Pakistan To Remain On “Grey List”

22 Oct 2021 Pakistan To Remain On “Grey List”

• Pakistan will continue to be on the ”Grey List” of the FATF as it needs to “further demonstrate” that action is being taken against UN-designated terrorists like India’s most wanted Hafiz Saeed and Masood Azhar, and groups led by them.

What next?

• On the action plan of Pakistan, Paris-based FATF requires it to demonstrate terror financing investigation and prosecution of leaders and commanders of UN-designated terrorist groups and their associates.

Background:

• Pakistan was put on the grey list by the Paris-based FATF in June 2018, and the country has been struggling to come out of it.
• It has now completed 26 of the 27 action items given to it in 2018.

About FATF:

• The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 on the initiative of the G7.
• It is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in various areas.
• The FATF Secretariat is housed at the OECD headquarters in Paris.

Roles and functions:

• Initially it was established to examine and develop measures to combat money laundering.
• In October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.
• In April 2012, it added efforts to counter the financing of proliferation of weapons of mass destruction.

Composition:

• The FATF currently comprises 37 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe. It also has observers and associate members.

What is a blacklist and grey list?

Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist.

• These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.

Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.

Considered in the grey list may face:

• Economic sanctions from IMF, World Bank, ADB.
• Problem in getting loans from IMF, World Bank, ADB and other countries.
• Reduction in international trade.
• International boycott.

yojna ias daily current affairs 22 Oct 2021

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