In wake of bailout package to Pak, Sitharaman discusses stricter norms with IMF1 min read . Updated: 20 Oct 2019, 07:41 PM IST
- Sitharaman said if there is no global action towards controlling terror and money laundering, it won’t serve the purpose
- IMF extended a $6 billion bailout package to Pakistan while it was on the 'grey list' of FATF
New Delhi: Indian finance minister Nirmala Sitharaman said that she had discussed the issue of the International Monetary Fund (IMF) extending a $6 billion bailout package to Pakistan while it was on the “grey list" of Paris-based Financial Action Task Force (FATF).
“I did not get into the details of what considerations were before them when they extended the facility to Pakistan, but I certainly did mention that there has to have certain linkage. Otherwise, if there is no global action towards controlling terror and money laundering, it won’t serve the purpose," Sitharaman said on Saturday in Washington.
In July, the IMF announced it would extend a $6-billion bailout package for Pakistan suffering from a severe balance of payments crisis. This came as Pakistan was on the FATF’s watch list for being a country that has to work hard to ensure financial support to terrorists was stopped. Pakistan had agreed to an action plan in June last year but a FATF monitoring group found that Pakistan was non-compliant on 22 of 27 parameters at its meeting in Paris that concluded last week.
In a statement issued on Friday, the FATF issued a stark warning to Islamabad that a formal blacklisting was highly probable within months if it failed to proceed on blocking channels funding terrorist groups by February 2020.
“The FATF again expresses serious concerns with the overall lack of progress by Pakistan to address its TF (terrorist financing) risks, including remaining deficiencies in demonstrating a sufficient understanding of Pakistan’s transnational TF risks, and more broadly, Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction," the 36-member grouping said in a statement on Friday.
“To date, Pakistan has only largely addressed five of 27 action items, with varying levels of progress made on the rest of the action plan. The FATF strongly urges Pakistan to swiftly complete its full action plan by February 2020. Otherwise, should significant and sustainable progress not be made across the full range of its action plan by the next plenary, the FATF will take action which could include calling on its members and urging all jurisdictions to advise their financial institutions to give special attention to business relations and transactions with Pakistan," it added.