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FATF retains Pakistan in grey list
Read more on - Polity | Economy | Schemes | S&T | Environment
- What happened: The Financial Action Task Force (FATF) has decided to retain Pakistan on the “greylist” till the next review of its performance on its recommendations during the June Plenary session.
- Details: During the October-2020 Plenary, due to the Covid-19 pandemic, Pakistan was given an extension for full compliance with the 27-point action plan till February 2021. It had then not fully complied with 6 of the 27 directives. The FATF had issued the 27-point action plan after placing Pakistan on the ‘Grey List’ in June 2018. The action plan pertains to curbing money laundering and terror financing.
- FATF acknowledged Pakistan’s significant progress in combating terrorism, however it was still to fully comply with three of the 27-point action plan.
- The three points pertain to effective steps in terms of financial sanctions and penalties against the terror funding infrastructure and the entities involved.
- After assessing the measures taken during the June 2021 session, the FATF would verify the implementation and test the sustainability of reforms undertaken by Pakistan, to review its inclusion or exclusion on the grey list.
- Significance: In Pakistan's case, the FATF has taken cognisance of the inaction against several banned organisations involved in raising funds for terror activities and those linked to global terrorists like Jaish-e-Mohammed chief Masood Azhar and Lashkar-e-Taiba’s Hafiz Saeed and its operations chief Zaki-Ur Rahman Lakhvi. On several occasions, India has also raised the involvement of elements within Pakistan in a number of terror cases, including the 26/11 Mumbai and Pulwama attacks. Perpetual containment of Pakistan on the grey list of FATF would further pressurise Pakistan to take adequate measures to prevent such terrorist attacks on India from its soil.
- Financial Action Task Force (FATF): It is an inter-governmental body established in 1989 during the G7 Summit in Paris. The FATF assesses the strength of a country’s anti-money laundering and anti-terror financing frameworks, however it does not go by individual cases.
- Objectives - To set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
- Headquarters - Its Secretariat is located at the Organisation for Economic Cooperation and Development (OECD) headquarters in Paris.
- Member Countries - The FATF currently has 39 members including two regional organisations — the European Commission and Gulf Cooperation Council. India is a member of the FATF.
- Sessions - The FATF Plenary is the decision making body of the FATF. It meets three times per year.
- Lists under FATF:
- Grey List - Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
- Black List - Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
- Knowledge centre:
- Terror financing - Any crime which results in a profit can be used to finance terrorism. This means that a country may face terrorism finance risks even if the risk of a terrorist attack is low. Sources of terrorist funding include, but are not limited to, low-level fraud, kidnapping for ransom, the misuse of non-profit organizations, the illicit trade in commodities (such as oil, charcoal, diamonds, gold and the narcotic “captagon”), and digital currencies. By disrupting the flow of terrorist funding and by understanding the funding of previous attacks, we can help prevent attacks in the future.
- Bioterrorism - Bioterrorism is the deliberate release of viruses, bacteria, toxins or other harmful agents to cause illness or death in people, animals or plants. The threat from bioterrorism is real, with current reports indicating that individuals, terrorist groups and criminals have both the capability and intention to use biological agents to cause harm to society. Access to knowledge and data is also increasingly available through the Internet, and criminals use hidden and anonymous streams of communication, such as the Darknet, to buy, sell and share data and communicate with each other. The damage caused by such an event could reach untold magnitude, causing widespread illness and death, and instilling fear and panic on a global scale.
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