Financial Action Task Force (FATF) listed Pakistan in terror funding countries’ Grey list also known as watch list. It is the inter-governmental organization in charge of countering money laundering and funding of terrorism. This development could sabotage Pakistan’s economy severely.
The decision to include Pakistan on the ‘grey list’ of countries that are not doing enough to combat terrorism financing was taken at a meeting of the Financial Action Task Force (FATF) here after China and Saudi Arabia dropped their opposition to the US-led move on Thursday night. An official statement is expected later on Friday, said FATF spokesperson Alexandra Wijmenga-Daniel. ‘The move is part of a broader US strategy to pressure Pakistan to cut off its links to Islamist militants unleashing terror attacks in Afghanistan and India.’
Analysts say that being positioned on the FATF Grey list would put Pakistan under extra investigation by regulators and financial institutions, which could hamper trade and batter its foreign investment, that too at times of general election. International financial institutions and banks would find it almost impossible to do business in Pakistan along with Pakistani businesses to gain money worldwide.
Moreover, financial analysts fear the International Monetary Fund (IMF) may refuse any loan extension Pakistan might request as a precaution to restrain its widening trade deficit or offer a new deal with stricter guidelines dictated by the US and the European Union. ‘Pakistan will need a loan to pay off its debt burden,’ Hyder said. ‘If it’s included on the list, the country will face a serious challenge sourcing funds for repayment leading to the possibility of default. This would damage Pakistan economically.’
This is a major move that is expected to hamper most of the terror related activities. The updated laws about FATF should be studied by the investors before indulging into Pakistan based businesses or businesses that are directly or indirectly linked with Pakistan. The advancements of defence are mentioned in the Aerospace and Defense Market report published by Coherent Market Insights.