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Explained: What is FATF Grey List


Delhi, Jan 24: As a major blow to India's diplomatic efforts, according to Pakistani daily The News International reports, the South Asian country has certainly chances of exiting the "grey list" of global terror watchdog Financial Action Task Force (FATF).

The plenary of the Paris-based anti-terrorism inter-governmental body to be held on February 16 this year.

Explained: What is FATF Grey List

China convinced FATF at its 3-day review meeting in Beijing to evaluate Pakistan from grey list.

Pakistan may be out of FATF 'Grey List' next month due to active support of ChinaPakistan may be out of FATF 'Grey List' next month due to active support of China

Islamabad needs 12 votes out of total 39 in the plenary meeting of the FATF which will be held in Paris.

Lets first know about FATF

FATF is a policy-making body which helps in combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

Established in 1989 during the G7 Summit in Paris, the FATF plenary meets three times per year.

FATF monitors:

  • member countries' progress in implementing necessary measures,
  • counter-measures of money laundering and terrorist financing techniques
  • and promotes the adoption of necessary measures globally.

FATF, at present, comprises 37 member countries excluding Pakistan and having India, as only Indian subcontinent countries.

What is Grey List

Countries which are considered as safe haven for supporting terror funding and money laundering, included in the grey list.

Grey list is like a warning for the included country that it might come under the blacklist, which is more grave than grey one and issued against the countries known as Non-Cooperative Countries or Territories (NCCTs).

FATF blacklisting may affect Pakistan's capital inflows: IMF ReportFATF blacklisting may affect Pakistan's capital inflows: IMF Report

FATF's grey list includes some of the names like Iceland, Bahamas, Israel, Lebanon, Syria.

After effect of grey listing

  • Grey listed countries find it difficult to raise funds, pay debts and access global, markets.
  • The countries might go through decline in foreign transactions and drop in foreign currency inflows.
  • Grey listed nations need to meet additional guarantees while borrowing finance from international donors like IMF

It is more adverse for the grey listed countries to end up being blacklisted.

Grey List and Pakistan

  • The country was in grey list in 2008 for the first time.
  • It was listed in 2012 for the second time, to 2015.
  • Recently, it was placed on the grey list in June 2018 and given a plan of action to be completed by October 2019.

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