FATF asks Pakistan to deliver on action plan to stop terror financing, sets Feb 2020 deadline

NEW DELHI: Paris-based international terror financing watchdog, Financial Action Task Force (FATF), on Friday kept Pakistan on the Grey List and warned that the country would be blacklisted if it failed to take action against terror funding and money laundering by February next year, when the next plenary is due.
At the end of the plenary, FATF voiced concern over Pakistan's failure to act on its 27-point action plan with Islamabad showing compliance only in five of them.
A statement issued by the global body said, "Strongly urge(d) Pakistan to swiftly complete its full action plan by February 2020. Otherwise should significant and sustainable progress not be made across the full range of its action plan by next Plenary, the FATF will take action."
Pakistan has consistently underperformed on all the parameters that had been set for it, particularly on the 27-point action plan, going past 15-month deadline.
Islamabad needed three votes to stay out of the blacklist, which it secured from Malaysia, Turkey and China. However, in the discussions, there was a general consensus that Pakistan was not in compliance on most of the action items.
Sources present at the discussions said China, US, Germany, France, UK, Turkey and Malaysia, among others, agreed to this enhanced warning to Pakistan, creating a consensus.
But a new way around the politics of FATF appears to have been found. Pakistan may be off the blacklist, but the FATF statement by China's Xiangmin Liu was clear on the steps that could be taken against Pakistan in case of non-compliance.
French diplomatic sources told TOI that given that improving compliance is the goal at FATF, "immediate blacklisting of Pakistan did not garner consensus of all FATF members as the most effective response".
"France was very proactive, with its American and European partners, in obtaining a strongly-worded statement on Pakistan. The compliance requirements for the next deadline are important- 'significant and sustainable progress', 'across the range' (has been demanded). It is clear that the FATF will take action if progress cannot be established. There is an explicit threat of being blacklisted, if applicable," said a French source.
The FATF statement said global financial institutions would be instructed to pay "special attention to business relations and transactions with Pakistan". This is the same language which has been used for Iran, already on the blacklist.
It's a warning to Pakistan that even if it is not named in the blacklist, the actions that might follow may be the same as being on the list.
But Pakistan may not get out of the Grey List in a hurry, at least for the next few years.