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FATF Fiasco

The Indian External Affairs Minister confirmed what Pakistan has been saying that India actively politicizes and undermines the technical processes and spirit of FATF.

By Amjad Ali | September 2021


“Due to us, Pakistan is under the lens of FATF and it was kept in the grey list. We have been successful in pressuring Pakistan and the fact that its behaviour has changed is because of pressure put by India by various measures.” This was a tacit admission by the Indian External Affairs Minister, Subramaniam Jaishankar, that Pakistan was placed in the grey list in 2018 and continues to be there due to the Indian pressure on the Financial Action Task Force (FATF).

The statement has exposed the double standards of the international counter terror-financing and anti-money laundering watchdog that this organization has been exploited by powerful lobbies and remains vulnerable at the hands of its financiers and other important players. On top of that, its decisions are based on manipulation rather than transparency.

Having been placed in the increased monitoring list in July 2018, Pakistan was handed out a set of actions along with a timeline for implementation of counter terror financing and anti-money laundering measures by the end of 2019 by the FATF. However, the deadline was extended later. After the June 21-25, 2021 plenary held in Paris, FATF President Dr Marcus Pleyer said, “The Pakistani government has made substantial progress in making its counter-terrorist financing systems stronger and more effective. It has largely addressed 26 out of 27 items on the action plan it first committed to in June 2018.”

Nevertheless, FATF decided that Pakistan has to remain in the grey list owing to its failure to comply with the last remaining item. To this, Foreign Minister Shah Mehmood Qureshi retorted, “We had been given 27 points in the FATF Action Plan, out of which work on 26 has been completed. In this situation, there is no justification to keep Pakistan on the grey list. India wanted to use the forum for political purposes but should not be allowed to do so.” Besides, he responded to Jaishankar’s shocking revelations that, “Pakistan has consistently maintained that India has politicized FATF. The recent Indian statement makes clear their mal-intent. Manipulating an important technical forum for narrow political designs against Pakistan is disgraceful but not surprising for the Modi Government.”

Pakistan has complied with almost all the FATF recommendations, yet it has not thus far been released from the grey list. Federal Minister Hammad Azhar, while condemning the Indian Minister’s statement, said,, “The statement of Indian External Affairs minister only confirms what Pakistan has been saying all along; India actively politicizes and undermines the technical processes and spirit of FATF.”


India’s senseless action has made the credibility of the organization questionable. Despite the fact Pakistan has gone out of the way to work on the action plan, there is no reason to put the country on the grey list. FATF President Dr Marcus has praised Pakistan with words like ‘substantial progress’ and ‘largely addressed’. Against this backdrop, the entire development still gives the indication that FATF has become a political tool for powerful players to advance their geopolitical goals.

FATF has lost its status of an independent, transparent and AML/CTF institution. Its double standards have been exposed by its controversial decisions. It is indeed Indian state-sponsorship to terrorism that has wreaked havoc across Pakistan. The eastern neighbour has repeatedly supported and provided technical assistance to the terror outfit Tehreek-i-Taliban Pakistan (TTP) that has killed thousands of innocent citizens of Pakistan. Who can forget the horrors of massacre of the Army Public School (APS) in Peshawar? The blood of the innocent APS martyrs is on the hands of the sponsors of TTP.

There are countless instances which make a compelling case that India should be black-listed. A few of them are as follow:

(a) The US Treasury Department’s Financial Network (FinCEN) has found several Indian banks involved in transactions related to money laundering, terror financing, drug dealing and financial fraud.

(b) Pakistan has already provided the UN, OIC and the EU states with irrefutable evidence against Indian involvement in the country for abetting, planning and executing terrorist activities inside Pakistan through its proxies handled from Afghan soil.

(c) Lately, two incidents of smuggling of highly enriched uranium to India were reported. This were serious incidents which proved the fact that India has not taken adequate measures for the safety of fissile material. Its falling into the wrong hands could pose irrevocable disaster.

However, turning a blind eye towards lax Indian AML/CTF regimes, creates an impression that FATF has become a political forum and is not a neutral one. It is beyond any doubt that Pakistan has been placed on the grey list because of pressure from the major financiers of FATF.

Pakistan has already taken concrete steps as recommended by FATF. Nonetheless, keeping the country on the increased monitoring list seems unjustified. FATF has not only kept Pakistan on the grey list but also added more to its to-do list despite the high level of compliance.

Needless to say, these recommendations and their implementation have proved considerably beneficial to the country. Pakistan has to act upon them for the sake of its own interest, as the plan of action has ensured increased transparency, prevention of money laundering and curbing of terror financing.

Pakistan’s continued presence in the grey list has to do more with the political reasons than technical. It is now high time for FATF to exclude the country from the list due to its impressive progress towards the implementation of the 27 points. If FATF aims to restore its credibility and maintain a status of neutral counter terrorism and anti-money laundering body, it must take pressure-free decisions. Otherwise, it will become a dummy organization over time with no credibility.

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