Pakistan Comes Closer to Exiting Terror Funding Monitor’s ‘Gray List’

A global agency combating illicit financing said Friday that Pakistan had “substantially completed” internationally agreed upon action plans to address their deficiencies to counter money laundering and funding to terrorist groups. The Paris-based Financial Action Task Force (FATF) in 2018 placed the South Asian nation on its “gray list” of countries with weak mechanisms, and Pakistan agreed to work with the agency to strengthen them. The placement made foreign firms more cautious about investing in Pakistan, which is dealing with a struggling economy and a balance-of-payment crisis. FATF President Marcus Pleyer told a news briefing Friday after its decision-making plenary session in Berlin that they reviewed Islamabad’s progress and concluded it had “largely addressed” two action plans, covering 34 items.

“The FATF has now recommended an on-site visit to check that Pakistan’s reforms are in place and can be sustained into the future,” Pleyer said. “Pakistan is not being removed from the gray list today. The country will be removed from the list if it successfully passes the on-site visit.”

Pleyer declined to discuss a date for the on-site visit but said it would take place before the next plenary session in October to enable FATF members to “make an informed decision whether to remove Pakistan from the list.

“Pakistan has demonstrated that it is now pursuing terrorist financing investigations and prosecutions against senior leaders of U.N.-designated terrorist groups and pursuing money laundering investigations and prosecutions in line with its risk profile,” the outgoing FATF president noted. Pleyer hailed the reforms as “good for the stability and security” of Pakistan and the region. They would ensure that authorities in Pakistan “can more effectively" tackle money laundering and funding of terrorist groups, he added. Pakistan welcomed Friday’s announcement by the global agency and hailed the authorization of the on-site visit “as a final step” for the country “to exit from the FATF’s gray list.”

A Foreign Ministry statement said Pakistan had covered a lot of ground in the anti-money laundering (AML) and counter-financing of terrorism (CFT) regime during implementation of FATF action plans.

“The engagement with FATF has led to the development of a strong AML/CFT framework in Pakistan and resulted in improving of our systems to cope with future challenges.”

Pakistan’s deposed prime minister Imran Khan, while responding to the outcome of FATF’s plenary session, said it was his government that had set the stage for his country’s possible exit from the gray list.

“We not only averted blacklisting, but also completed 32 out of 34 action items. We submitted compliance report on remaining 2 items in April based on which FATF now declared Pak's Action Plan as completed,” Khan wrote on Twitter.

“I am confident that prerequisite on-site visit of FATF team to confirm completed work on our action plan will pass successfully too,” he added. An opposition-led parliamentary no-confidence vote ousted Khan’s nearly 4-year-old government in April, a move the former prime minister condemned as illegal and an outcome of a U.S.-instigated plot against him, charges Washington rejects.

Pakistan actions

In a significant move in April, a Pakistani court sentenced an anti-India Islamist cleric, Hafiz Saeed, to 33 years in prison after he was tried in two cases of terror financing. Saeed, the founder of the outlawed Lashkar-e-Taiba militant group and the head of its banned charity wing, Jamaat-ud-Dawa, has been designated as a global terrorist by the United States for allegedly playing a role in the 2008 Mumbai terror attacks that killed more than 170 people.

“The sentencing of Hafiz Saeed is just one example of significant actions taken to curb terrorism,” said Adam Weinstein, a research fellow at the U.S.-based Quincy Institute for Responsible Statecraft.

“Pakistan passed legislation to counter terrorism and most importantly enforced it," Weinstein told VOA. "This is why the FATF determined that Pakistan completed its action plans.”

Michael Kugelman, an expert on South Asian affairs at Washington’s Wilson Center, described FATF’s approval of Pakistani efforts as a “giant leap forward” in its bid to exit the gray list.

“Facing a worsening economic crisis and having been stuck on the list for four years, a status that has some reputational costs and may deter some investors, this couldn’t come at a better time for Pakistan.”

A FATF “blacklist” comprises countries considered noncooperative and supportive of terror financing as well as money laundering activities. Placement on that list triggers international economic sanctions and restrictions in the nations' dealings with foreign lending institutions. Iran and North Korea are the only two currently blacklisted countries.