International Monetary Fund (IMF) has raised concerns over rampant money laundering in the country.
IMF mission, which is currently in Pakistan for talks over a bailout package for country’s beleaguered economy, has also shown reservations on the weak banking sector and its regulatory framework which is the leading cause behind increased cases of money laundering.
The Fund is likely to place 27 action plan of Financial Task Force (FATF) as a benchmark for a possible bailout package for the country’s struggling economy.
As per sources close to the matter, Asia Pacific Group (APG), a regional body of FATF, pointed out 670 loopholes in Pakistan’s actions for combating money laundering and terror financing.
APG has given a one-month deadline (December 15, 2018) to Pakistan to submit a written reply detailing the measures taken to address such a large number of reservations.
Sources say US President Donald Trump’s tirade over Pakistan was crucial in timing as it came just the time when IMF mission was holding talks with Pakistan government over a $6 billion bailout package.
The talks would be concluded Tuesday (today) and the mission – previously scheduled to hold a press conference – would now release a press statement.
Sources claim that Pakistan has lost the bargain position it gained after securing small bailouts from friendly countries because of increased episodes money laundering in recent times.
The country would have to undergo three reviews as per FATF action plans with the first review set for January 2019, second and third reviews in May 2019 and September 2019.
Meanwhile, Pakistan, which is currently in the grey list of the monetary watchdog, has three possible scenarios – it may go from grey to green list, or from the grey to black or it may remain on the same category until further revision.