FATF keeps a “grey list” of nations it closely monitors. In essence, these are nations that are on a global terrorist watch list for terrible behavior because, in the FATF’s opinion, they failed to stop international money laundering and terrorist financing. After four years, Pakistan has been removed from the Financial Action Task Force’s (FATF) “grey list,” a development that has been warmly received throughout the nation.
The Financial Action Task Force (FATF) is frequently referred to as the “terrorism financing watchdog” of the world, which denotes that it is the creator and keeper of a global regime that continues to work to make sure that the money flows in the international financial system are not abused to fund terrorist activities. According to its mission statement, the Financial Action Task Force (FATF) is an intergovernmental organization that “sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. These nations are currently “actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing,” according to the statement.
At the highest political level, Pakistan pledged to “work with the FATF to strengthen its AML/CFT regime and to address deficiencies in its counter-terrorist financing-related actions” in June 2018, when it was first placed on the grey list. According to a statement released by the FATF on October 21. Pakistan has strengthened the effectiveness of its AML/CFT regime and addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies that the FATF identified in June 2018 and June 2021, the latter of which was completed ahead of the deadlines, encompassing 34 action items in total. But everyone needs to understand that Pakistan must keep up its efforts to combat terrorism and the financing of terrorism that comes from its controlled areas. Over the course of completing the demands of both Action Plans, Pakistan has made enormous strides in the Anti Money Laundering and Countering Financing of Terrorism (AML/CFT) domain. Pakistan maintained its reform trajectory and upheld the high-level political commitment to align its domestic AML/CFT regime with global best practices despite numerous obstacles, including the Covid-19 pandemic.
According to research, grey-listing harms the relationships of the concerned nations with foreign funders, such as banks and financial institutions that pay attention to the FATF rankings, as well as with current and potential foreign investors in those nations. The country’s economy, already in disarray due to a growing current account deficit, inflation above 20%, and a sharp depreciation of the rupee, has been further weakened by recent widespread floods in Pakistan. Pakistan expresses gratitude to the FATF participants and the international community for their crucial assistance during the Action Plan’s implementation. Foreign scrutiny of international transactions would decrease and there would be an increase in foreign direct investment, which had recently shown a downward trend if Pakistan were to get off the “grey list. Pakistan affirms that it will keep advancing this win-win cooperation in order to maintain the benefits. Pakistan also looks forward to collaborating and exchanging ideas with other nations to improve the efficacy of FATF standards on a global scale.