By Shahid Farooq Abbasi LIPR Ambassador of Peace
On the 17th of June, Marcus Pleyer, President of the Financial Action Task Force (FATF), while praising Pakistan for implementing the organization’s action plans announced that the financial watchdog will carry out an onsite visit to Pakistan before October this year, and a formal announcement on Pakistan’s removal from the Grey-List would follow.
The timeframe of the removal of Pakistan from FATF’s blacklist remains bleak. Many anticipate that October could be the month when Pakistan will be able to get a clean chit from the financial watchdog but no one is really sure about whether the FATF is going to put further conditions against Pakistan in order to secure a successful exit from the Grey List.
Pakistan was Grey-Listed in 2018 over dubious financial flows but afterward despite fulfilling the FATF’s demands country had to face a tough time as every year Pakistan was handed over with a fresh demands list. There was a looming threat that Pakistan could be downgraded to FATF’s Black List.
The FATF Grey-Listing might not have abrupt and straight economic consequences, but it definitely brought financial and reputational implications for Pakistan. According to a Pakistani-based Think-Tank, Tabadlab, it has been estimated that Grey-Listing cost the country’s economy $ 38 billion since 2018. Also, there has been a constant fear that the country could be placed on the FATF’s Blacklist any time soon deterring the foreign direct investments in the country.
Thanks to the hard work of civilian governments in collaboration with the armed forces of the country, Pakistan by fulfilling 34 points of FATF’s demand list successfully managed to avert the danger of being put on the Black List.
DG ISPR also commended the Army’s role in getting Pakistan out of FATF’s Grey-Listing saying that “in 2019, at the request of the government, in the GHQ a special cell was formulated under the directions of the COAS. This special cell suggested a complete action plan and all departments, ministries, and agencies executed it. The cell worked days and nights to develop an effective strategy for countering money laundering and terror financing, which was implemented by all departments,”.
Being the worst neighbor, adding insult to the injury, India tried to exacerbate the economic vows for Pakistan. The exuberant Indian lobby tried very hard to push Pakistan into the Black List or at least to keep it on the Grey List by putting many baseless allegations of terror financing and influencing the watchdog’s decision to keep Pakistan striving under economic troubles.
In 2021, Indian External Affairs Minister Jaishankar while addressing a party gathering admitted the Indian hand in ensuing Pakistan in FATF’s Grey List and said that the “BJP government led by Narendra Modi ensured that Pakistan remained on the ‘Grey List’ of the FATF. Due to us, Pakistan is under the lens of FATF”.
In response to Indian External Affairs Minister, a former Pakistani interior minister Senator Rehman Malik (Late) responded and wrote a letter to FATF President Dr. Marcus Pleyer, looking for a probe into India’s role in keeping Pakistan on the Grey List.
However, unfortunately, FATF didn’t act upon his letter and completely neglected the Indian External Affairs Minister’s confessional statement. Malik also advised then Pakistani Prime Minister Imran Khan to file an appeal in the International Court of Justice against the FATF’s discrimination and constant victimization of Pakistan.
Mr. Malik also argued that many other states with more non-compliance to FATF were relishing absolute immunity. He added that the USA has non-compliance of 22.5 %, France 2 %, Israel 12.5 %, and Japan 27.5 %, but none of these states is placed on the FATF’s Grey List.
At the moment it seems like all the efforts made by the Indian lobby and international actors to keep Pakistan under increased financial monitoring by FATF are going to be futile. The exclusion from the Grey List will enhance Pakistan’s imports, exports, remittances, and access to international debts.
Pakistan will have a better access to finances in the form of foreign direct investments and financial backing from global contributors. The exit from the Grey List will further boost Pakistan’s confidence as it could bring long-term economic reimbursements, will have less reputational ramifications, and will also enjoy a conducive environment for its better ties with the West.
