Pakistan is out of FATF ‘Grey List’ on terror funding
- Posted By
22nd Oct, 2022
Global terror-financing watchdog FATF has announced Pakistan‘s removal from its grey list, saying the country has largely completed its action plans on anti-money laundering and financing of terrorism.
What is the FATF?
- FATF is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
- The FATF Secretariat is housed at the OECD headquarters in Paris.
- It holds three Plenary meetings in the course of each of its 12-month rotating presidencies.
- As of 2019, FATF consists of 37 member jurisdictions.
India in FATF
- India became an Observer at FATF in 2006. Since then, it has been working towards full-fledged membership.
- On June 25, 2010, India was taken in as the 34th country member of FATF.
EAG of FATF
- The EAG is a regional body comprising nine countries: India, Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Belarus.
- It is an associate member of the FATF.
What is the role of FATF?
- The rise of the global economy and international trade has given rise to financial crimes such as money laundering.
- The FATF makes recommendations for combating financial crime, reviews members’ policies and procedures, and seeks to increase the acceptance of anti-money laundering regulations across the globe.
- Because money launderers and others alter their techniques to avoid apprehension, the FATF updates its recommendations every few years.
What is the Black List and the Grey List?
- Black List: The blacklist, now called the “Call for action” was the common shorthand description for the FATF list of “Non-Cooperative Countries or Territories' ' (NCCTs).
- 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.
Consequences of being in the FATF grey list
- Economic sanctions from IMF, World Bank, ADB
- Problem in getting loans from IMF, World Bank, ADB and other countries
- Reduction in international trade
- International boycott