Pakistan back on terror funding watchlist, pressure on economy likely
China is said to have removed its earlier objections to Financial Action Task Force’s move to put Pakistan on its grey list of terrorism financing
New Delhi: In a major setback to Pakistan, the multilateral Financial Action Task Force (FATF) has put the South Asian country back on its “grey list” of countries suspected of financing terrorist activities and groups, a development that will put pressure on Pakistan’s economy.
China is said to have removed its earlier objections to FATF’s move to put Pakistan on its grey list of terrorism financing, a Bloomberg report said.
The move by the Paris-based FATF, a global money-laundering watchdog, came after a motion moved by the US, as part of its broader strategy to pile pressure on Pakistan to sever links with Islamist militant groups seen as targeting Afghanistan and India.
Two people familiar with the development in New Delhi confirmed that Pakistan had been put on the “grey list” of the FATF.
According to one of the people cited above, earlier this week, China, Turkey, and the Gulf Cooperation Council (GCC) were opposed to the move to pressure Pakistan but by Thursday night both China and the GCC had dropped their opposition.
Under FATF rules, one country’s opposition is not enough to prevent a motion from being successful. Britain, France and Germany backed the US move.
There was no official reaction from India’s foreign ministry.
Earlier in the week, Pakistan’s foreign minister Khwaja Asif said in a Twitter post that his country had been given a three-month reprieve—a statement later contradicted by the US state department.
The US has in the past week lobbied with member countries of the FATF to act against Pakistan and put it on the terror funding watchlist.
The Pakistani government on its part had despatched envoys to European capitals to lobby with them to ensure it was not put back on the list.
Pakistan was previously on the list for three years until 2015. Being in the “grey list” means that accessing funds from international markets, for example, would become tougher for Islamabad, said an Indian official who declined to be named.
Recent news reports from Pakistan said President Mamnoon Hussain approved an ordinance to amend a section of the country’s Anti-Terrorism Act (ATA), giving law enforcers the power to act against terrorists and organizations proscribed by the United Nations Security Council.
Following this, the Rawalpindi district administration took control of a seminary and four dispensaries run by Hafiz Saeed, the chief of the Lashkar-e-Taiba, which India accuses of masterminding the 2008 Mumbai attack. Prior to this, Pakistani authorities also ordered a freeze of the assets of the Jamaat-ud-Dawa (JuD) and Falah-e-Insaniat Foundation (FIF), previously run by Hafiz Saeed, said a report in the Dawn newspaper.
The FATF is an inter-governmental body established in 1989 by the ministers of its member jurisdictions. Its objectives are 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.
Editor's Picks »
- BofA-ML survey: Short EM equity second most crowded trade
- GST-led shift from informal to formal sector happening, but at a snail’s pace
- Uncertain earnings for agricultural input firms despite bountiful rains
- PVR pays a premium for south
- Tata Steel’s Q1 supports India push but investors enquire at what cost