Q.4 Why was Pakistan placed on the ‘Grey List’ of Financial Action Task Force (FATF)? What are the implications and what measures should Pakistan take to move out of this list? 2020

Pakistan was placed on the “Grey List” of the Financial Action Task Force (FATF) in June 2018 due to concerns over its lack of effective measures to counter money laundering and terrorist financing. The FATF is an international organization that sets standards and promotes effective implementation of legal, regulatory, and operational measures for combating money laundering and terrorist financing.

The implications of being placed on the FATF’s Grey List are significant for Pakistan. Being on the list can negatively impact Pakistan’s reputation and financial standing, making it more difficult for the country to attract foreign investment and access international financial markets. Additionally, being on the Grey List can also result in increased scrutiny from financial institutions and increased costs for financial transactions, as they take additional measures to comply with anti-money laundering and countering the financing of terrorism (AML/CFT) requirements.

To move out of the FATF Grey List, Pakistan needs to take concrete steps to address the concerns over its lack of effective measures to counter money laundering and terrorist financing. This could include implementing stricter AML/CFT measures, enhancing its regulatory framework, improving its legal system, and increasing its cooperation with international partners on these issues.

In conclusion, Pakistan was placed on the FATF’s Grey List due to concerns over its lack of effective measures to counter money laundering and terrorist financing. To move out of the list, Pakistan needs to take concrete steps to address these concerns and improve its AML/CFT framework.