Pakistan still stuck in FATF grey list

In its latest plenary review, the Financial Action Task Force (FATF) has expectedly retained Pakistan in its ‘grey list’ – officially known as ‘Jurisdictions under Increased Monitoring’, while acknowledging the significant progress made on the entire action plan.

Pakistan is now largely complaint on 24 out of 27 items of the action plan. It needs to show compliance on the remaining 3 counts by June 2021 to complete the FATF action plan which are mostly related to the implementation of the amended regulations.

The overall tone of the statement was encouraging, with the global body recognizing notable progress made so far – a continuation of the previous statement for this round of consultation. With 89% compliance achieved against the action plan, the question now turns to when Pakistan would exit the grey list?

Analysts believe graduation from grey list would be likely in October 2021 (post on-site testing) assuming Pakistan achieves compliance over the remaining 3 counts.

While the FATF’s decision of keeping Pakistan in the grey list was widely expected, the market should positively react to formal acknowledgment of the progress made so far and improving diplomatic relations with neighboring India, which would make the process of exiting the ‘grey list’ rather smooth.

 

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