Topics Covered: Important International institutions, agencies and fora, their structure, mandate.
Pakistan to remain on FATF grey list:
Context:
Pakistan will remain in FATF’s ‘grey’ list till February 2021 as it has failed to fulfil six key obligations of FATF.
- To date, Pakistan has made progress across all action plan items and has now largely addressed 21 of the 27 action items.
Background:
The FATF had placed Pakistan on the grey list in June 2018 and asked Islamabad to implement a plan of action to curb money laundering and terror financing by the end of 2019, but the deadline was extended later on due to Covid-19 pandemic.
The points on which Pakistan failed to deliver included:
- Its lack of action against the charitable organisations or non-profit organisations linked to the terror groups banned by the UN Security Council.
- Delays in the prosecution of banned individuals and entities like Lashkar-e-Taiba (LeT) chief Hafiz Saeed and LeT operations chief, Zaki Ur Rahman Lakhvi, as well as Jaish-e- Mohammad chief Masood Azhar.
Implications:
- With Pakistan’s continuation in the ‘Grey List’, it will be difficult for the country to get financial aid from the IMF, the World Bank, the ADB and the European Union.
- This will further enhance problems for the nation which is in a precarious economic situation.
- Also, there is every possibility that FATF may put the country in the ‘Black List’.
About FATF:
It is an inter- governmental body established in 1989 on the initiative of the G7.
Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.
Member Countries: There are 39 member of FATF, representing most financial centres around the world. This includes 2 regional organisations- GCC and EC. The FATF Plenary is the decision making body of the FATF. It meets three times per year.
What is blacklist and grey list?
Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities.
Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
InstaLinks:
Prelims Link:
- G7 vs G8 vs G20.
- Black vs Grey list.
- Are FATF’s decisions binding on member countries?
- Who heads the FATF?
- Where is its secretariat?
Mains Link:
What is the mandate and objectives of Financial Action Task Force? Discuss its importance for India – Pakistan relations.
Sources: the Hindu.
