The Financial Action Task Force, however, praised Islamabad for implementing the organisation's action plans – a clear indication that Pakistan is moving closer to getting off the “grey list."

A Pakistan watches news channel flashing news regarding FATF decision, at a market in Karachi, Pakistan.
A Pakistan watches news channel flashing news regarding FATF decision, at a market in Karachi, Pakistan. (AP)

An international watchdog has said it will keep Pakistan on a so-called “grey list” of countries that do not take full measures to combat money laundering and terror financing but raised hopes that its removal would follow an upcoming visit to Islamabad to determine its progress.

The announcement on Friday by Marcus Pleyer, the president of the Financial Action Task Force, was a blow to Pakistan's newly elected government, which believes that it has mostly complied with the tasks set by the organisation.

Expectations had been high in Pakistan that FATF would announce its removal from the list at Friday's meeting in Berlin.

Instead, Pleyer said an onsite inspection by FATF in Pakistan would take place before October, and that a formal announcement on Pakistan's removal would follow.

He praised Islamabad for implementing the organisation's action plans – a clear indication that Pakistan is moving closer to getting off the “grey list."

“Pakistan’s continued political commitment to combating both terrorist financing and money laundering has led to significant progress," FATF said in a statement, adding that Pakistan’s “necessary political commitment remains in place to sustain implementation and improvement in the future."

READ MORE: What does it mean for Pakistan to be removed from the FATF ‘grey’ list?

Compliance with FATF tasks 

Pakistan's foreign ministry said the FATF reviewed Pakistan’s progress in countering terror financing during a four-day meeting this week and “acknowledged the completion" of Pakistan’s action plans. It said a visit to Pakistan was authorised as a final step toward exiting from the “grey list."

Pakistan’s Deputy Foreign Minister Hina Rabbani Khar, who attended the meeting in Berlin, said she was convinced that the process for Pakistan's removal from the list would begin later this year since Islamabad had fully complied with tasks set by the FATF in recent years.

Also on Friday, the FATF removed Malta from its “grey list" but added Gibraltar. Pleyer urged Gibraltar to take steps in the right direction, including focusing on the gatekeepers to the financial system.

READ MORE: Pakistan to stay on FATF 'grey list' despite 'significant progress'

The Paris-based group added Pakistan in 2018 to the “grey list," which is composed of countries with a high risk of money laundering and terrorism financing but which have formally committed to working with the task force to make changes.

At the time, the south Asian country avoided being put on the organisation's “black list” of countries that do not take adequate measures to halt money laundering and terror financing but also have not committed to working with the FATF. The designation severely restricts a country’s international borrowing capabilities.

The FATF is made up of 37 member countries, including the United States, and two regional groups, the Gulf Cooperation Council and the European Commission. Currently, only Iran and North Korea are blacklisted.

READ MORE: Countering FATF’s ‘Lawfare’: Lessons from Pakistan

Source: AP