There has been a lot of speculation about Pakistan’s inclusion in the terror financing list issued by the Financial Action Task Force (FATF). During recent days, many media outlets reported that Pakistan hasn’t been included in the grey-list of the FATF while others reported the opposite.
It can’t be said that both news were not authentic. Pakistan did manage to remain out of the list of terror-financing economies initially. China, Saudi Arabia and Turkey supported Pakistan and opposed the bill that aimed to put Pakistan in the grey-list. However, United States pressed on its anti-Pakistan agenda and managed to get an unprecedented re-vote on the bill by lobbying countries against Pakistan.
Media reported that on the second vote China and Saudi Arabia, both known as Pakistan’s strongest allies, decided to remain silent. Turkey, however, did stand by Pakistan’s side and opposed the bill again. Saudi backed out first followed by Beijing.
Turkey’s support didn’t prove enough for Pakistan. FATF announced that Pakistan has been placed on the grey-list of FATF that watches the countries that lack proper efforts to track terrorist financing. Pakistan will be included in the grey-list in June, 2018. So, how bad is it for Pakistan’s overall image and most importantly its economy? Lets have a look.
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What is FATF?
We will start with what FATF is and what are its responsibilities.
FATF is a global task force which was formed in 1989 by different countries to combat money laundering, terrorist financing and other illegal activities related to international financial system.
FATF has issued a series of recommendations that, when followed, will help stop money laundering and terrorist financing.
The task forces monitors financial transactions of countries worldwide, reviewing if they have taken the required steps against curtailing the flow of funds to blacklisted organizations i.e. mafias, terrorist outfits, banned groups who face economic sanctions from UN-member countries.
Based on these facts, FATF releases a list of countries after its review and sorts them according to their performance against activities they have deemed illegal.
What is the Grey-list?
FATF’s grey list includes countries that are not doing enough to fight money laundering and terrorist financing.
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Pakistan was on this list previously for three years between 2012 and 2015. The task force recognized Pakistan’s efforts and removed it from the grey list in 2015.
However due to the tensions between United States and Pakistan, and considering the influence that US has on other countries, Pakistan has been placed in the grey-list yet again, which will be effective from June this year.
Other countries, apart from Pakistan, included in the list are; Ethiopia, Iraq, Yemen, Serbia, Syria, Sri Lanka, Trinidad and Tobago, Tunisia, and Vanuatu.
Pakistan’s inclusion has raised a lot of concerns in the country and has hinted at a propaganda against Pakistan. Reason behind this is that FATF evaluates country’s financial system to determine if they are to be included on the blacklist. However, this time, no such evaluation was done and FATF just acted on United States of America’s proposal with the backing of France, Germany and Britain.
Financial Adviser to the Prime Minister, Miftah Ismail, says that this is nothing but a politically vindicated move by USA. According to him, Pakistan has made conspicuous efforts to fight money laundering and terrorist financing, but instead of supporting Pakistan, countries are lobbying against it.
Miftah said;
What do [they] want? They just want to humiliate Pakistan. Pakistan is not a big money launderer. If they were bothered about terror financing, they would work with us, they would see how much we have done and [what more] we will do till June.
What Does it Mean to Be in the Grey List?
Inclusion in this list is not good for any country especially a country like Pakistan whose global reputation continues to suffer. Firstly, Pakistan’s inclusion in the terror financing list portrays a negative image to the world.
Secondly, it also conveys the impression that a country’s financial system is weak and effective measures aren’t being taken to halt money laundering or financing groups that have been banned for indulging in terrorist activities.
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But the most important reason? It is bad for the country’s economy. Countries placed on these lists see a decrease in foreign investment and foreign companies hesitate to invest considering the potential ties to terrorist activities. It is bad for the reputation of other companies as well. No company wants to be doing business with a country that has possible ties with terrorist funding activities or lacks a process that prevents such activities.
Apart from this, it will be difficult for Pakistan to get foreign loans from IMF, World Bank or Asian Development Bank etc as well. It could also prove hard to raise debts from international markets. Foreign banks (like Standard Chartered) may also decide to pull out, hitting the financial sector of Pakistan.
Financial Adviser to the Prime Minister is of the opposite view, however. Miftah Ismail says that FATF’s decision will not have any significant effect on country’s economy. Talking to a local media channel, Ismail said;
Nothing is going to happen before June… [but even then] nothing really will happen to Pakistan. It is not a big issue.
