Pakistan to stay on FATF grey list till 2021

Pakistan to stay on FATF grey list till 2021

Why in News?

The Financial Action Task Force (FATF)  decided to keep Pakistan on the “grey list” till the next review of its compliance with the recommendations made in February next year.

What is the role of FATF?

  • The rise of the global economy and international trade has given rise to financial crimes such as money laundering.
  • The FATF makes recommendations for combating financial crime, reviews members’ policies and procedures, and seeks to increase acceptance of anti-money laundering regulations across the globe.
  • Because money launderers and others alter their techniques to avoid apprehension, the FATF updates its recommendations every few years.

What is the Black List and the Grey List?

  • Black List: The blacklist, now called the “Call for action” was the common shorthand description for the FATF list of “Non-Cooperative Countries or Territories” (NCCTs).
  • Grey List: Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.

Consequences of being in the FATF grey list:

  • Economic sanctions from IMF, World Bank, ADB
  • Problem in getting loans from IMF, World Bank, ADB and other countries
  • Reduction in international trade
  • International boycott


 



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