The Paris-based Financial Action Task Force (FATF) on Friday decided to keep Pakistan under scrutiny in its ‘grey list’, dashing Islamabad’s hopes of exiting the list of countries closely monitored for diversion of finances to terrorist groups and organizations.
The three-day plenary session of FATF, which monitors money-laundering and terrorist financing, closed on Friday, urging Pakistan to do more to curb flows of funds to terrorist groups. This means the country will continue to be under the scanner till the next FATF meeting expected in February 2021. The decision comes despite Pakistan mounting a determined effort to lobby world leaders to exit the list, for which it needs support from 12-15 of FATF’s 39 members.
A statement from the global terror finance watchdog said Pakistan “should continue to work on implementing its action plan to address its strategic deficiencies, including by demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF (terrorist financing) activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities.”
“Pakistan also needs to demonstrate that TF prosecutions result in effective, proportionate and dissuasive sanctions,” it said.
According to a person familiar with the matter, who spoke on condition of anonymity, this means measures that are seen as cosmetic without lasting impact will not do.
Pakistan will also need to demonstrate “effective implementation of targeted financial sanctions against all 1,267 and 1,373 designated terrorists, and those acting for or on their behalf, preventing the raising and moving of funds including in relation to non-profit organizations identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services,” it said.
According to the person cited earlier, this refers to taking action against those deemed terrorists and terrorist organizations like the Lashkar-e-Toiba and the Jaish-e-Mohammed by the UN Security Council in its resolutions.
Besides this, Pakistan needed to show “enforcement against TFS (targeted financial sanctions) violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases,” it said.
The FATF also took note of the “significant progress” made on “a number of action plan items.” “To date, Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items,” it added.
