World Economy

Pakistan to Be Placed Back on FATF List

Pakistan to Be Placed Back on FATF ListPakistan to Be Placed Back on FATF List

Pakistan will be placed back onto an international terrorism-financing watch list from June, according to a person with direct knowledge of the matter, a move that may hinder the country’s access to financial markets.

Following a push from the US, UK, France and Germany, the Financial Action Task Force during a review meeting in Paris this week will announce that Pakistan is to be placed on its “grey” monitoring list. China, which is financing more than $50 billion of infrastructure projects across Pakistan, removed its earlier objections to the move, said the person, who asked not to be identified as the decision hasn’t been announced yet. Pakistan’s benchmark stock index reversed earlier gains and fell 0.8% in Karachi, Bloomberg reported.

While Pakistan technically has three months to convince the body that it has acted against terror organizations, it will be difficult for them in practice, the person said. The action comes three years after FATF removed the nuclear-armed nation from a list of countries which are subjected to regular monitoring. Pakistan’s Interior Minister Ahsan Iqbal said in a tweet on Friday that “we should not speculate” until FATF releases a statement. Officials at Pakistan’s Finance Ministry couldn’t immediately comment.

The move is the latest attempt to get Islamabad to take more action against terror groups that allegedly have support and sanctuary within Pakistan. Relations with the US have deteriorated drastically in the past year and in his first tweet of 2018, President Donald Trump said Pakistan gave “lies and deceit” in return for American funding.

Being placed on the list may impede Pakistan’s access to global markets at a time when its foreign reserves are dwindling and external deficits are widening ahead of national elections in July. Yet during the previous period under FATF monitoring Pakistan managed to negotiate an International Monetary Fund bailout and continued to tap the international bond market.

Last week Pakistan vigorously tried to avoid inclusion to the list and said the US had voiced concerns about the freedom with which the suspected planner of the 2008 Mumbai attacks, Hafiz Saeed, and his organizations operated in the country.

Foreign Minister Khawaja Muhammad Asif on Wednesday tweeted that no consensus had been reached to put Pakistan on the monitoring list and that the nation had been given a three-month “pause.”

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