Exiting the ‘grey list’ is not exemption from scrutiny, FATF warns Pakistan

Paris (The Uttam Hindu): The Financial Action Task Force (FATF), an organization monitoring global terror financing, has said that Pakistan should understand that its removal from the 'grey list' in October 2022 does not mean that it will no longer be monitored for terror funding or money laundering.

Following the FATF meeting in France, the organization's president, Elisa de Anda Madrazo, said at a press conference that all countries, including Pakistan, must remain vigilant and committed to combating illicit economic activity, even after being removed from the gray list. "No country that has been on the gray list is completely immune to the activities of criminals – whether they are money launderers or terrorists. Therefore, we appeal to all countries to continue their efforts to prevent such crimes," Madrazo said.

Pakistan was removed from the grey list in October 2022, but it continues to be monitored to ensure it is properly implementing measures against terror financing. Since Pakistan is not a member of the FATF, its oversight is handled by the Asia Pacific Group (APG).

The FATF chief explained that the grey list includes countries whose systems to combat terrorist financing and money laundering are found to have serious deficiencies. He said, "Removal from the grey list is not the end of the process. We expect countries to strengthen their systems and address the deficiencies that criminals exploit."

This statement comes amid reports that Pakistan-based terrorist organizations like Jaish-e-Mohammed (JeM) are using digital wallets and hidden financial networks to run their training camps. India's National Risk Assessment Report 2022 also identified Pakistan as a major source of terror financing, particularly through organizations linked to the National Development Complex (NDC), a government institution.

The FATF report, which includes input from India, notes that the South Asian region remains vulnerable to state-sponsored terrorism and proliferation-related financial activities. Madrazo said, "The FATF's mission is to set global standards and ensure that all countries implement them properly. Our goal is clear: to deprive terrorists and criminals of their funding."

Belgium and Malaysia were reviewed under the new assessment criteria at the meeting in Paris. Burkina Faso, Mozambique, Nigeria, and South Africa were removed from the grey list after completing their action plans.