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The real reason why Pakistan may be removed from the FATF grey list

Abhishek Kumar Singh by Abhishek Kumar Singh
18 June 2022
in Geopolitics
Pakistan grey list FATF
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Ever since USA and its allies were driven out of Afghanistan, they were looking for a new vassal state. India and China were not going to buckle under it. So, they seem to have zeroed down on Pakistan again. Nothing else explains the talks of removal of Pakistan from  the grey list of Financial Action Task Force (FATF).

Pakistan to be out of FATF grey list

After the 4-day plenary session of FATF in Berlin, it is almost certain that the big fish of the geopolitics wants Pakistan to be out of grey list of FATF.  According to the officials, Pakistan has met almost all of the 34 criterias it was asked to meet in order to escape the grey list. FATF president said that its officials will be visiting Pakistan to look at the on-ground situation and if they are satisfied then they will give a final recommendation of removing Pakistan from the list.

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Stating that Pakistan has done well to curb money laundering and terror financing, FATF said, “Pakistan’s continued political commitment to combating both terror financing and money laundering has led to significant progress. In particular, Pakistan demonstrated that TF (terror financing) investigations and prosecutions target senior leaders and commanders of UN-designated terrorist groups and that there is a positive upwards trend in the number of ML (money laundering) investigations and prosecutions being pursued in Pakistan, in line with Pakistan’s risk profile.”

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History between Paksitan and FATF

This is not the first time Pakistan and FATF are being used in a single sentence. Pakistan has been in quite a love-hate relationship with FATF. The task force seems to be in love with Pakistan and that is why it put Pakistan on grey list. On the other hand, Pakistan hates being under the list. The first time, Pakistan was inducted into this ‘coveted’ list was way back in 2008, 9 months before its terrorists had crossed Indian borders to cause a terror of genocidal proportion in Mumbai. The first greylisting was not for a long period of time.

In 2012, Pakistan was reinducted into the list. It stayed on the list for 3 years, up until 2015. Because of it being a habitual offender, Pakistanis seem to have developed a special mechanism to fool the officials visiting it for compliance with FATF’s recommendations. On the forgery as well as support from its western allies, Pakistan was released in 2015.

Read more: Mauritius exits FATF grey list and India has its task cut out

Damage to Pakistan due to FATF

But, the propaganda can’t hide the truth for long. Under Donald Trump, USA had realised that real culprit of terrorism is Pakistan. Pakistan also started a non-cooperation (whatever was there on the face) with USA. On the back of increased terrorism, the terrorism-supporting nation was again listed in Grey list on 28th June 2018. Over the next 4 years, Pakistan’s name became more tainted with its support for Taliban and other terrorist groups.

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It is not that Pakistan has remained unaffected. FATF grey list is a precursor towards sanctions. If a country is under it, then financial institutions generally do not want to provide any support to the country. According to a working paper by Tabadlab, due to its Grey listing, Pakistan suffered a GDP loss of $38 billion. Even financial institutions like World Bank and IMF asked Pakistan to comply with FATF recommendations before availing any funding from them. That is why Pakistan is trying to show the world that it is taking some face-saving, coercive ‘corrective measures’.

Decoding FATF’s recommendations

FATF’s latest recommendations about the terrorist nations are a puzzling development. If you watch it closely, after Taliban came to power, Pakistanis have only witnessed an uptick in terrorist activities in Pakistan. Taliban is promoting Tehreek-i-Taliban in Pakistan and it is creating mayhem for a separate Pashtunishtan. Additionally, the violence led by different rebel groups wanting freedom from Pakistan is also emerging as a big threat to the Pakistani state. Frankly, FATF’s recommendations reek of absurdity.

But, there is a bigger issue here and that is geopolitical equations. US is trying to reestablish its hegemony in the region. Right now, it has no friends in the Asian continent. China is its arch-nemesis, Japan is drifting away from its sphere of influence while India’s independent foreign policy means that US can’t blackmail India. So, the US is down to courting nations.

US is trying to find a friend

Recently, it made some big friendship gestures towards India by supporting our anti-China stance. But, its domestic political equations do not allow for permanent bonhomies with India. You see, Democrats need Muslim voters in internal elections, so they have to cater to their demand of keeping their Muslim brothers happy. In this case, it’s Pakistan.

On the other hand, neocons dominating Republican party’s war-mongering need some regions to stay in conflict. Just like they have been stoking fire in Iraq and other countries in the Middle East, they want some more spheres of conflict. In the midst of all this, they want a place that could assist them with favours.

Pakistan is tried and tested nucleus of conflict in the Asian continent. No wonder it will be out of the purview of regulations in near future. It will be the base on which Democrats will play vote-bank politics and neocons will keep their arms lobby happy.

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