecture Outline
a. Pakistan has been hounded by FATF for some years now on the issue of terror financing and money laundering
i. Placed in the “Grey List” in 2008 and came out in 2009, then in 2012 and removed in 2015, finally entered it in 2018
b. Short history of FATF
i. Created in 1980 by the G7 countries; 38 members now
1. International anti-money laundering agency
2. Track and report money laundering, especially of drug money and drug trafficking very common then
3. Push countries to take affirmative and legislative action against money laundering networks
ii. After 9/11, tracking and reporting terror financing also added to its role
iii. How does it work
1. Monitors countries through its regional affiliates, Asia Pacific Group (AFG) in case of Pakistan
2. Puts countries first in Grey list after dubious and questionable track record on terror financing and money laundering
3. If country does not comply, then into the Black list
4. Grey list is monitoring stage and no concrete disadvantages except international condemnation
5. Black list spells trouble, international debtors such as IMF, World Bank and Asian Development Banks do not provide loans
c. Pakistan’s relationship with FATF
i. India as a permanent member pushes for black-listing of Pakistan, China comes to our aid
ii. Pakistan has a chequered history
1. Money laundering rampant from the 90’s and terror financing in the wake of the US invasion of Afghanistan in 2001
2. Money laundering most commonly done by the political class and establishment figures
3. Terror financing by state institution indirectly in the past and by religious seminaries and classes through various means
iii. Oct 21 review is coming to determine whether to de-list Pakistan or not
1. Previously, APG report 14-point compliance out of 27-point action plan recommended by FATF
2. The recent Parliament acts passed by the government are in line with that
3. Much politics have been played in that
4. The establishment even did political engineering to get those pieces of legislation passed
5. PTI government setting a dangerous precedent by leaning on the establishment to pass legislation from parliament