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