The Financial Action Task Force (FATF) will meet in Paris on Sunday to assess Islamabad's steps to curb terror financing and money laundering, as mandated by the global watchdog.
In June this year, the FATF had warned Pakistan, which is already in the 'Grey List' (watch list) of severe action for failing to do enough to check terror financing, to comply with the requirements by October 2019.
If the country fails to take necessary steps by October, the FATF can place the country in 'Black List', following which, Pakistan will no longer be able to get loan and aid from international financial institutions like the IMF and World Bank.
After its meeting in June, the FATF had said Pakistan should show "effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services."
Pakistan also needs to demonstrate that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS).
Created by G-7 (Group of 7 industrialised nations) in 1989, FATF aims to develop policies to combat money laundering. In 2001, its mandate was expanded to include terror financing.
The global body, which currently comprises 37 countries and two regional organisations representing most major financial centres across the world, will have Plenary and Working Group meetings in Paris from Sunday till October 18.
Currently, China holds the Presidency of the FATF, which is working to mitigate the money laundering and terrorist financing risks of new technologies and at the same time exploit the opportunities to more effectively fight these risks. The FATF is also prioritising work to promote and enable more effective supervision by national authorities.
Virtually setting the tone for the FATF's main meeting, the Asia-Pacific Group (APG) of the world body on August 23 expressed unhappiness with Pakistan, saying it had failed to meet the requirements on acting against terror financing and money laundering on 32 out of 40 parameters and put it in the 'Enhanced, Expedited Follow-up List' (meaning blacklist).
The APG, which is one of the nine regional affiliates of the FATF, during its meeting in Canberra in Australia from August 18 to 23 expressed dismay at Pakistan for non-compliance and non-enforcement of safeguards against terror funding and money laundering as it held a five-year review of the Mutual Evaluation Report (MER) for the country.
The APG observations are not punitive but its recommendations will be considered during the FATF Plenary in Paris.
In a statement issued on June 22 after its three-day deliberations, the global body said, "The FATF expresses concern that not only did Pakistan fail to complete its action plan items with January deadlines, it also failed to complete its action plan items due May 2019."
It added, "The FATF strongly urges Pakistan to swiftly complete its action plan by October 2019 when the last set of action plan items are set to expire. Otherwise, the FATF will decide the next step at that time for insufficient progress."
However, Pakistan may escape being placed in the 'Black List' with the help of China, Malaysia and Turkey but its record on fighting terrorism will not allow it to be removed from the 'Grey List'.
(With inputs from IANS.)
