"It was again decided by consensus that FATF would retain Pakistan on the Grey List and warn Pakistan that if it did not complete its full Action Plan and show significant and sustainable progress action will be taken," an official privy to the development said

The FATF noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba and Jaish-e-Mohammad, responsible for series of attacks in India. (Reuters photo)

Global terror financing watchdog FATF on Friday kept Pakistan on its ‘Grey List’ till February next year for its failure to take adequate action against money laundering and terror financing. The Paris-based Financial Action Task Force (FATF) after its five-day plenary, which concluded here on Friday, noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba and Jaish-e-Mohammad, responsible for series of attacks in India. Retaining Pakistan on its Grey List, the FATF warned Islamabad of action for its failure to combat money laundering and terror financing, officials said.

The terror financing watchdog will take a final decision on Pakistan’s position in February next year. “It was again decided by consensus that FATF would retain Pakistan on the Grey List and warn Pakistan that if it did not complete its full Action Plan and show significant and sustainable progress action will be taken,” an official privy to the development said. By making this decision public, the FATF has given notice to the global financial institutions that they need to prepare to red flag the jurisdiction and ready their systems for the eventuality in February 2020. If Pakistan continues with the ‘Grey List’ or put in ‘Dark Grey List, it would be very difficult for the country to get financial aid from the IMF, the World Bank and the European Union, making its financial condition more precarious.

Such action could include calling upon global financial institutions to give special attention to business relations and transactions with Pakistan. This language is the same as used for Iran, which is already on the Black List. The FATF discussed all jurisdictions, which are under review, including Pakistan and there was consensus on Pakistan, with its poor performance on the 27-point Action Plan, despite expiry of its 15-month timelines. “It was noted that Pakistan was able to address only five out of 27 items. It was unanimously decided to express serious concern with overall lack of progress in addressing its transnational terror funding risks,” the official said.

In light of the additional fact of Pakistan’s poor performance on its mutual evaluation, chances of Pakistan exiting the Grey List in the next few years are now reduced to nil and the possibility of a formal Black Listing in February 2020 is now highly probable.

The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system. Pakistan was placed on the Grey List by the FATF in June last year and was given a plan of action to complete it by October 2019, or face the risk of being placed on the black list with Iran and North Korea.