Islamabad: Pakistan may remain on the Financial Action Task Force's Grey List beyond February 2020 for money laundering and terror financing due to its "risk profile", according to media reports.
Pakistan was placed on the Grey List by the Paris-based Financial Action Task Force (FATF) in June last year and was given a plan of action to complete it by October 2019, or face the risk of being placed on the Black List with Iran and North Korea.
The FATF retained Pakistan on the Grey List and warned the country of action for its failure in combating money laundering and terror financing. The decision was taken after a five-day plenary of the FATF held in Paris in October.
"Pakistan faces greater challenges than many other countries because of its risk profile,” Hammad Azhar, the minister responsible for economic affairs division, was quoted as saying by Dawn newspaper on Friday.
He was speaking at a meeting of the National Assembly's Standing Committee on Finance and Revenue.
He said that some countries had been removed from the Grey List after just 80 per cent compliance while Pakistan was being pressurised to ensure 100 per cent compliance with the action plan.
"Pakistan is being viewed from a very high threshold; there is a political element to this,” he said.
The Asia Pacific Group of the FATF had found serious deficiencies in Pakistan's anti-money laundering measures and combating terror financing frameworks in its mutual evaluation report released a few weeks ago.
"As a result of the Mutual Evaluation Report (MER) carried out by the Asia Pacific Group, Pakistan was under observation till October 2020,” The Express Tribune quoted the minister as saying. Since Pakistan continues to be in the FATF 'Grey List' , it would be very difficult for the country to get financial aid from the IMF, the World Bank, ADB and the European Union.
There is also the risk of reduction in rating by Moody's, S&P and Fitch, making Pakistan's financial condition more precarious.
The FATF plenary in October noted that Pakistan addressed only five out of the 27 tasks given to it in controlling funding to terror groups like the Lashkar-e-Taiba, Jaish-e-Mohammad and Hizbul Mujahideen, responsible for a series of attacks in India.
The FATF asked Pakistan to swiftly complete its full action plan by February 2020.