Pakistan to stay on FATF ‘greylist’ over failure to convict UNSC-designated terror leaders

The FATF also said that Pakistan should continue to work to address its strategically-important deficiencies.

Updated - June 26, 2021 02:01 am IST

Published - June 25, 2021 07:12 pm IST - New Delhi

Pakistan was retained on the greylist, or list of countries under “increased monitoring”, at the Financial Action Task Force (FATF) once again, as the Paris-based UN watchdog judged it deficient in prosecuting the top leadership of UN Security Council-designated terror groups; the list includes Lashkar-e Toiba, Jaish-e Mohammad, Al Qaeda and the Taliban.

Announcing the decision at the end of its latest Plenary session held virtually from June 21-25, the FATF said despite completing 26 of the 27 tasks it had been handed, Pakistan’s failure to complete the last task on convicting terrorists and terror entities meant it would not be delisted for now.

Also read: Previous Pak. governments did not curb terrorist financing and money laundering: Shah Mahmood Qureshi

In addition, the FATF has handed down another 6-point list of tasks mainly on money laundering actions to be completed as well.

“The FATF encourages Pakistan to continue to make progress to address as soon as possible the one remaining Countering Finance of Terrorism (CFT)-related item by demonstrating that Terror Financing investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups,” FATF President Marcus Pleyer said.

During the FATF proceedings, Pakistan is believed to have provided documentation to show that it has prosecuted around 30 UNSC designated terrorists and their associates, charging them in 70 terror financing cases, of which convictions were granted in about 50 cases.

Also read: FATF | On the warpath against terror financing

Those convicted on terror financing charges in the past few months include LeT chief Hafiz Saeed and operations commander Zaki-ur Rehman Lakhvi, who are wanted in India for the 26/11 Mumbai attacks. JeM chief Masood Azhar, wanted in India for a number of terror attacks, including the Pathankot airbase attack and Pulwama bombing, has been charged for terror financing, but not convicted yet. MEA officials have called most of the cases an “eyewash” ,pointing out that many of the charges and convictions were timed ahead of various FATF meetings.

India ‘politicising’ FATF process: Pakistan

Reacting to the FATF decision at a press conference in Islamabad, Pakistan’s Energy minister Hammad Azhar accused India of attempting to “politicise the process” at the FATF.

“Whether [India] admits it or not, everyone at FATF knows that India’s goal is to make the technical forum a political one [by targeting] Pakistan. This is something we have raised with FATF officials in Paris as well,” he said.

The MEA did not respond to Mr. Azhar’s accusation, but has in the past, dismissed all such charges.

In the weeks leading up to the FATF plenary, Pakistan had been fairly confident of being let off the greylist during this session.

Unlike the next level “blacklist”, greylisting carries no legal sanctions, but it attracts economic strictures and restricts a country’s access to international loans, and Pakistan’s Foreign Minister Shah Mehmood Qureshi had estimated a loss of $10 billion annually to the Pakistani economy for every year Pakistan has been on the greylist. He had said earlier this week that there was “no justification” for retaining Pakistan on the list, now that it had been adjudged compliant on 26 of 27 points.

However, when asked on Friday whether Pakistan was treated fairly, given it had only one outstanding task, the FATF President was firm about the decision.

“Our rules and procedures are very clear, all deficiencies must be addressed,” adding that the FATF, which works on Mutual Evaluation Reports (MERs) by members, “treats all countries equally”.

Mr. Azhar, who has been overseeing the FATF process in Pakistan, said the new combined action list of seven points was “relatively less challenging” than the previous 27-point list handed down in 2018, as it focusses largely on money laundering and not terror financing, and that he was hopeful that Pakistan would be found compliant “within a year”.

Among the tasks handed down by the FATF on Friday, apart from the need to prosecute all UNSC terror entities successfully and seeking assistance from foreign countries to implement the UNSC designations, Pakistan is expected to amend its Money-Laundering Act, crackdown on Designated Non-Financial Businesses and Professions (DNFBPs) like real estate agencies and gemstone traders, confiscate and freeze assets of money laundering entities and monitoring businesses for proliferation financing, with sanctions for non-compliance.

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