Pakistan removed from global ‘terrorism’ financing list

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Pakistan has been on the “grey list” of countries at high risk of money laundering and “terrorism” financing since 2018.

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Islamabad, Pakistan – The World Anti-Money Laundering and Financing Service on Friday removed Pakistan from its list of countries under “heightened scrutiny” after four years.

Pakistan has been on the “grey list” of the Financial Action Task Force (FATF) since 2018 due to “strategic weaknesses related to terrorist financing”.

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The decision to remove was announced by FATF President T. Raja Kumar at the end of a two-day meeting in Paris, France.

“Pakistan has addressed technical shortcomings in order to meet commitments on its action plans,” Kumar said in his speech.

At the last meeting of the FATF in June, the organization said that Pakistan would remain on the list until a visit to the country to check progress was made.

Subsequently, a FATF technical team visited Pakistan in late August and Pakistan’s Ministry of Foreign Affairs declared the visit “successful”, saying it expected a “logical conclusion” at the next assessment meeting in October.

Pakistani Prime Minister Shehbaz Sharif tweeted after Friday’s decision was announced, congratulating the country on its repeal.

“Pakistan’s removal from the FATF Grey List is a testament to our determined and tireless efforts over the years. I would like to congratulate our civilian and military leadership, as well as all the institutions whose hard work has led to today’s success,” he wrote.

Following the country’s greylisting in 2018, the FATF provided Pakistan with a 27-point action plan, which was later increased to 34 points related to money laundering, terrorist financing and actions against armed groups and individuals.

Getting into this list can seriously limit the country’s ability to international borrowing.

The decision came at a time when Pakistan’s credibility in the world market was shattered due to its unstable economic situation.

Earlier Friday, global ratings agency Fitch downgraded Pakistan’s sovereign credit rating, blaming the funding situation as well as declining foreign exchange reserves.

Ratings agency Moody’s Investor Service also downgraded Pakistan’s sovereign credit rating earlier in October, citing the government’s declining gold reserves and rising economic tensions following devastating floods earlier this year.

The floods caused by unprecedented monsoon rains have killed more than 1,700 people, affected 33 million people and caused $30 billion in damage, according to the government.

“Keep the Course”

Senior Economist Harun Sharif said the development was great news for Pakistan as it would enable financial flows from banking channels and remittances.

“What the country must do now is not to go astray, and the main obstacle in this is its ability to implement. He must reform the institutions, which can then detect and identify any suspicious transactions and punish all those involved in them,” he told Al Jazeera.

Sharif, who previously served as minister of public investment, said Pakistan should have been removed from the list at the June meeting.

“We have fulfilled all the points of the action plan, but, unfortunately, the FATF also has a political component,” he added.

Business and economics journalist Khurram Hussein also welcomed the removal. “Pakistan had to face higher transaction costs due to the higher processing load that ‘heavy monitoring’ imposed on all transactions with the outside world,” he told Al Jazeera.

Hussain noted that Pakistan returned to the main list due to its failure to successfully prosecute “prohibited persons”.

“After key convictions were handed down, such as against Hafiz Saeed of the Lashkar-e-Taiba (LeT) group and the Jamaat-ud-Dawa (JuD) group in April of this year, the path to exit from the list was opened. ” he said.

JuD is a humanitarian aid and religious education organization operating in Pakistan. He was assigned as a front for LeT, an armed group declared a “terrorist organization” by Pakistan, the United States and the UN.

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