FATF grey list causes a loss of $38 billion

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Pakistan has suffered an economic loss of $38 billion as the Financial Action Task Force (FATF) has put it on its grey list since 2008. This was revealed in a research paper published by an Islamabad-based independent think tank Tabadlab.

The FATF has again put Pakistan on the grey list for the fourth time till June 2021 as the country has not met the three conditions about investigating terror financing as laid down by the United Nations Security Council. Pakistan’s laws on stopping money laundering and terror financing are not fully compliant with global standards.

Pakistan

The FATF wants Pakistan to demonstrate effective implementation of targeted financial sanctions against all 1,373 designated terrorists specifically those acting for or on their behalf. The research paper titled ‘Bearing the cost of global politics – the impact of FATF greylisting is authored by Dr Naafey Sardar. He has concluded that the $38 billion losses are worked out based on a reduction in consumption expenditures, exports, and foreign direct investment (FDI).

Pakistan was placed in the FATF grey list in 2008 and exited the next year. Then again in 2012, it was removed from the list following amendments to the Anti-Money Laundering and Anti-Terrorism Act of 2015, in which measures were enacted to “confiscate the properties of the affiliated groups, as well as act against the financiers of terrorist activities within the state”.

But FATF again put Pakistan back on the grey list in 2018. In June 2018, Pakistan was placed on a watch list of countries for persistently inadequate controls to deter terror financing and money-laundering. The decision to place Pakistan on the list was taken in February 2018 following a US-sponsored move supported by the UK, France and Germany.

Pakistan has blamed the US-India nexus for its placement on the grey list, although the diplomats in Islamabad believe that the FATF put Islamabad on the non-compliant list more because of technical reasons than the political ones.

Eye on Sri Lanka’s trade, cricket and Buddhism

In his maiden two day visit to Sri Lanka, Prime Minister Imran Khan pitched for the over-ambitious China-Pakistan Economic Corridor (CPEC) as a connectivity booster. He tried to sell the project, which is facing many hurdles because of the economic crisis, as Sri Lanka’s hope to enhance connectivity right up to Central Asia.

Also Read: Pakistan looks at the US for bailout in Afghanistan

“Pakistan is part of the One Belt and Road initiative of China, and CPEC is one of its flagship programmes. And it means connectivity,” Khan said. He insisted that trade ties would bring Pakistan and Sri Lanka closer together.

Khan was the first head of government to visit Sri Lanka since the Covid-19 pandemic struck the world. He held one-on-one bilateral meetings with counterpart Mahinda Rajapaksa and President Gotabaya Rajapaksa.

Khan will also lead the delegation-level talks, covering “all areas of cooperation” between the two countries, including trade and investment, health and education, agriculture, science and technology, defence and security, and culture and tourism, the Pakistani mission here said.

Several MoUs” in these areas was signed on Tuesday, according to a tweet from Prime Minister Rajapaksa.

In addition to trade cooperation, Khan invoked cricket and Buddhism, topics that most Sri Lankans share a deep connection with. He commended the Sri Lankan cricket team for emerging as a world-class team from the subcontinent. The praise caught the eyeballs as the Sri Lanka cricket team was attacked in Pakistan a few years ago. Khan called Pakistan one of the greatest Buddhist heritage sites and spoke of Buddhist heritage linking the two countries.

Khan’s speaking on Buddhism has come after an outburst by the Muslims in Sri Lanka over the local government’s policy of compulsory cremation of the Covid-19 victims. Sri Lanka had allowed the burial of the victims receiving praise from Khan but later changed its policymaking the cremation compulsory leaving Khan in a tizzy.

Joint naval exercise with 45 countries

Pakistan concluded the seventh edition of the multinational maritime exercise Aman-2021 in Karachi with participation from 45 countries. The ceremony was attended by a large number of senior military representatives from the participating countries, observers, diplomats and Pakistan Navy officials.

Navy chief Admiral Mohammad Amjad Khan Niazi has been highlighting the Pakistan Navy’s initiative of Regional Maritime Security Patrols (RMSP) aimed at dominating the Indian Ocean Region.

Aman Exercise is one of Pakistan Navy’s mega-events that is held biennially.

The 45 countries participated with their ships, aircraft, Special Operation Forces and a large number of observers. The exercise is always conducted in two phases, harbour and sea. A conference on the subject ‘Development of Blue Economy Under a Secure and Sustainable Environment: A Shared Future for Western Indian Ocean Region’ was also organised.

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