Pakistan off the FATF’s grey List: What this means

New Delhi, Oct 22: Pakistan has been removed from the Financial Action Task Force's grey list and India has reminded the global community that it is in their interest that Pakistan should continue to take credible action against terrorism and terror financing on its soil.

"As a result of FATF scrutiny, Pakistan has been forced to take some action against well-known terrorists, including those involved in attacks against the entire international community in Mumbai on 26/11," spokesperson for the Ministry of External Affairs, Arindam Bagchi said.

"It is in global interest that the world remains clear that Pakistan must continue to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control," Bagchi also said.

In June 2018, Pakistan was moved to the grey list. Pakistan made an international commitment at the highest political level that it would work with the FATF to strengthen its AML CFT ragtime and address deficiencies in its counter terrorist financing related actions.

The AML CFT stands for Anti Money Laundering/Combating the Financing of Terrorism. In October, the FATF announced that Pakistan has strengthened the effectiveness of its AML/CFT and also addressed technical deficiencies to meet the commitments of its action plans regarding strategic deficiencies which were identified by the FATF in June 2018 and June 2021. Hence the FATF concluded that Pakistan is no longer subject to its increasing monitoring process.

Now that it has been removed from the grey list, Pakistan gets a reputation boost and a clean bull of health from the international community on terrorist financing. Being on the grey list means that Pakistan's relations with the international funders including banks remains affected. These financial institutions take a note of the FATF rankings.

Pakistan's economy, on the other hand, is in doldrums and it desperately is in need of funding. On October 21, Fitch had cut the country's sovereign rating to CCC+ from B-.

India, on the other hand, says it understands that Pakistan will continue to work with the Asia Pacific Group on Money Laundering to further improve its anti-money laundering and counter-terror financing.