Pakistan on Friday said it is committed to implementing the action plan of the Financial Action Task Force (FATF), after the international terror financing watchdog put Islamabad on notice, warning that the country will be blacklisted if it does not control terror funding by February next.
The FATF voiced serious concern over Pakistan's failure to deliver on most of its 27 targets.
The Ministry of Finance in a statement said Pakistan's delegation at the FATF reaffirmed its political commitment to fully implement the action plan.
The Pakistan officials also held sideline meetings with various delegations and briefed them about the progress on the FATF action plan and steps taken for strengthening its AML/CFT framework, it said.
The Paris-based FATF gave the warning to Pakistan at its five-day plenary which concluded in the French capital on Friday while deciding to again put the country on the 'Grey List'
By making this decision on Pakistan public, the FATF has given notice to the global financial institutions that they need to prepare to red flag the jurisdiction and ready their systems in February 2020 if the country falters in meeting the targets.
"It was again decided by consensus that FATF would retain Pakistan on the Grey List and warn Pakistan that if it did not complete its full Action Plan and show significant and sustainable progress action will be taken," said an official privy to the development said.
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.
According to a FATF statement, the FATF plenary 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 said it strongly urges Pakistan to swiftly complete its full action plan by February 2020.
"Otherwise, should significant and sustainable progress not be made across the full range of its action plan by the next plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdictions to advise their Financial Institutions to give special attention to business relations and transactions with Pakistan," the global body said in the statement.
Such action could include calling upon global financial institutions to give special attention to business relations and transactions with Pakistan. This language is the same as used for Iran, which is already in the blacklist category.
Interestingly, FATF President Xiangmin Liu, who is from China—Pakistan's "all-weather friend"—also referred to Islamabad's "deficiencies in its anti-money laundering and countering the financing of terrorism system".
The global watchdog said all deadlines for Pakistan in the action plan have now expired.
Pakistan was placed on the Grey List by the 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 blacklist with Iran and North Korea.