IAS Gyan

Daily News Analysis

The shade of grey: On FATF's mandated tasks

28th October, 2020 Editorial

Context: Pakistan has little option but to complete its FATF mandated tasks in the next four months

The Financial Action Task Force, retain Pakistan on its greylist:

  • Pakistan will now face international strictures on its markets and on its ability to procure loans until the next FATF plenary in February 2021, by which time it is expected to complete the six pending issues.
  • A bigger problem for Islamabad was that Turkey was the only other country in the 39-member FATF to push for Pakistan to be let off, by making a suggestion that the last six points be cleared by an “on-site” visit.
  • The proposal was dropped when even other traditional backers of Pakistan such as China, Saudi Arabia and Malaysia did not support it.

Pakistan has little option but to complete its tasks in the next four months, which include:

  • more action against UNSC-banned terrorists and terror groups,
  • action against charitable organisations (Non-Profits) linked to these banned entities,
  • tracing fugitive terrorists and pursuing convictions against them,
  • revising the list of banned entities under the Anti-Terrorism Act to reflect all those banned by the UNSC, and
  • cracking down on other channels of terror financing through narcotics and smuggling.

Future course:

  • FATF has retained Pakistan on the greylist for the third time this year, and not automatically downgraded it to the blacklist (with Iran and North Korea) when its deadline for action ended in September 2019, has ensured the pressure has continued to make Pakistan accountable on terror.
  • FATF process has made Islamabad more amenable to helping Afghanistan.
  • It remains to be seen if the actions it takes will permanently change Pakistan’s course in supporting and sheltering cross-border terror groups.
  • India’s eventual goal is not just in stopping attacks by these groups, but for Pakistan to fully dismantle the infrastructure of terror in the understanding that it is in Pakistan’s own interests to do so.
  • It is hoped that the prolonged FATF process will enable this realisation in Islamabad.