Why and how many times Pakistan has been grey-listed by FATF?

FATF was first initially established for developing policies to help fight money laundering.

Pakistan grey-listed by FATF

Last month, the Financial Action Task Force decided to keep Pakistan on its ‘grey list’ until February 2021. The inter-governmental organization praised the country for its progress on 21 of 27 recommendations, but said the rest must also be implemented.

When was FATF established?

FATF was established in 1989. The inter-governmental organization was responsible for developing policies to help fight money laundering, and promote the effective implementation of legal, regulatory, and operational measures regarding threats to the international financial system’s integrity.

Initially, this was the extent of the organization’s role. In 2001, after the fall of the World Trade Center on the 11th of September, the organization saw a significant increase in its responsibility when it was also made responsible for keeping track of terrorism financing.

Why and how many times Pakistan has been grey-listed by FATF?

  1. Pakistan was first grey-listed by the FATF in 2008 for a brief period but quickly came out of it.

The FATF identified Pakistan as a country posing a high risk of money laundering and being non-supportive in applying international rules on terrorist financing.

  1. The grey-listing happened again in 2012, and this time remained until 2015.

This one had come because of a 2012 report by the 41-country organization, which recommended controlling the financial flow to terrorist organizations with its Asia Pacific Group to deal with the region’s countries.

Pakistan was suspected to be one of the countries where strict anti-money laundering and counter-terrorist financing measures were to be taken, based on the 2012 FATF recommendations.

  1. However, perhaps the curtest grey-listing was in June 2018, the current one, because Pakistan was only given 15 months to implement the terms of the FATF action plan. Following this, a document known as the Mutually Evaluated Report (MER) was published to explain why Pakistan was grey-listed this time.

The document was primarily divided into two parts – Money Laundering and Terror Financing. The MER was so detailed and went into every small and minuscule aspect of money laundering. Experts found every fault, crack, cleavage, and a hole in the country’s legal, administrative, judicial, security, political infrastructure and how corrupt leaders deliberately destroyed it’.

What are your views on this? Share with us in the comments below.

  • Money laundering in pakistan is going on right from the eighties continuously .Where were these people then.

  • Why Pakistan is not member of FATF? How India, Turkey, Saudia become member of FATF? if someone knows please share

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