The so-called “gray list” limits access to the global financial system for countries that fail to meet their responsibilities to stop terror-funding and money laundering.
The global watchdog, based in Paris, has not issued an official statement on the June 2020 deadline extension. However, Pakistani officials said the grace period has to do with the outbreak of the coronavirus that has forced Islamabad to direct its resources to fight the pandemic, and the FATF to cancel or postpone its meetings.
“FATF has extended the time period until October 30,” the chief spokesperson for Pakistan State Bank, Abid Qamar, confirmed to VOA.
The task force added Pakistan to its “gray list” from 2012-15, and again in June 2018, over concerns that Islamabad was not doing enough to combat militants operating within its borders.
During its plenary meeting in February, the FATF said Pakistan had made progress in fulfilling 14 of the 27 action items required for its removal from the list. The organization gave Pakistan until June to fulfill the remainder of its recommendations or face further ramifications, including member states revising their “business relations and transactions with Pakistan.”
Abid Qaiyum Suleri, the executive director of Sustainable Development Policy Institute in Islamabad, and a member of Prime Minister Imran Khan’s Economic Advisory Council, told VOA that Pakistan likely will meet “most of the requirements” within the new time frame, adding that a de-listing could help the country’s emerging economy.
“Pakistan is determined to meet these requirements not only as it wants to get out of gray-list, but due to the reason that strengthening anti-money laundering and counterterrorism is in Pakistan’s own benefit,” said Suleri. “It will especially help in bringing informal and undocumented economy into documentation which will help us increase our revenue collection.”
Pakistan announced its first positive cases of the coronavirus in late February, and the number of infections has continued to surge, up to more than 4,400 cases and 65 deaths this week.
Khan asked Pakistani citizens early on “not to panic” and said the country’s economy could not afford a countrywide shutdown. As criticism over his handling of the pandemic grew, and the Pakistani military decided to intervene, Khan began to appeal for international relief.
“The world community has to think of some sort of a debt write-off for countries like us, which are very vulnerable, at least that will help us in coping with it [the coronavirus],” Khan said during a March 16 interview with The Associated Press.
Plea to FATF
A week after Khan’s plea, A. Rehman Malik, Pakistan’s former interior minister, and chairman of the Senate Standing Committee on Interior, wrote a plea to the FATF, asking for Pakistan’s “complete” removal from the gray list in order to dedicate its resources and attention to the coronavirus outbreak.
Pakistan, as per FATF’s previous outline, had to submit its progress report by April 15, ahead of the group’s face-to-face meeting in Bangkok during the second week of May, and the plenary meeting scheduled for June in Paris.
Pakistani officials repeatedly have criticized the FATF designation, though, saying they have taken serious measures to eradicate terror groups and their financing sources in recent months. They say their country deserves more recognition especially for their role in U.S.-Taliban peace talks in neighboring Afghanistan.
The country’s counterterror court in February acted on the country’s most high-profile terror case when it sentenced Hafiz Mohammad Saeed, an Islamic cleric accused of masterminding the 2008 Mumbai terror attack that killed 161 people, to 11 years in prison.
Additionally, when a Sindh provincial court earlier this month overturned the conviction of four men accused of the 2002 kidnapping and murder of American journalist Daniel Pearl, Imran Khan’s government within hours ordered the re-arrest of the men and said it was appealing the court’s decision.
Some Pakistan analysts say the October deadline gives Pakistan an opportunity to address the remainder of FATF’s concerns. A future delisting from the gray list, they assert, would help attract more investors into the country’s economy.
“Pakistan should take advantage of this delay and start legislation, prosecution and conviction of banned terrorist outfits. There are many challenges, but Pakistan has to demonstrate and show to the world a seriousness in this regard,” Islamabad-based economic analyst Mehtab Haider told VOA.
VOA’s Rabia Pir contributed to this report from Islamabad.