ISLAMABAD: Pakistan’s state minister for foreign affairs on Saturday said the South Asian country was “one step away” from exiting the Financial Action Task Force’s (FATF) “grey list” after the successful completion of the global watchdog’s action plans and its formal endorsement by the international financial crime monitoring group.
The FATF kept Pakistan on the list on Friday but said an onsite inspection to verify progress on countering financing of terrorism and money laundering could lead to the South Asian country’s removal from the list of countries under increased monitoring.
The financial crime watchdog, set up by the Group of Seven industrial powers to protect the global financial system, said Islamabad had substantially completed its two action plans, covering 34 items, as it seeks to get off the list where it has been since 2018.
“The successful completion of the action plans and its formal endorsement by FATF means that Pakistan has come to one step away from exiting from the grey list,” State Minister Hina Rabbani Khar, who is also the chair of Pakistan’s National FATF Coordination Committee, said at a media briefing.
Khar led the Pakistan side at the four-day FATF plenary in Berlin, Germany.
“The on-site visit is a procedural requirement and it marks the beginning of the end-process that will eventually culminate in the exit of Pakistan from FATF’s grey list,” she said.
Islamabad is working closely with the FATF to arrange the onsite visit on mutually convenient dates to conclude the entire process before the next FATF plenary in October.
“They will come to see that the things we have reported in our action plans like legislation, FATF secretariat operations, coordination bodies’ work, national and provincial coordination, work of different working groups,” Khar said.
“I am sure that we will be fully prepared during the onsite visit and will exit the grey list at the earliest.”
She said Pakistan’s cooperation with the FATF and the international community was grounded in the strategic objective of strengthening the country’s economy and further improving its integration with the international financial system.
“I am confident that this good news from FATF will restore confidence in our economy, will give it a much-needed boost and would improve investment climate,” the minister added.
The Paris-based group added Pakistan to the “grey list” in 2018. The list is composed of countries with a high risk of money laundering and terrorism financing but which have formally committed to working with the task force to make changes.
At the time, the South Asian country avoided being put on the organization’s “black list” of countries that do not take adequate measures to halt money laundering and terror financing but also have not committed to working with the FATF. The designation severely restricts a country’s international borrowing capabilities.
Exiting the grey list is likely to increase foreign inflows, specifically direct investment, into Pakistan.
