Pakistan has been placed on the grey list by the Financial Action Task Force. The decision was taken at the ongoing FATF meet in Paris after the United States of America moved a resolution.
Pakistan was on the FATF watch list from 2012 to 2015, then only on issues of money laundering.
The decision was taken after China and Saudi Arabia withdrew their objections. Earlier China, Turkey and Saudi Arabia joined hands to block a move by the US to place Islamabad on the terror financing watch list. The US was working behind the scenes during the ongoing Paris meeting of the Financial Action Task Force (FATF) so as to take action against the country which it believes has not acted against terrorist financing and the implementation of the UN Security Council resolutions.
Pakistan has been asked to submit intense financial scrutiny on terror financing. The decision was taken late night and an announcement to this effect is expected soon.
It may be recalled that Pakistan's foreign minister had claimed two days back that they had been given a three-month reprieve. He had also said that hard negotiations had paid off.
The US says Pakistan is not taking action against terror groups like the Haqqani network and the Taliban. Islamabad has denied those allegations.
Pakistan being added to the "list of countries deemed 'high risk' for doing too little to curb terror financing," would have a financial implication for the country.
As a result of this inclusion, banks, other lenders and international companies seeking to do business with Pakistan could rethink financial ties, putting a damper on its already struggling economy.