Blacklisting Pakistan under FATF

Blacklisting Pakistan under FATF
GS2&3: Important International institutions, agencies and fora, their structure, mandate Role of external state and non-state actors in creating challenges to internal security.

What is the issue?

  • The Financial Action Task Force (FATF) is to hold its Plenary and Working Group meeting in Orlando, Florida.
  • It is likely to take up a proposal to downgrade Pakistan to the blacklist on terrorist financing from its current grey list status.

BACKGROUND

  • The Financial Action Task Force (FATF) was set up in 1989 by the western G7 countries, with headquarters in Paris.
  • It acts as an ‘international watchdog’ on issues of money-laundering and financing of terrorism.
  • FATF has 37 members that include all 5 permanent members of the Security Council, and other countries with economic influence.
  • Two regional organisations, the Gulf Cooperation Council (GCC) and the European Commission (EC) are also its members.
  • Saudi Arabia and Israel are “observer countries” (partial membership).
  • India became a full member in 2010.
  • Pakistan was placed on the grey list by the FATF in June for failing to curb anti-terror financing.
  • It has been scrambling in recent months to avoid being added to a list of countries deemed non-compliant with anti-money laundering and terrorist financing regulations by the Paris-based FATF, a measure that officials here fear could further hurt its economy.

Present status of Pakistan

  • Pakistan has been under the FATF’s scanner since June, 2018.
  • It was put under the greylist for terror financing and money laundering risks.
  • This was done after an assessment of its financial system and law enforcement mechanisms.
  • FATF and its partners such as the Asia Pacific Group (APG) review Pakistan’s processes, systems, and weaknesses.
  • This is done on the basis of a standard matrix for anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

Pakistan’s subsequent commitment

  • In June 2018, Pakistan gave a high-level political commitment to work with the FATF and APG.
  • It promised to strengthen its AML/CFT regime, and to address its strategic counter-terrorism financing-related deficiencies.
  • Based on this commitment, Pakistan and the FATF agreed on the monitoring of 27 indicators under a 10-point action plan, with deadlines.
  • Successful implementation of the action plan and its physical verification by the APG will lead the FATF to move Pakistan out of the grey list.
  • But failure in implementation and in meeting the deadlines would result in Pakistan’s blacklisting by September 2019.

FATF’s current stance on Pakistan

  • There was only limited progress by Pakistan on action plan items due in January 2019.
  • So FATF, in February, 2019, urged Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019.
  • Pakistan, recently, presented its progress on the 27 indicators in a meeting with the Joint Group of the APG.
  • It was agreed that there have been improvements in the AML/CFT regime and the integrated database for currency declaration arrangements.
  • But the Joint Group informed Pakistan that its compliance on 18 of the 27 indicators was unsatisfactory.
  • The other gaps in progress include the following:
  • contradictory situations and poor coordination among stakeholders
  • lack of cooperation among law enforcement agencies at various tiers of Pakistan’s government
  • insufficient physical action against proscribed organisations to block the flow of funds
  • Pakistan was thus asked to do more to demonstrate strict action against 8 terrorist groups, and in combating money laundering.
  • It must show that terror financing prosecutions result in effective, proportionate and restrictive sanctions.

Location: Thiruvananthapuram, Kerala, India

Comments

Post a Comment

Popular posts from this blog

Geneva Convention 1949

Image
Why is it in news? Pakistan violated the Geneva Convention What is Geneva Conventions? The Geneva Conventions are a series of treaties on the treatment of civilians, prisoners of war (POWs) and soldiers. It is also known as the Humanitarian Law of Armed Conflicts. It was adopted in 1949. It includes four conventions, with three protocols added on since 1949. Their purpose is to provide minimum protections, standards of humane treatment, and fundamental guarantees of respect to individuals who become victims of armed conflicts. These Conventions and their Additional Protocols set out how soldiers and civilians should be treated during armed conflict. What are the four conventions? Convention I: This convention protects wounded soldiers and ensures humane treatment without discrimination based on race, colour, sex, religion or faith, birth or wealth, etc. The convention prohibits torture, assaults upon personal dignity, and execution without judgment. It also grants the ri
Read more

ICJ on decolonisation of Mauritius

Image
Context: The International Court of Justice (ICJ)  dismissed the UK’s right to govern the Chagos Islands  in the Indian Ocean and called on its government to withdraw from the archipelago. What is the issue? The Chagos Archipelago is a group of seven atolls comprising more than 60 islands in the Indian Ocean about 500 km south of the Maldives. It had been part of Mauritius since the 18th century when the French first settled the islands. All of the islands of French colonial territory in the region were ceded to the British in 1810. Before Mauritian independence, in 1965, the UK split the archipelago from the territory of Mauritius to form the British Indian Ocean Territory and permitted the US to use it for defence purposes for 50 years (until December 2016) followed by a 20-year optional extension and US Military Base was setup in Diego Garcia, the largest of the islands. 2,000 inhabitants were resettled in Mauritius and the Seychelles. The UN resolutions banned the
Read more

Global Energy Transition index

Image
About the index Global Energy Transition Index 2019 released by WEF for shaping the future energy with sustainable use along with environment protection. It is System Initiative on Shaping the Future of Energy. The index benchmarks 115 countries on the current level of their energy system performance and the readiness of their macro environment for transition to a secure, sustainable, affordable and inclusive future energy system. It measures how well they are able to balance energy security and access with environmental sustainability and affordability. The report says in order to achieve a stable, sustainable and affordable global energy system will require a collaborative and systematic approach to solving problems and exploiting opportunities such as new technologies of the Fourth Industrial Revolution. Report details – World performance Sweden remains on the top on the list and is followed by Switzerland and Norway in the top three. Among major economics, the UK
Read more