The Financial Action Task Force after completing their plenary session on 19th October 2019 decided to enlist Pakistan on the Grey List. Pakistan was warned by them that they will be put on the Black List if they do not stop the terror funding by February 2020. Not all members of the FATF supported the decision to immediately blacklist Pakistan.
The effort to blacklist Pakistan was led by India and was supported by the USA, France and other countries of the European Union. Some resistance was shown by China, Turkey and Malaysia. FATF is an important topic for aspirants preparing for the UPSC Civil Service Examinations. Continue reading this article to know about the FATF Grey List from the UPSC point of view.
What is the Financial Action Task Force?
The Financial Action Task Force is an intergovernmental body that was established in 1989 in Paris during the G7 summit. It began with the aim of improving standards and implementing legal, operational, and regulatory measures to combat terrorist financing, money laundering and other threats related to the integrity of the international financial system.
The secretariat of the Financial Action Task Force is located at the Organisation for Economic Cooperation And Development headquarters in Paris. The FATF currently has 39 members and they include the European Commission and the Gulf Cooperation Council. The FATF Plenary is the body that makes all the decisions regarding the FATF. It meets three times a year.
Various Lists Under
- Grey List: This list contains countries that are considered a haven to support terror funding and money laundering. The countries included in this list are served a warning that they might be blacklisted.
- Black List: Countries that are considered as Non – Cooperative Countries are put under this list. These countries generally support money laundering and terror funding. The Financial Action Task Force keeps revising the blacklist regularly, adding and deleting entries. There are only two countries on the FATF’s blacklist: Iran and North Korea.
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Pakistan Added on the FATF Grey List
Pakistan was placed on the Grey List in June 2018 after issuing a 27 – point action plan. They planned to curb terror financing and money laundering. The task force’s International Cooperation Review Group said that Pakistan compiled 21 of the 27 points. Pakistan was asked to complete the action plan by February 2021. Pakistan was not able to deliver on the actions against non – profit organizations linked to terror groups banned by the United Nations Security Council. They were also not able to prosecute banned individuals and entities like Lashkar- e Taiba Chief Hafiz Saeed, and Jaish – e – Mohammad chief Masood Azhar.
Saeed was sentenced to prison in February 2020 for 11 years on the charges of terror financing. The Pakistan government claims that Hafiz Saeed is “untraceable”. Pakistan was found non – competent in cracking down on terror financing via smuggling of mining products and narcotics including precious stones. After getting listed in the Greylist, it is extremely difficult for Pakistan to get financial aid from the International Monetary Fund (IMF), the European Union and the World Bank.
Response of Different Countries and India’s Stand
Turkey mentioned that the members should take into account Pakistan’s good work and instead of completing all the 27 parameters, the FATF on-site team should visit Pakistan to make a final assessment. An on-site team can only visit the nation in question once they complete their action plans. Normally such a visit would indicate an exit from the grey or blacklist. This proposal was not supported by any other country once this was placed before the Plenary, not even by Saudi Arabia, China and Malaysia.
India believes that Pakistan continues to provide safe havens to terrorists and other individuals. They have also not yet taken any action against terrorists including those proscribed by the UNSC, such as Dawood Ibrahim, Masood Azhar and Zakir – ur- Rahman Lakhvi.
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Conclusion
This article might have given you a clear idea of what FATF is and the impacts it has had on the foreign relations between different countries. This is an important topic from the point of view of both prelims and mains.
While preparing for the UPSC exam one must read the newspaper daily to keep updating their knowledge. It is also recommended by toppers that students must refer to UPSC booklets and guides which are available every month. There are multiple articles available on a lot of general science topics on the internet.
Aspirants can also visit the UPSC Pathshala website to read more about current affairs topics, for both the prelims and the mains. These articles are concise and tend to help students prepare in a much better way. Preparing well for the current affairs section will always help you get a good rank in the UPSC civil service examinations.
With articles like these you tap knowledge everyday.