Pakistan has been engaged in lobbying efforts with different countries around the world to thwart a move by the United States and its European allies to get Pakistan placed on a global terrorist-financing watchlist with the Financial Action Task Force (FATF), it emerged on Thursday.
Responding to a calling attention notice about Pakistan’s possible placement on the FATF ‘grey list’, Minister of State for Finance Rana Afzal told the Senate that the move to put Pakistan on the terrorist-financing watchlist is a political manoeuvre on the part of the US and UK.
He said the US banding together with Britain to place Pakistan on the watchlist is a “dangerous step” intended to pile political pressure on Pakistan.
News broke on Tuesday that the US along with the UK, France and Germany had put forth a motion with the FATF to place Pakistan on the watchlist of countries considered non-compliant with global anti-terror financing measures.
A meeting of FATF member states is due to take place next week in Paris, where the organisation could adopt the motion on Pakistan.
Afzal in his briefing said Pakistan had already submitted an annual compliance report to FATF earlier in January and America’s nomination of Pakistan for the watchlist without considering the report was puzzling.
He said Interior Minister Ahsan Iqbal has recently concluded visits to the US and UK to convince their governments to withdraw the motion. He said the adviser to the prime minister on finance is on a tour of European countries, the foreign secretary has visited Italy and other government representatives have been to Korea and Japan in connection with the same lobbying efforts.
“We are contesting this matter and hope to get support [from other countries],” the minister said, revealing that the government has also contacted all foreign embassies in this regard.
Afzal stressed that Pakistan has seized the assets of banned groups in compliance with FATF regulations, and expressed the fear that investment and funds meant for development projects would be adversely affected if Pakistan is added to the ‘grey list’.
The FATF maintains grey and black lists for countries that have fallen short of establishing concrete measures to counter money laundering and terror financing.
Pakistan was previously on the FATF watchlist from 2012 to 2015. The FATF, an intergovernmental body based in Paris that sets global standards for fighting illicit finance, had previously warned Islamabad it could be put back on the list without further efforts to crack down on the flow of funds to militants.
Pakistani officials and Western diplomats say being put on the FATF watchlist could deal a blow to Pakistan’s economy, making it harder for foreign investors and companies to do business in the country.
The implications of Pakistan being placed on the watchlist have already begun to show signs, with the benchmark KSE-100 Index plunging 411 points to close at 42,942 on Thursday, as a bearish spell continued to prevail at the Pakistan Stock Exchange.
“Investors traded cautiously ahead of the Financial Action Task Force’s key meeting in Paris next week as the United States and few European countries plan to table a motion with FATF to put Pakistan back on its watchlist,” a report issued by the Topline Securities earlier today read.