FATF: How to avoid being blacklisted by global financial watchdog?


To be listed on the grey or backlist or to get an exit from these designations by the inter-governmental agency – FATF seems more of a political concern than a technical or ground-based approach as it requires the support of its member countries to exit from these lists.

Currently, as has been the case of Pakistan the country requires the support of at least 3 member countries to avoid being blacklisted by the global financial watchdog and what does it requires to make sure its exit from the grey list is the political support from at least 15 countries which implies 15 votes in favor.

Although this is not the first time that Pakistan has been the point of attention by FATF since it was greylisted back in 2008 and also in 2012 before June 2018 downgrading. The 36 member countries that are currently the part of FATF enjoy voting rights during the plenary meetings of FATF that are held thrice a year of which the third meeting is yet to take place by October this year.

Pakistan catered the support of Malaysia, Turkey, and its instant neighbor and friend China during the second meeting of FATF that took place in June but this can’t be considered as a final win because the third and final meeting of the global financial watchdog is yet to happen.

Pakistan is required to take stern action against the illegal money transfer services, stop the illicit movement of currency, enhanced coordination, and cooperation between the provincial and federal authorities to comply with the terms and conditions of FATF.

Action must be taken against the persons or organizations proscribed by the United Nations, curbing the finances of terror-spreading outlets including the confiscation of their assets both movable and immovable.

Indian factor and strong Indian lobby can not be neglected whilst considering the role it can play to negatively portray Pakistan. Current rumors by Indian news outlets announcing Pakistan’s blacklisting by FATF’s close associate the Asia Pacific Group(APG) proves India’s bigotry to negatively paint the international standing of Pakistan.

Let alone the warning issued to Pakistan regarding overcoming the trans-national terror-financing risks, the country must win the support of FATF members by intensifying the diplomatic efforts especially highlighting the counter-terrorism efforts that it has continued for years despite sensitive geopolitics of the region.

Exclusion from the greylist of FATF is necessary for the international image building of the country and especially to avoid any negative confrontations with the investors and international lenders that are crucial to avert the existent economic fiasco.

If India can successfully avoid the international backlash despite severe violations of minorities’ and human rights within its territory then Pakistan must not underestimate the persuasive approach towards the international community.

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