Pakistan to remain on FATF greylist

What is the News?  

The Financial Action Task Force (FATF) has decided to keep Pakistan in its “grey list”.  

Background:  

• The FATF had issued the 27-point action plan after placing Pakistan on the ‘Grey List’ in 2018.The action plan pertains to stop money laundering and terror financing.  

What is the status of the 27-point action plan?  

• Pakistan has completed around 26 of the 27 items given to it in the 2018 action plan to combat terror-financing.   
• However,  Pakistan couldn’t exit the grey list due to one remaining item. It has failed to demonstrate that terror-financing investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.  

About Financial Action Task Force (FATF):   

• The FATF is an inter-governmental body established in 1989 during the G7 Summit in Paris.   
• Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.   
• Members: There are currently 39 members of the FATF; 37 jurisdictions and 2 regional organisations (the Gulf Cooperation Council and the European Commission).  

Listing by FATF:  

• Grey List: Countries that are considered a safe haven for supporting terror funding and money laundering are put in the grey list.   

• This inclusion serves as a warning to the country that it may enter the blacklist.  
• The greylisting carries no legal sanctions. But it attracts economic sanctions and restricts a country’s access to international loans  

• Black List: Countries known as Non-Cooperative are put in the blacklist. These countries support terror funding and money laundering activities.  

Source: The Hindu, TOI