GS Paper - 2 (International Relations)

The global money laundering and terrorist financing watchdog FATF has retained Pakistan on its terrorism financing “grey list” and asked Islamabad to address at the earliest the remaining deficiencies in its financial system. Pakistan has been on the grey list of the Paris-based Financial Action Task Force (FATF) since June 2018 for failing to check money laundering, leading to terror financing, and was given a plan of action to complete it by October 2019.

What

  1. The country continues to be on that list due to its failure to comply with the FATF mandates.
  2. The plenary on 4 March 2022 decided against existing Pakistan from the category despite the country meeting 32 out of 34 action points.
  3. Pakistan has so far avoided being on the black list with the help of close allies like China, Turkey and Malaysia.
  4. The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
  5. The FATF currently has 39 members including two regional organisations -- the European Commission and Gulf Cooperation Council.
  6. India is a member of the FATF consultations and its Asia Pacific Group.