y the FATF.
Recent Developments In Pakistan
Pakistan media and establishment dutifully blame India for exerting pressure through FATF. Mr. Rehman Malik, former Interior Minister of Pakistan, has published an open appeal and promised to approach the International Court of Justice challenging the legitimacy of FATF to play the role of financial observer of world states. Islamabad also hired US lobbying firm Linden Strategies to sell its narrative that Pakistan was on track to deliver on its obligations. Pakistan has passed laws in Sep 2020 claiming that these are in compliance of the FATF standards. Out of 27 points action plan given by FATF to Pakistan, Pakistan was declared fully compliant on five points In October 2019. The FATF plenary in February 2020 found Pakistan compliant on nine additional points.
FATF Plenary 21 to 23 October 2020 And Pakistan.
This Virtual Plenary meet was held in the backdrop of the persisting COVID-19 pandemic with all its ill effects. The pandemic has severely impacted some authorities’ ability to implement measures to detect, prevent, and investigate money laundering and terrorist financing. The functioning of the FATF follow-up process has also been adversely affected demanding some policy and procedural tweaking. The FATF seems to have adopted a cautious approach during this meet due to the Pandemic. The FATF Plenary decided to hold the next Joint Experts’ Meeting virtually from 23-25 November 20, to discuss current and emerging money laundering and terrorist financing risks. The meet notes that Pakistan has made significant progress and has now largely addressed 21 of the 27 action items Pakistan is urged to swiftly complete its full action plan by February 2021. Another deadline to be breached! The remaining six points of the action plan are all related to terror financing, enforcement of the law, and effectiveness on the ground
Pakistan is touting this achievement that 21 of 27 FATF recommendations having been implemented. It is noteworthy that the basic issue, which has been continuously flagged by the FATF against Pakistan, relates to terror financing and action against proscribed persons and entities. This is where it has been failing and this is where it has to deliver. Under a risk-based approach, critical failing in even one criterion can lead to blacklisting. In 2019 Pakistan declared victory by remaining on the Grey list as Indian efforts to get it blacklisted were defeated. In 2020 the tone has changed. Greylist is hurting Pakistan and remaining on Greylist is not an option. There is increased optimism In Pakistan that blacklisting is off the table and exiting grey list could happen in 2021. This optimism may also have its roots in muted discussion in India on the blacklisting of Pakistan by FATF.
As a policy, India has no formal talks with Pakistan on any issue especially terrorism. India knows that the subject of terrorism is beyond the sphere of influence of Pakistan’s elected government. Thus, it is pointless to talk to the selected Government. Indian Army has taken proactive and punitive actions against terrorists in J&K on Line of Control and beyond in Pakistan. Indian Air Force also conducted airstrikes in Pakistan on terrorist Camps. These political decisions backed by effective execution by armed forces have not only discredited Imran Khan’s Government but more importantly, Pakistan Army’s image in its own country is dented. Diplomatically India has made a concerted attempt to expose Pakistan’s complicity in employing terrorism as state policy at all world forums. FATF which aims is to prevent illegal activities of ML/CFT/Proliferation financing and the harm they cause to society has also been kept informed of grave threat posed by Pakistan to international finance.
Way Forward for India.
FATF operates on a well-defined charter and guidelines. India must step up its efforts to report on Pakistan to FATF and address all issues related to FATF charter and guidelines being flouted by Pakistan.
(a) Joint Experts’ virtual meeting from 23-25 November must be utilised to inf