In News
- Pakistan will continue to be on the ”Grey List” of the FATF as it needs to “further demonstrate” that action is being taken against UN-designated terrorists.
About
- The FATF also announced the ‘greylisting’ of Jordan, Mali and Turkey, following the conclusion of the Plenary session.
- FATF observed that Pakistan needed to further demonstrate that investigations and prosecutions were being pursued against the senior leadership of U.N.-designated terror groups, which include Lashkar-e-Taiba, Jaish-e-Mohammed, al-Qaeda and the Taliban.
Background
- Pakistan has been on the FATF grey list since June 2018 and was asked to implement the FATF Action Plan fully by September 2019.
- It was in the same category from 2012 to 2015 too.
- Pakistan’s inclusion in the grey list can be attributed to the fact that the country’s anti-terror laws are still not in line with FATF standards and also with the latest UN resolution 2462 that pitches for criminalising terrorist financing.
About Financial Action Task Force
- It is an inter-governmental decision-making body. It was established in 1989 during the G7 Summit in Paris to develop policies against money laundering and its Secretariat is located in Paris.
- India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership. On June 25, 2010, India was taken in as the 34th country member of FATF.
- Functions:
- Bring national legislative and regulatory reforms in money laundering and efforts to stop funding for weapons of mass destruction.
- Review money laundering and terrorist financing techniques and continuously strengthen its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity.
- Monitor countries to ensure they implement the FATF Standards fully and effectively and hold countries to account that do not comply with the standards.
- FATF Lists:
- Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put on the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
- Enlisted nations: North Korea and Iran.
- Grey List: Countries that are considered a safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
- Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put on the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
Consequences of being in the FATF Grey List
- The countries in the grey list may face
- Economic sanctions from IMF, World Bank, ADB.
- The problem in getting loans from the IMF, World Bank, ADB and other countries.
- Reduction in international trade.
- International boycott.
Source: TH
