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FATF warns Pakistan of stern action if it fails to check terror funding

Retaining Pakistan on the 'grey list', the global terror financing watchdog warned that if it does not complete a full action plan by June, it could lead to consequences on its businesses.

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The Financial Action Task Force (FATF) on Friday warned Pakistan of stern action if it fails to prosecute and penalise those involved in terror funding emanating from its jurisdiction.

Retaining Pakistan on the 'grey list', the global terror financing watchdog gave it an 8-point list to deliver within four months to avoid being categorised into 'Black List'.

The decision was taken at the 6-day FATF plenary in Paris.

The FATF has also warned Pakistan that if it does not complete a full action plan by June, it could lead to consequences on its businesses, a PTI report quoted a source as saying.

The FATF in a statement said all deadlines given to Pakistan to check terror funding have come to an end but the country has failed to complete its action plan in line with agreed timeline.

During October plenary meet of last year, the FATF decided to keep Pakistan on its 'grey list' for failure to curb funnelling of funds to terror groups Lashkar-e-Taiba, Jaish-e-Mohammed and others.

"The FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020. Otherwise, should significant and sustainable progress especially in prosecuting and penalising terror funding not be made by the next Plenary, the FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their financial institutions to give special attention to business relations and transactions with Pakistan," the statement said.

With Pakistan's continuation in the 'grey list', it will be difficult for the country to get financial aid from the IMF, the World Bank, the ADB and the European Union as it goes through a precarious financial situation.

Pakistan was first placed on the 'grey list' by the Paris-based watchdog in June 2018 and was given a plan of action to complete it by October 2019, or face the risk of being placed on the 'Black List' with Iran and North Korea.

If Pakistan fails to comply with the FATF directive, there is a strong possibility that it may put the country in the 'Black List'.

The FATF said all deadlines in the action plan have expired and "again expresses concerns given Pakistan's failure to complete its action plan in line with the agreed timelines and in light of the terror funding risks emanating from the jurisdiction".

Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, the FATF said. It asked Pakistan to demonstrate that remedial actions and sanctions are applied in cases of Anti-Money Laundering (AML) and combating the financing of terrorism violations, relating to Terrorist Funding (TF) risk management and Targeted Financial Sanctions (TFS) obligations.

Pakistan should also demonstrate that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities and demonstrate effective implementation of targeted financial sanctions against all UN-designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets and prohibiting access to funds and financial services, the FATF said.

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