Implications for Pakistan and How can We Get Out?
Pakistan, for now, has been placed on the watchlist until June. It is believed that Pakistan was included in the list because Jamaat-ud-Dawa and Falah-i-Insaniyat Foundation, both of which are designated as terrorists organizations by United Nations, are allowed to work freely in the country.
Pakistan roughly has three months to devise an action plan against money laundering and terrorist financing. The news doesn’t end just here. If Pakistan fails to satisfy FATF with their devised strategy, then Pakistan will be placed on the blacklist. Blacklisted countries are those that are unwilling to fight money laundering and terrorist financing.
In case Pakistan is placed in the blacklist in June, it could have an almost irreversible impact on the economy. Recently, Pakistan’s image has improved overall and several big companies have announced their intentions to invest in the country (the auto and telecom sectors being a prime example of this). In case Pakistan is blacklisted, we might see these companies step back and not invest here at all.
If Pakistan develops a report that shows how it is going to fight against these activities then hopefully it will be removed from the grey list.
We got rid of terrorism from our country after a decade of struggle but now US again wants us to get entangled in her military goals.Reports shows that 60-70% area of Afghanistan is under Taliban control (directly or indirectly) and what US is trying to do this time is simple;put the blame of her failure on Pakistan(the above is an excellent example).
The only solution to a Peaceful Afghanistan is by a dialogue with Taliban and not the use of force it never succeeded and never will be.
And most importantly we need to step up our game,we need a strong foreign policy and an effective lobbying which unfortunately doesn’t come to our politicians empty brains
It is not just about Afghanistan. Hafiz Saeed and Masood Azher are declared terrorist by US. Pakistan do not act against them as we have some goals to be met in Kashmir. It is clear that US will impose sanctions if Pakistan do not act against these 2 people. For you, they could be good but for the world, they are terrorists. If you support terrorism, what should you think they do to you? Ultimately Pakistan will become terror sponsor countries. It is a double game being played by the US but we’re helpless. Might is right law. US controls the world snd your say is nothing. Simple.
US or any other country don’t have any prove against hafeez saeed or masood azher only some indian media report. whole world saw what happened in maynmar ,in kashmir in iraq, in syria etc why no action taken against those countries ?? USA is doing what they always do blame other for their failure like they did with vietnam, with iraq etc
Read the book “the betrayal of india”. It proves that mumbai attacks were inside job.
شاطر ہندو بنیابڑا چال باز ہے.
Yeah. They are only busy fighting with each other.
If your leader (so-called) youthia khan fund terrorist org by kpk funds, what we can do else?? Imran khan to become pm can even sell wives. What a leader, huh?
dialogue with own one egg.
Pakistan foreign office’s and minfaah ismail’s argument is, “pakistan was in grey list in 2012 to 2015 as well. its not a big deal”
but in 2012 pakistan was in grey list due to money laundering but now its about funding terrorists. these thugs thinks that nation is fool. I think these minister should be thrown into jail for destroying pakistans image and ex foreign minister (nawaz sharif) too.
not only ministers, but awaam as well who attend their Jalsy and support them.
We’ll have to start from this forum then :P
There are many blinds found here too.
Miftah is right about one thing. “It is not a big issue”, Nawaz Sharif will be shouting why he was ousted, Imran Khan will be shouting that he is getting Rid of Shahbaz after Nawaz. Zardari is ready to fix Punjab after he fixed Sindh. All three of them will spend rest of their lives in UK with their families after getting tired of Politics.
Only with the support of public
This. Nobody will care. We ll be left with some other puppet from their lineage.
your military is still running terrorist camps in pakistani occupied Kashmir.
We pray you get into this list so you would know the pain that you’ve caused the people
lol, you must be a butt hurt toiletless Endian crying on a Pakistani news/tech site. What a moron you’re. Stop doing harm in Kashmir and let them decide what they want.
Amazing that Pakistanis are toilet and piss experts.
abuse isexcuseto avoid a serious argument.
F**k them. Companies already working in pakistan already know how much Pakistan “funds” terrorists. It’s Zero.
While everybody knows what Murica is doing in other countries. They actually fund criminals first and then label their activities as “islamic terrorism”.
Thank You Army for creating another trouble for Pakistan