Pakistan’s history with Financial Action Task Force (FATF), the international terrorism financing watchdog, is quite a prolonged and historied one. Initially, the country was placed on its “grey list” in February 2008 – for apparently neglecting to take preventive measures against terror financing and money laundering. In addition, Pakistan was included in the FATF’s list from 2012 to 2015.
Since 2018, Pakistan has been on the grey list and was offered a proposal of action to be completed before October 2019. In case, if a country is willing to pull out of the grey list, it must have to satisfy the action plans FATF recommends. According to FATF’s action plans, a country must include evidence of effective action against U.N.-designated terror outfits, asset seizures, and individuals along with their associates in terms of financial sanctions.
In response to the shortcomings identified in Pakistan’s evaluation report in 2019, a new action plan has been further given to the country to address the weaknesses primarily focussed on combating money laundering. During the last meeting of FATF held in June, the organization planned to visit the country itself to validate the country’s progress against money laundering and terror financing, however, in the meantime, Pakistan would be kept on the grey list.
Recently, on October 21, FATF removed Pakistan from a global money laundering watchlist, declaring ease in foreign investment and boosting the country’s economy. In short, Pakistan has been whitelisted from the grey list.
Furthermore, FATF welcomes Pakistan’s considerable efforts in improving its Anti-Money Laundering (AML) and combating the financing terror (CFT) regime. Interestingly, Pakistan is considering this day a blessed one for the nation. “This goal to combat money laundering is accomplished with mutual efforts as well as hard work of several institutions,” the minister of Pakistan stated. In order to accomplish all FATF concerns ahead of time, the Pakistan army and several other institutions perform a significant role, he added.
Pakistan has finally taken off its name from FATF’s list. Meanwhile, Myanmar alongside Iran and North Korea has been placed on FATF’s blacklist for failing to address the shortcomings of strategic deficiencies.
Myanmar, previously known as Burma, had constantly been unsuccessful to deal with Anti-Financial Crime (AFC) shortcomings, as per FATF’s statement. Additionally, the country is extensively witnessed as a gateway for narcotics and arms. However, this turns to place Myanmar on the blacklist would have a severe effect on foreign aid as well as the broader economy, which eventually impacts the lives of common Burmese, authorities and business executives warn.
Back in June 2022, FATF urged Myanmar to immediately complete its action plan ahead of October 2022. Despite spending two and half years on FATF’s grey list, Myanmar still failed to combat the financial crimes.
However, "due to blacklisting the payments of sending money into and out of the country will undoubtedly extend and increase, particularly for the purpose of commerce and remittance payments." Similarly, the economist expected "progress on the path to unofficial, unregulated international payment channels, as well as the tradition of bank accounts opened outside of Myanmar" the economist predicted.
In light of sanctions imposed on the blacklisted nations including Myanmar, Iran, and North Korea, it seems possible that the United States will propose severe financial measures. In addition, the Myanmar central bank, or other significant banks in the country might be designated as Specially Designated Nationals, effectively securing them off from the US financial system, as part of the sanctions package.
The President of the FATF stressed countries included in the blacklist to ensure “no blanket measures that disrupt the flow of humanitarian funds.” Moreover, there should not be harmful funding for ‘legitimate and pure activity,” he further added.