The Asia Pacific Group (APG) of the Financial Action Task Force (FATF) has placed Pakistan in the ‘Enhanced Blacklist’ due to its failure to act on terror funding. They also found that Pakistan was non-compliant on 32 of the 40 compliance parameters of terror financing and money laundering. Pakistan was judged poorly on 10 out of 11 effective parameters of terror financing and money laundering.
The decision to blacklist Pakistan was taken by the APG during its meeting in Canberra, Australia. This was based on a five-year mutual evaluation of Pakistan’s progress on upgrading its systems in areas of financial and insurance services and various other sectors. An Indian official privy to the development said that despite its efforts, Pakistan could not convince the 41-member plenary to upgrade it on any parameter. Now, Pakistan has to focus on avoiding the blacklist in October 2019, when the 15-month timeline ends on the FATF’s 27-point action plan.
The decision of APG is problematic for Pakistan because such rankings will minimise its chances of getting loans from international credit agencies or even attract foreign investments. Moreover, Pakistan is currently going through one of its worst economic crises. At the time of the meeting in Canberra, Pakistan Prime Minister Imran Khan accused India of lobbying to get it blacklisted.