Pakistan welcomes being dropped from 'grey list' of money-laundering watchdog FATF

The move severely curtailed exchange flows and discouraged foreign direct investment by putting reams of red tape around even the simplest projects.

Image used for representational purpose only.

NEW DELHI: In a major relief for cash-strapped Pakistan, the Paris-based Financial Action Task Force (FATF) on Friday took the terror-tainted country out of its inglorious ‘grey list’ (increased monitoring), four years after it was placed on it.

With the negativity gone, Islamabad will now be in a better position to seek financial aid from the International Monetary Fund, the World Bank, the Asian Development Bank and the European Union to support its economy.

Announcing the decision after the two-day plenary in Paris on Friday, FATF president Raja Kumar said Pakistan’s leadership showed a high level of commitment to combat financial terrorism and money laundering.

Pakistan's foreign ministry said in a statement the decision was "much-awaited good news".

"Congratulations to the people of Pakistan," Foreign Minister Bilawal Bhutto Zardari tweeted.

Congratulations to the people of Pakistan. Pakistan has officially been removed from the FATF ‘grey list’. Pakistan Zindabad.

— BilawalBhuttoZardari (@BBhuttoZardari) October 21, 2022

Pakistan was put on the grey list in 2018 for its failure to check the risk of money laundering, leading to terror financing. Reacting to the development, the Ministry of External Affairs said Pakistan has to further improve its counter-terror financing system. “Pakistan must continue to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control,” said MEA spokesperson Arindam Bagchi.

In other decisions, the FATF put Myanmar in the “high-risk jurisdictions subject to a call for action”, often referred to as the terror financing watchdog’s blacklist. Iran and North Korea continue to be on the black list, while Russia has been barred from future FATF projects.