Pakistan and FATF - VISION

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Tuesday, June 30, 2020

Pakistan and FATF

Why in news?
The Financial Action Task Force has granted Pakistan on its watch list a 3-month extension to fulfil its 27-point action plan.

What is FATF?
  • The Financial Action Task Force (FATF) is headquartered in Paris.
  • It was set up in 1989 by the G7 countries.
  • Objective - FATF acts as an international watchdog on issues of money laundering and financing of terrorism.
  • It is empowered to curtail financing of UN-designated terrorist groups.
  • It is to limit the concerned countries from sourcing financial flows internationally and thereby constraining them economically.
  • Members - FATF has 39 members, which comprise 37 member jurisdictions and 2 regional organisations.
  • India became a full member in 2010.
What situation is Pakistan facing?
  • The 3-month extension was given by the FATF in view of the pandemic.
  • In June 2018, Pakistan was placed on the grey list.
  • It was given time until October 2019 to complete a 27-point action plan on countering terror finance and anti-money laundering.
  • Failing that, it would be put on the black list of high-risk jurisdictions facing severe financial sanctions.
  • Pakistan has only completed about 14 points so far.
  • However, it will have had at least one extra year to meet its deadlines.
What are the remaining deadlines?
  • To improve the mechanisms for curbing terror financing.
  • To amend laws to curb ‘Hawala’ transactions and placing sanctions against cash couriers who facilitate terror groups.
  • To complete the prosecution of groups banned by the UNSC.
  • To convert the madrassas run by these groups into formal schools.
  • Each item demands more accountability by Pakistan on terror groups.
What does a US report say?
  • In a U.S. report on terrorism, Pakistan remains a “safe haven” for most UN proscribed groups.
  • The report also adds that its steps to prosecute certain leaders of JeM and LeT are inadequate.
  • In 2019, Pakistan has pursued indictments against LeT leaders, but not on serious charges.
  • Even, Pakistan has convicted the 26/11 mastermind Hafiz Saeed only for being part of a banned terrorist outfit and for having illegal property.
  • Pakistan’s failed attempt to have the UNSC designate four Indians as terrorists, speaks to its lack of credibility on the issue.
What is Pakistan doing to achieve the 27-points plan?
  • Pakistan is facilitating the Afghanistan peace deal by pushing Taliban leaders to participate in it.
  • It does this in order to mitigate its troubles at the FATF.
  • Eventually, given the rigorous FATF action plan, Pakistan would realise that only clear actions would free it from the FATF commitments.

Source: The Hindu