The sword of FATF hangs over Pakistan as the body is set to meet to decide the fate of Pakistan- whether it is downgraded into ‘High-Risk Jurisdictions subject to a Call for Action’ aka blacklist or remains stuck in the list of ‘jurisdictions with strategic deficiencies’ also called as a grey list. Financial Action Task Force is an international watch-dog to curb money laundry, human trafficking, and terror financing. Pakistan has had a history with FATF, but now as it has successfully eliminated the menace of terrorism, there is little to no point of putting it in the grey list of FATF. Some hostile countries are trying to malign Pakistan’s efforts and interfere in the process of watch-dog to get Pakistan blacklisted.

Pakistan’s affair with FATF goes back to 2008 when it was first put in the grey list but it managed to get itself a clean chit after following the recommendations of FATF and eliminating terrorism from its roots. It again landed in trouble in 2012 and escaped after three years in 2015.

At present, Pakistan is again in hot waters. After aggressive tweets by Trump against Pakistan and India’s intensive lobbying, Pakistan was thrown into the grey list in June 2018. It only needed three votes to not go in the list but brotherly country Saudia Arabia- convinced by the United States- and friendly country China – to get itself presidency of the body- voted against Pakistan pushing it into the grey list.  Since then it has remained under intensive scrutiny by the FATF- Asia Pacific group. It has been unsuccessful in jumping out of the list during plenary meetings of the FATF.

After all the efforts and strict compliance, why is Pakistan unable to exit the list of no so good guys? One of the reasons is that India is trying to influence the body overtly and covertly to destroy Pakistan economically. FATF is apolitical, but India has politicized it as it has made SAARC redundant by politicizing it. India presented dossier against Pakistan in the FATF meeting in October 2019 so that it could push Pakistan into blacklist altogether. India is also using diplomacy and lobbying to convince the friends of Pakistan to vote against it. Most recently, on 7th August 2020, India has upgraded its efforts to degrade Pakistan. It has vied to present Pakistan as terror financing state by taking the case of Dawood Ibrahim in the United Nations Security Council. It has requested UNSC to enhance its cooperation with FATF in an attempt to increase pressure on Pakistan. India, by doing so, is endeavoring to take the attention off the Kashmir issue – UNSC has thrice carried out behind the door meeting over Kashmir issue.

India is not the only country that wants Pakistan on this list. United States – who has more significant influence and saying in FAFT- also wants to Pakistan on the grey list though not in blacklist.  The US is using the grey list to twist Pakistan’s arms to get its cooperation in the Afghanistan peace process. It is also a method employed by the US to ask Pakistan ‘do more’ on the issue related to terrorism.

Blacklist will have severe consequences for the economy of Pakistan. Its major transactions will be monitored, economic sanctions will be employed over Pakistan, and prohibited measures will be taken against it. It is not only Pakistan who is going to suffer if blacklisted, but the entire region is also going to be affected. If Pakistan melts down economically, there will be mushroom growth of terrorist outfits, and there will be unrest in the whole region. A most crucial aspect of this is that the troubles of India in Kashmir will be mounted. Therefore, India should think through its policy of economically bleeding its neighbor.

At this point – with damage done by Covid-19 to the economy- it is imperative for Pakistan to get itself out of the grey list. First of all, it should religiously follow twenty-six-point recommendations by the body.  Recently it has passed a Mutual Legal Assistance Bill, 2020 following recommendations. It shows the seriousness of Pakistan. Secondly, it should firmly raise its concern over India co-chairing the proceedings against Pakistan. It should highlight how India is trying to influence the whole matter. It must urge FAFT to make that the forum is fair, unbiased and is following its technical criteria, rather than being used as a political tool. Thirdly, it should learn from its previous experience with the voting where China and Saudi Arabia voted against it. It needs three votes to get out of the grey list. Given the existing relationship with Saudi Arabia, it is easy to say what its vote will be.  Therefore, Pakistan should lobby and convince other friendly states to vote in its favor. Pakistan can contact Malaysia and Russia – noting their warming up relations- for this purpose.  Fourthly, Pakistan must use Afghanistan Peace Process as leverage and persuade the US to help it exit the grey list.

In short, FAFT ‘s grey list issue is not just the technical one for Pakistan, it is political, and geopolitics also has a role to play. Therefore, Pakistan should use technical expertise, diplomacy and politics to find a way out from the grey list.


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