Financial Action Task Force to take final decision on blacklisting Pakistan on October 18

Financial Action Task Force (FATF), the global watchdog for terror financing and money laundering, will finalise its decision on Pakistan on October 18 (Friday) in Paris. Sources indicate that Pakistan is on the verge of strong action by FATF, given its inadequate performance, whereby it managed to pass in only 6 of 27 items.

It is learnt that Islamabad will be isolated by all FATF members for failing to take enough measures to curb terror financing. Notably, the Asia/Pacific Group (APG) subgroup has already recommended that Islamabad should be blacklisted due to its poor compliance on measures to tackle terror.

China, which is Pakistan's ally, currently heads the FATF, which also has Malaysia, Turkey and Saudi Arabia as its members and it is expected that China, Malaysia and Turkey would vote against placing Pakistan in black list.

If the FATF decides to blacklist Pakistan then it will be a big blow for the country because FATF blacklisting would entail extensive economic sanctions and impact a USD 6 million bailout program for Pakistan by the International Monetary Fund (IMF).

Last week, the APG on Money Laundering (APG) published a 228-page report, titled "Mutual Evaluation Report 2019", which said that Islamabad has largely but partially complied with 36 of the 40 parameters set by the FATF at the time of the country`s inclusion in the grey list. Based on the technical compliance ratings, the APG report showed that Pakistan had fully complied with only one parameter, largely complied with nine, and partially complied with 26 of the 40 parameters.

It may be recalled that Pakistan was placed into the grey list in June 2018 and the FATF had given 27 action plans to Pakistan asking it to comply with them till September 2019 in order to move out of the grey list.