Global anti-terrorism watchdog Financial Action Task Force on Friday retained Pakistan on its “grey list” for failing to completely comply with a 27-point action plan to combat terrorism.
“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring,” the organisation said. “This list is often externally referred to as the ‘grey list’.”
The decision was taken during the watchdog’s five-day virtual plenary meeting.
The Financial Action Task Force, or FATF, said that Pakistan has completed 26 of the 27 action items in its 2018 action plan, except the one on targeting the leaders and commanders of United Nations-designated terrorist groups.
“The FATF encourages Pakistan to continue to make progress to address as soon as possible the one remaining CFT-related [counter-terrorist financing] item by demonstrating that TF [terrorist financing] investigations and prosecutions target senior leaders and commanders of UN [United Nations] designated terrorist groups,” it said.
Experts have said the last remaining action item was significant as Pakistan has not given indications that it will prosecute the commanders and leader of eight UN-designated terrorist groups named by the FATF earlier, according to the Hindustan Times. These terrorist groups are the Taliban, Haqqani Network, Lashkar-e-Taiba, Jaish-e-Mohammed, Jamaat-ud-Dawah, Falah-e-Insaniyat Foundation, al-Qaeda and the Islamic State.
So far, Pakistan has only sentenced Lashkar-e-Taiba founder Hafiz Saeed and his close aides, according to the newspaper. Saeed, who is also the chief of Jamaat-ud-Dawa, and his two close aides – Zafar Iqbal and Yahya Mujahid – have been sentenced to 10 and a half years each. No action has been taken against other leaders such as Jaish-e-Mohammed chief Masood Azhar. New Delhi alleges that Pakistan was continuing to provide shelter to Azhar, who is wanted in India for the Pulwama terror attack, the 26/11 Mumbai attacks and several other incidents.
In its statement, FATF said that Pakistan has also made progress to address strategic deficiencies in its new action plan that focuses on combating money laundering. It, however, pointed out that the country should focus on certain areas including:
- Enhancing international cooperation by amending its money-laundering law
- Demonstrating that it has sought assistance from foreign countries in implementing United Nations Security Council resolution 1373 pertaining to combating terrorism
- Demonstrating that supervisors are conducting site supervision for specific risks associated with Designated “Non-Financial Business and Professions”, including applying appropriate sanctions. These businesses and professions are considered susceptible to money laundering and terrorist financing, according to FATF.
- Demonstrating that proportionate and dissuasive sanctions are applied consistently to all legal persons and legal arrangements for non-compliance with beneficial ownership requirements
- Demonstrating an increase in money laundering investigations and prosecutions and that proceeds of crime are restrained and confiscated in line with Pakistan’s risk profile
- Demonstrating that “Non-Financial Business and Professions” are being monitored for compliance with financing requirements and that sanctions are imposed for non-compliance.
The FATF also noted that Pakistan has made progress to complete two of the three remaining action items on demonstrating that effective sanctions are imposed on terrorist financing convictions and that the financial sanctions were being used effectively against terrorist assets. The anti-terrorism watchdog had retained Pakistan under the “grey list” in February till June for failing to meet these three requirements, including the current item.
India, which is a member of FATF, has repeatedly asked Pakistan to take necessary steps to meet international standards in stopping financial crimes.