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With FATF presidency passing from China to Germany, Pak in trouble

With FATF presidency passing from China to Germany, Pak in trouble

With Germany’s Marcus Pleyer as president of the Financial Action Task Force (FATF), the going for Pakistan, which is already placed in the grey list, may just get tougher. Islamabad will now face a tougher scrutiny, sources said, even as reports suggested that the country will remain in the grey list for some time as an on-site visit by the FATF team will not be possible before next year.

Pleyer took over the presidency on July 1 this year from Xiangmin Liu, director general, legal department, at the People’s Bank of China. With the baton passing on to Germany, Pakistan Prime Minister Imran Khan is a worried man.

Pakistan, which missed as many as 13 targets out of 27, got a four-month breather in February to complete its goals. In case Pakistan fails to achieve those targets, it may get blacklisted. Iran and North Korea are the only two countries which are currently blacklisted by the FATF.

Until now, Pakistan enjoyed an additional cushion as China, an ally, was holding the presidency.

Khan has repeatedly highlighted the grave consequences the country would face in case it is blacklisted.

The country’s economy is already in battered with slowing economic growth.

Pakistan is already finding it difficult to get financial aid from the multilateral agencies including the World Bank, International Monetary Fund, and Asian Development Bank, due to its grey list status. But once a country is placed on the blacklist, the challenges multiply significantly. In an interview in August, Khan said that Pakistan would suffer huge challenges, much like Iran, in case it was blacklisted.

“People talk about inflation now. If we are placed on the blacklist, we will experience inflation that would ruin our economy,” he said.

According to the World Bank, the country’s gross domestic product (GDP) growth was about 5.83 per cent in 2018. It was down to less than 1 per cent in 2019—a decline of over 4.8 per cent from 2018, leading to rise in unemployment and unrest within the country.

Pakistan until now has been enjoying support from China, and was given two extensions since October 2019 to achieve the targets.

The US has been pushing to blacklist Pakistan. India has also underlined the need to do the same.

“Pakistan has often blamed India on this front but the FATF is a serious platform with many members. It is not possible for one country to charge another if there was no substantial reason,” an analyst who did not wish to be identified told IndiaNarrative.com.

The Paris-headquartered FATF is a global intergovernmental watchman for anti-money laundering and anti-terror financing. It crafts out policies to address money laundering and other illegal activities..